Sample Exam for Economics
FUNDAMENTALS OF ECONOMICS 11th December 2011 EXAMINATION PAPER
Section A Section B Answer ALL questions in SECTION A. Answer TWO questions in SECTION B. Clearly cross out surplus answers.
Time Allowed: 2.5 Hours
Candidates are allowed to bring in a scientific calculator for this module. Graph paper will be provided by the Centre.
© NCC Education Ltd 2011
SECTION A ANSWER ALL QUESTIONS
Question 1 a) Explain what is meant by the opportunity cost of producing a good.
(2 marks)
b) Define each of the following models and explain the differences between the two. i. ii. the free market model
(2 marks)
the command economy model
(2 marks)
c) Briefly define the following terms: i. ii. iii. iv. positive economics
(1 mark)
normative economics
(1 mark)
micro-economics
(1 mark)
macro-economics
(1 mark)
Total: 10 marks
Question 2 a) Define the following concepts: i. ii. iii. Demand
(2 marks)
Supply
(2 marks)
Equilibrium price
(1 marks)
b) Explain what forces lead to markets tending to move towards their equilibrium price.
(5 marks)
Total: 10 marks
Fundamentals of Economics
Page 1 of 5
© NCC Education Ltd 2011
Question 3 a) Discuss the main features of the following forms of organisation: i. ii. sole trader
(3 marks)
partnership
(3 marks)
b) Identify reasons why public limited companies’ businesses may not in practice maximise profit.
(4 marks)
Total: 10 marks
Question 4 a) Draw a simple two sector circular flow diagram of the macro-economy, labelling both the two groups participating in this simple model of the economy and the flows of activity and money between them.
(5 marks)
b) Define the term ‘gross domestic product’.
(2 marks)
c) Briefly explain the problem posed by ‘double counting’, when seeking to measure gross domestic product.
(3 marks)
Total: 10 marks
Question 5 a) In general terms what are the main determinants of aggregate demand in a model of the macro-economy
Section A Section B Answer ALL questions in SECTION A. Answer TWO questions in SECTION B. Clearly cross out surplus answers.
Time Allowed: 2.5 Hours
Candidates are allowed to bring in a scientific calculator for this module. Graph paper will be provided by the Centre.
© NCC Education Ltd 2011
SECTION A ANSWER ALL QUESTIONS
Question 1 a) Explain what is meant by the opportunity cost of producing a good.
(2 marks)
b) Define each of the following models and explain the differences between the two. i. ii. the free market model
(2 marks)
the command economy model
(2 marks)
c) Briefly define the following terms: i. ii. iii. iv. positive economics
(1 mark)
normative economics
(1 mark)
micro-economics
(1 mark)
macro-economics
(1 mark)
Total: 10 marks
Question 2 a) Define the following concepts: i. ii. iii. Demand
(2 marks)
Supply
(2 marks)
Equilibrium price
(1 marks)
b) Explain what forces lead to markets tending to move towards their equilibrium price.
(5 marks)
Total: 10 marks
Fundamentals of Economics
Page 1 of 5
© NCC Education Ltd 2011
Question 3 a) Discuss the main features of the following forms of organisation: i. ii. sole trader
(3 marks)
partnership
(3 marks)
b) Identify reasons why public limited companies’ businesses may not in practice maximise profit.
(4 marks)
Total: 10 marks
Question 4 a) Draw a simple two sector circular flow diagram of the macro-economy, labelling both the two groups participating in this simple model of the economy and the flows of activity and money between them.
(5 marks)
b) Define the term ‘gross domestic product’.
(2 marks)
c) Briefly explain the problem posed by ‘double counting’, when seeking to measure gross domestic product.
(3 marks)
Total: 10 marks
Question 5 a) In general terms what are the main determinants of aggregate demand in a model of the macro-economy