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Wycherley International School-Gampaha

Term II- 2023/2024
Mock Examination
Economics-Paper 1

Grade 10 A/B Duration -: 45 minutes

Name:………………………………………….. Class……………

INSTRUCTIONS
 There are thirty 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 record your choice in soft pencil on the multiple

choice answer sheet.

 Follow the instructions on the multiple choice answer sheet.

 Write in soft pencil.

 Do not use correction fluid.

 You may use a calculator..

INFORMATION

 Total marks for this paper is 30.

Total
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1.Which statement about factors of production is correct?

A Capital is the money people keep in the bank.

B Enterprise is found more in service industries than in manufacturing industries.

C Labour includes only those who work using their hands.

D Land includes resources found in or under the sea.

2. The production possibility curve of a country has shifted from PPC1 to PPC2

What could have caused this shift?

A a decrease in the rate of unemployment
B a fall in the birth rate
C improved education
D outdated technology not being replaced
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3. A government spends $100m on subsidising wind farm construction instead of spending

it on an increase in healthcare.
Which economic concept does this spending decision illustrate?
A external cost
B free goods
C market disequilibrium
D opportunity cost

4. What is the cause of scarcity in an economy?

A high employment levels
B high investment levels
C unlimited resources
D unlimited wants

5. Malaysia is a mixed economy.

Which statement about a mixed economy is necessarily correct?
A private industry will provide most of the manufactured goods
B the government will provide public goods and may provide merit goods
C the primary sector will employ most workers
D the transport network will be heavily subsidized

6. What is most likely to increase the geographical mobility of labour?

A an increase in the amount of credit available to firms
B an increase in the quantity of low-cost housing
C an increase in spending by firms on research and development
D an increase in spending by government on apprenticeships and training

7. The diagram shows the supply curve for a good.

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What is the name and cause of the movement from X to Y?

A a contraction of supply caused by a decrease in demand
B a contraction of supply caused by an increase in demand
C an extension of supply caused by a decrease in demand
D an extension of supply caused by an increase in demand

8. What is the correct formula to calculate price elasticity of supply?

A the percentage change in price divided by the change in quantity supplied
B the percentage change in price divided by the percentage change in quantity supplied
C the percentage change in quantity supplied divided by the change in price
D the percentage change in quantity supplied divided by the percentage change in price

9. What is the most likely cause of a product having a price elasticity of demand greater
than one?
A The product has a close substitute.
B The product is a habit-forming good.
C The product is a necessity.
D The product requires only a small proportion of consumer income.

10. A government believes that people eat too much sugar but not enough fruit.
Which combination of policies would the government introduce?
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11. Which row shows a characteristic of money and a function of money?

12. When will a central bank act as lender of last resort to a commercial bank?
A when a commercial bank faces a liquidity crisis
B when a commercial bank fails to make a profit
C when a commercial bank needs to raise share capital
D when a commercial bank reduces its lending rates

13. For some illnesses, wearing a face mask has a benefit as it could prevent people from
getting infected. Not all people are willing to wear face masks.
Based on the statement above, why would there be an inefficient allocation of face masks
in the free market?
A Consumers in the free market only consider private costs and benefits.
B Face masks are non-rival and non-excludable.
C There is abuse of monopoly power by the producer of face masks.
D There is perfect information in the free market

14. Why do female workers in many countries have a lower income than male workers?
A Female workers are more experienced.
B Female workers are more likely to be employed part-time.
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C Female workers are more likely to be in trade unions.

D Female workers have more qualifications.

15. A government decides to reduce air pollution in city centres by giving financial
assistance to bus companies, reducing their costs of production and prices for passengers.
Which type of policy measure is this?
A a maximum price
B a minimum price
C a subsidy
D regulation

16. The table shows the activities of four firms.

Which combination of firms would be an example of horizontal integration?

A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

17. The price of bread rose by 5% and the quantity demanded fell by 4%.
What was the price elasticity of demand for bread?
A –0.4 B –0.8 C –1.25 D –2.0

18. The diagram shows a firm’s total cost (TC) curve.

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What is the average variable cost if the firm produces 10 units of output?
A $4 B $5 C $40 D $50

19. A country is experiencing high economic growth caused by an increase in consumer

spending. What are the most likely effects on inflation and unemployment?
A inflation falls and unemployment falls
B inflation falls and unemployment rises
C inflation rises and unemployment falls
D inflation rises and unemployment rises

20. An economy is experiencing a sustained fall in the general price level.

Which term is used to describe this?
A deflation
B depreciation
C market disequilibrium
D recession
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21. A government has introduced a tax on a necessity. Producers have passed on a large
proportion of this tax to consumers in the form of higher prices. Which row is correct?

22. A country closed its oil wells because it had used up most of its supplies of oil.
What type of unemployment would this cause?
A cyclical
B frictional
C seasonal
D structural

23. What is an advantage of international specialisation?

A choice is limited
B countries become overdependent on each other
C resources are used more efficiently
D transport costs are decreased

24. Which statement is correct about the Human Development Index (HDI) and real GDP?
A HDI includes exports and imports while real GDP does not.
B HDI includes life expectancy and years of schooling while real GDP does not.
C HDI includes the level of output while real GDP does not.
D HDI includes the level of unemployment in the population while real GDP does not.

25. As a country develops economically, what is most likely to happen?

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A There will be an increase in productivity.

B There will be an increase in the birth rate.
C There will be an increase in the death rate.
D There will be reduced occupational mobility.

26. An Argentine product initially sells in the US for $50 when the exchange rate between
the two countries is 5 pesos to 1 dollar.
The exchange rate changes to 10 pesos to 1 dollar and the price of the product remains
unchanged in Argentina.
What will be the new price of the product in the US?
A $5 B $25 C $100 D $500

27. What is an example of a government macroeconomic aim?

A a minimum of 10 years of schooling
B a sales tax of 10% on consumer goods
C a target rate of 2% inflation
D increasing pay for nurses

28. Which policy measure is most likely to reduce the current account deficit of the balance
of payments of an economy?
A decrease the level of subsidies to domestic producers
B increase infrastructure spending to increase domestic productivity
C increase interest rates
D remove import tariffs

29.The table shows a country’s exports and imports.

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What was the country’s balance of trade in goods and services?

A a deficit of $7 million
B a deficit of $13 million
C a surplus of $7 million
D a surplus of $13 million

30.Which combination of changes would raise the price of the Pakistani rupee on the
foreign exchange market?

(30 marks)