UCSI INTERNATIONAL SCHOOL

End of Semester 1 Examination

STUDENT
NAME

STUDENT
CLASS

Year 9 April 2022

Economics 1 hour 30 Minutes

READ THESE INSTRUCTIONS FIRST

Write your name on all the work you hand in.

Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.

Answer all questions.

You may lose marks if you do not show your working or if you do not use appropriate units.

At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

Marks ............/70

Percentage ....................%

Teacher’s
Signature

This document consists of __printed pages.

 [Turn over

SECTION A
There are 30 multiple choice questions on this paper. Answer all questions.
For each question there are four possible answers A, B, C and D. Choose the
one you consider correct and circle the most correct choice.
1. Carlos has been offered a new job with a large multinational company. He is
undecided whether to accept the position.
What is a non-wage factor he might consider?
A bonus payments
B holiday entitlement
C overtime rate
D salary level

2. Unlike the UK and US, a significant proportion of the shares on the stock
exchanges of China and Russia are of state-owned enterprises.
Which judgement about China and Russia can be made from this
information?
A their distribution of income and wealth
B their level of development
C their stages of production
D their type of economic system

3. What is the most important factor that affects how much a family saves?
A the income of the family
B the level of taxation
C the rate of inflation
D the reliability of banks

4. The table shows the change in real incomes for a number of occupations
between 1985 and 2015.

What can be concluded from the table?

 A All occupations were better off in 2015 than in 1985.
B Fork-lift truck drivers earned the lowest wages in 2015.
C Doctors have earned more than lawyers since 1985.
D Professionals received higher percentage increases in income than
manual workers.

5. A large bakery buys a flour mill.

Which form of integration (merger) is this?
A conglomerate
B horizontal
C vertical backwards
D vertical forwards

6. Why is the energy supply industry dominated by very large firms in many
economies?
A Government controls prevent the exploitation of consumers.
B High fixed capital costs exist.
C Labour-intensive production techniques are used.
D Non-price advertising increases competition.

7. The diagram shows the fixed costs, variable costs and total costs of a firm.

Which distance represents the firm's fixed costs?

A WX
B WY
C XY
D YZ

8. An entrepreneur buys a workshop for $200 000 to make plastic boxes. In the
first year of operation he spends $70000 on materials, employs ten production
workers paid by the amount produced (piece rate) at a total cost of $80 000
and buys two delivery vehicles for $10000 each.
What are his total variable costs?
A $100 000
B $150 000
C $220 000
D $370000
9. Why does specialisation increase the productivity of employees?
A Average cost of production increases.
B Staff turnover is high.
C Time is saved by not moving between tasks.
D Workers lose interest in their job.

10. In recent years some central banks have reduced interest rates below 1% per
year.
What is the purpose of this monetary policy?
A to discourage lending by the commercial banks
B to encourage investment to stimulate the economy
C to increase individual savings
D to reduce inflation

11. What is the main difference between capital-intensive production and labour
intensive production?
A the market structure of the production process
B the output that the production process creates
C the resources on which the production relies
D the size of the firm that uses the production process

12. What is the definition of diseconomies of scale?

A the decrease in average revenue as output increases
B the decrease in fixed cost as output increases
C the increase in average total costs as output increases
D the increase in total costs as output increases

13. What is a function of a central bank?

A accepting deposits from the public
B determining tax rates
C implementing monetary policy
D lending to businesses

14. What is likely to lead to an increase in the wages of university lecturers?

A an increase in the fringe benefits provided to university lecturers
B an increase in the tuition fees paid by university students
C government policies reducing the length of the training for university
lecturers
 D increased demand from students to study at university

15. When is a trade union likely to have more power to increase its members'
wages?
A when imports are increasing
B when labour supply is increasing
C when output is increasing
D when unemployment is increasing

16. The table shows the percentage (%) of income saved by different age groups.

What can be concluded from the table?

A Over the age range shown total savings equalled total dissavings.
B The 15-29 age group has the lowest level of income.
C The 50-64 age group saves the highest percentage of its income.
D The 65+ age group has a lower income than the 30-39 age group.

17. Which feature is a characteristic of money?

A indivisibility
B durability
C unlimited supply
D intrinsic value

18. An industry is experiencing diseconomies of scale.

What will be happening to long run average cost and total cost?
19. A firm that sells its product for $6 a unit has the following total costs.

Which statement is correct?

A Average cost is lowest when 10 units are produced.
B The firm does not make any profit when 20 units are sold.
C The firm has no fixed costs.
D Total variable costs fall continuously over these outputs.

20. Which statement about fixed costs is correct?

A They exist only in the long run.
B They include raw material and direct labour costs.
C They increase at the same rate as output.
D They must be paid even if there is no output.

21. What does a commercial bank not provide?

A cash
B bonds
C loans
D mortgages

22. What will be likely to increase the wages of airline pilots?

A Incomes increase in the world's major economies.
B Terrorist attacks decrease tourist travel.
C The cost of aviation fuel rises.
D The world economy goes into recession.

23. What is most likely to help a trade union's claim for wage increases in an
industry?
A a decrease in the price of a close substitute for the product
B a decrease in the qualifications needed for the job
C an increase in the number of workers
 D an increase in the profits of the industry

24. The table shows some information for a computer engineer in 2015.

Income tax is fixed at 20%. The engineer saved 10% of the disposable
income.
How much was saved?
A $3200
B $4000
C $4400
D $5500

25. What is a possible cause of diseconomies of scale?

A an increase in extra administration
B an increase in raw materials costs
C an increase in taxation on company profits
D an increase in the national minimum wage

26. What is not a function of a central bank?

A It is the lender of last resort to financial institutions.
B It is the sole issuer of notes and coins.
C It lends to individual firms and consumers.
D It manages the national debt for the government.

27. Which change will make a manufacturing company replace labor with capital
to maintain the most efficient combination of factors of production?
A The price of machinery has increased.
B The productivity of labour has increased.
C The productivity of machinery has increased.
D The supply of labour has increased.
28. What is the most likely reason a firm might welcome the introduction of a
trade union for its workers?
A Unions advise on the level of company dividends.
B Unions press for higher minimum wage rates.
C Unions simplify the process of wage bargaining.
D Unions wish to operate labour-intensive production methods.

29. What is least likely to lead to an increase in consumer spending on a new

car?
A a decrease in the cost of car repairs
B a decrease in the price of petrol
C a decrease in the rate of interest
D a decrease in train fares

30. A television manufacturer claims to have the most technically advanced

production in the industry.
What is this most likely to mean when compared with its rival producers?
A It has a greater share of the television market.
B It is a more diversified company.
C It is less likely to be disrupted by strike action.
D It needs a more highly skilled workforce.
 Section B
Answer all questions from this section.
Q1.
Nearly 80% of employees in the United Arab Emirates work in the service sector.
The region has attracted many large firms in industries such as tourism and finance
and energy. Operating on a large scale may give these firms lower unit costs,
helping them to be globally competitive. However, the region also has many startups
and small businesses. Small and medium-sized enterprises account for around 40%
of all jobs and income in the region.

a) Define tertiary sector. [2]

b) Explain how the size of a business may be measured. [4]
c) Analyse the benefits small firms can bring to an economy. [6]
d) Discuss whether large firms inevitably have lower unit costs than smaller firms.[8]

Q2.
The trade union representing thousands of low-paid production workers employed by
the BBC in the UK recently called for a minimum salary of $26000. BECTU the
Broadcasting, Entertainment, Cinematograph and Theatre Union said it was
'unjustifiable' for some in the organisation to be earning more than $198000 when
thousands of engineers, technical and other production staff were paid much less
than that amount. The minimum wage in the UK is around $9.90 per hour.

a) Identify three factors that may determine an individual's choice of occupation. [2]
b) Explain why the minimum wage legislation in the UK may not have an effect on
the earnings of most BBC staff. [4]
c) Analyse the factors that determine how much someone earns. [6]
d) Discuss whether membership of a trade union will always benefit a worker. [8]

Section A / 30

Section B / 40

END OF THE PAPER

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