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INT411S- INTRODUCTION TO ECONOMICS- 2ND OPP- JUNE 2023 |
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nAm I BIA un IVE RSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCEAND EDUCATION
DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE
QUALIFICATION: BRIDGING PROGRAM
QUALIFICATION CODE: INSTEM
COURSE CODE: ITE411S
SESSION: JULY 2023
DURATION: 3 HOURS
LEVEL: 4
COURSE NAME: INTRODUCTION TO ECONOMICS
PAPER: THEORY
MARKS: 100
EXAMINER(S)
MODERATOR:
2No OPPORTUNITY EXAMINATION QUESTION PAPER
Ms. Precious Mwikanda
Ms. Ponhomwene Nghishidivali
Ms. Lavinia Hofni
INSTRUCTIONS
1. This question paper is made up of Five (S) sections.
2. Answer Section A and Bon the attached answer sheet
3. Write each question on a separate page in your answer booklet
4. Write neatly and legibly
THIS QUESTION PAPER CONSISTS OF 14 PAGES (Including this front page)
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SECTION A
20 MARKS
Instructions:
•
Read all questions carefully
•
Answer all questions
•
All answers should be on the answer sheet provided on page 12. Tear the page off and place
it inside your examination script.
QUESTION 1
[20 marks]
1.1. Economics is the study of:
A.
How to increase economic growth.
B.
How resources should be allocated.
C.
How to ensure resources are shared equally.
D.
How society allocates scare resources in order to maximize welfare.
[1 mark]
1.2. A factor of production, capital, includes:
A.
Money
B.
Computers
C.
An overdraft
D.
A mortgage.
[1 mark]
1.3 All point on the production possibility curve show efficiency because
[1 mark]
A.
Output is distributed equally.
B.
the economy is producing the combination of output that the consumers demand.
C.
the economy has reached its fully long term potential.
D.
the economy is producing at full current capacity.
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r.
1.4 The Law of Demand is a __ _
A. qualitative statement
B. quantitative statement
C. both a and b are correct
D. both a and b are incorrect
[ 1 mark]
1.5 When the price of coffee rises, the demand for tea __ .
A. falls
B. rises
C. stays the same
D. none of the above
[1 mark]
1.6 Elasticity of demand is a __ _
A. qualitative statement
B. quantitative statement
C. both a and b are correct
D. both a and b are incorrect
[1 mark]
1.7 Which of the following statements is true about consumer behavior?
A. Consumer behavior is the study of microeconomics
B. Consumer behavior is the study of macroeconomics
C. Consumer behavior is the study of income analysis
D. None of the above
[1 mark]
1.8 An increase in the number of restaurants serving fast-food leads to __ _
A. Growth in the demand of fast-food meals
B. Increase in the supply of fast-food meals
C. Increase in the price of fast-food meals
D. Growth in the demand for substitutes of fast-food meals
[1 mark]
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1.9 Which of the following best captures the idea of the fundamental economic problem?
A. limited wants and limited resources
B. lack of demand for limited resources
C. Unlimited resources and unlimited wants
D. limited resources and unlimited wants
1.10 The table below shows the production possibilities of Country X for two goods. What is the
opportunity cost of increasing wool production from point D to E in Country X?
Apples(tons)
A
500
B
400
C
300
D
200
E
100
F
0
Wool (bales)
0
4000
8000
12000
16000
20000
A. 400 tons of apples
B. 200 tons of apples
C. 100 tons of apples
D. 4000 tons of apples
1.11 Production is a function of:
A. factors
B. prices
C. costs
D. profits
1.12 Marginal product is....
A. annual output of the most efficient firm in the industry
3
[1 mark]
[1 mark]
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B. what is left the entrepreneurs after he has paid all the expenses
C. the extra output obtain form employing an additional unit of factors
D. what is produced when all factor of production are employed at optimum efficiency
1.13 The study of consumer behavior is mainly concerned with:
[1 mark]
A. knowing about the ways that people spend their money. incorrect
B. predicting the choices people will make in supermarkets. incorrect
C. Understanding how individuals or groups acquire, use and dispose of products,
services,ideas or experiences.
D. testing what people think of advertisements. incorrect
1.14 In a perfect market, price and quantity to be bought are determine by?
A. producers and wholesalers
B. consumers and retailers
C. forces of demand and supply
D. interest of government and sellers
[1 mark]
1.15 Nominal GDP is:
[1 mark]
A. the sum of all monetary transactions that occur in the economy in a year.
B. the sum of all monetary transactions involving final goods and services that occur in the
economy in a year.
C. the amount of production that occurs when the economy is operating at full employment.
D. money GDP adjusted for inflation.
1.16 GDP can be calculated by summing up:
A) Consumption, investment, government purchases, exports, and imports.
B) Investment, government purchases, consumption, and net exports.
C) Consumption, investment, wages, and rents.
D) Consumption, investment, government purchases, and import
[1 mark]
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1.17 A man is fired from his job because he was late for work too many times. While he is
searching for another job he would be classified as__
[1 mark]
A. structurally unemployed.
B. not in the labor force because his employer had a legitimate reason for firing him.
C. cyclically unemployed.
D. frictionally unemployed
1.18 An increase in the general price level is known as:
A. inflation
B. stagflation.
C. deflation.
D. recession
[1 mark]
1.19 The following are characteristics of money except:
A. Durability
B. Accountability
C. Manageability
D. Acceptability
[1 mark]
1.20 The labor force includes those people with a job and....
A. those people who are looking for work.
B. those people training for a job.
C. those people who formerly worked and are now retired.
D. homemakers.
[1 mark]
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SECTION B
20 MARKS
Instructions:
•Read all questions carefully
•Answer all questions
•All answers should be on the answer sheet provided on page 13. Tear the page off and place it inside
your examination script.
QUESTION 1
[20 marks]
1.1 Scarcity of resources is a problem mainly experienced by developing countries. T/F (1 mark]
1.2 When we talk about demand in economics, we are referring to the quantity of something that
people actually buy given their level of income. T/F
(1 mark]
1.3 If the price of coffee, a substitute for tea in consumption, increases, we would expect the
equilibrium quantity of tea to decrease. T/F
(1 mark]
1.4 According to the law of demand, a rise in price causes more of that good to be demanded in
larger quantities. T/F
(1 mark]
1.5 Price elasticity of demand is used to know how consumers respond through a change in quantity
due to a change in the price of a particular product or service. T/F
(1 mark]
1.6 A two - sector circular flow model consists of only households and their dependants counted as
a two sub groups in the economy. T/F
(1 mark]
1.7 A well-functioning capitalistic economy requires private property enforced by law. T/F (1 mark]
1.8 If a country is producing on its production possibility curve, then it cannot produce more of one
good without reducing resources from the production of the other good. T/F (1 mark]
1.9 A librarian is not considered as a factor of production. T/F
(1 mark]
1.10 The relationship between quantities supplied and price move in indirect direction. T/F (1
mark]
1.11 Total revenue is simply calculated by dividing marginal revenue by quantity. T/F (1 mark]
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1.12 The change in total product resulting from a change in a variable input is average product. T/F
[1 mark]
1.13 Average fixed cost is defined as the ration of total cost to the amount of fixed input. T/F
[1 mark]
1.14 Deflation is the highest form of inflation that a country will experience before a recession. T/F
[1 mark]
1.15 A closed economy is an economy where there are only two actors, namely firms and
households. T/F
[1 mark]
1.16 Any reduction of the resources of a country will reduce the production capacity of that country
and will shift the PPCinward. T/F
[1 mark]
1.17 Utility or consumer satisfaction is a subjective view. T/F
[1 mark]
1.18 Diminishing marginal returns is when a consumer enjoys more and more of a product and each
additional unit provides him/her with less satisfaction. T/F
[1 mark]
1.19 The demand curve for a monopolist is the normal down-sloping demand curve. T/F [1 mark]
1.20 A monopolist is a price taker because they accept whatever the customers are willing to pay for
the good or services. T/F
[1 mark]
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SECTION C
20 MARKS
QUESTION 1
1.1 Define the following concepts in economics terminology.
a) Macroeconomics
b) Free market economic system
c) Marginal utility
d) The scarcity problem
[8 marks]
[2 marks]
[2 marks]
(2 marks]
(2 marks]
QUESTION 2
[12 marks]
2.1 List four market structures and give one feature of each one of them [8 marks]
2.2 Which of the following decision would be described as a branch of microeconomics or
macroeconomics?
(4 marks]
Decision
Microeconomics or Macroeconomics
a) A firm's decision whether or not to
expand their production facility of
motor cars
b) Breda and her 4 friends' decision to go
work outside the country so that they
can send money to their families
c) Changes in the total supply of goods and
services in the economy
d) The combined outcome of the decision
of all consumers in the country
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SECTION D
20 MARKS
QUESTION 1
[ 10 marks]
1.1 Draw and label a demand curve for a competitive price taking firm.
[5 marks]
1.2 Refer to the market schedules below and draw a market equilibrium curve which shows the
equilibrium price and equilibrium quantity. Label them correctly [5 marks]
Table 1: market schedule
Price
1
2
3
4
5
Quantity Supplied
200
400
600
800
1000
Quantity Demanded
1000
800
600
400
200
QUESTION 2
[10 marks]
2.1 Describe how each of this type of unemployment affects the labour force.
a) frictional unemployment
b) cyclical unemployment
c) structural unemployment
[2 marks
[2 marks]
[2 marks]
2.2 Use the above information in the table below, draw and label the Production Possibility
Curve for the two combinations given , indicate the different points that you can find in your
diagram.
[4 marks]
Table 2: Production possibility curve
Choice
Maize (Y-axis)
Table grapes (X- axis)
A
50
0
B
47
1
C
42
2
D
32
3
E
20
4
F
0
5
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2.1 Page 11 |
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.l
QUESTION 1
SECTION E
20 MARKS
[11 marks]
1.1 Use the following statistics to calculate the GDEand the GDP(expenditure on GDP)
according to the expenditure method:
[6 marks]
N$ (millions)
Exports of goods and services
Change in inventories
91578
3 603
Final consumption exp by households
265 392
Imports of goods and services
75 917
Final consumption exp by government
85 551
Gross fixed capital formation
62 01
1.2 Describe five functions that commercial banks are mandated to perform in carrying out their
mandate.
[5 marks]
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,I
(
QUESTION 2
[15 MARKS]
2.1 Copy the table below into your answer book and fill in the missing columns.[9 marks]
Table 3: Costs
Output Total
Total
! Total cost Average
Average
(Q)
fixed
variable
, variable
(total) cost
cost
cost
cost
N$
__N$
N$
..
_.,_____..,_...._
0
50
0
---·· ___ 'N$
..i 50
! N$
.,_,.__.,._,,_ .................
, Marginal
cost
N$
3
50
33
'88
4
50
50
100
9
50
100
150
10
50
108
' 158
16
50
150
'200
17
50
155
205
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Student number: ......................................................
ANSWER SHEET FOR SECTION A
Mark the correct answer with an X.
A
B
C
D
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
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Student number: .......................................................
ANSWER SHEETFORSECTION B
Mark the correct answer with an X.
TRUE
FALSE
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
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