ECONOMICS FIRST TERM EXAMINATION 2015- 2016

GRADE 10
1: Multiple Choice Questions
1. There exists unlimited wants but limited resources to produce the
goods and
services to satisfy those wants. This is called
a. Needs
b. Economic Problem
c. Production
d. Enterprise
2. The people who have an enterprise and can control and manage
firms are
called:
a. Factors of Production
b. Entrepreneurs
c. Free Goods
d. Labour
3. Man-made resources which help to produce other goods and
services are
known as:
a. Merit Good
b. Consumer Goods
c. Capital Goods
d. Wants
4. In __________________________ economic system there is no role for
government
and no taxes.
a. Planned
b. Market
c. Mixed
d. Public
5. When market economy and planned economy are working
together it is called:

a.
b.
c.
d.

Free market economy

Planned Economic system
Mixed Economic System
Public Economic system

6. In ______________________ economic system, decision on what to

produce, how to produce and for whom to produce are taken by
the government.
a. Free market
b. Planned
c. Mixed
d. Public
7. An extension in demand curve is the increase in quantity
demanded when
a. Demand falls
b. Demand increases
c. Supply increases
d. Price Decreases
8. Coke and Pepsi are
a. Complementary goods
b. Substitute goods
c. Not related
d. Public Goods
9. What happens to Demand for ice cream in summers?
a. It Increases
b. It Decreases
c. There is no Change
d. People dont eat ice-cream in summers
10.
When the price of bicycles rises, people use fewer bicycles.
So the demand
curve for helmets will
a. Shift to the right
b. Shift to the left
c. No Change
d. Increase
11.
There is an introduction of better technology and now more
goods can be produced. This will
a. Increase supply
b. Decrease supply
c. Decrease Demand
d. No Change

12.
When the profitability of a good falls, less people want to
produce that good. So:
a. Supply will Fall
b. Supply will Rise
c. Supply will not change
d. There will be more of that good in the market
13.
a.
b.
c.
d.

Equilibrium Price is where

Market supply is greater than market demand
Market supply is less than market demand
Market demand is less than market supply
Market Demand is equal to market supply

14.
a.
b.
c.
d.

Excess Demand is when

Quantity demanded is greater than quantity supplied
Quantity demanded is less than quantity supplied
Quantity demanded is equal to quantity supplied
Price is in equilibrium

15.
Price
Supply Curve

E
P
Demand Curve
Qs

Qd
Quantity

The above graph shows that

a. At price P, quantity
supplied
b. At price P, quantity
c. At price P, quantity
demanded
d. At price P, quantity

demanded is greater than quantity

demanded is less than quantity supplied
supplied is greater than quantity
demanded is equal to quantity supplied

16.
Price
Supply Curve

E
P
Demand Curve
Qs

Qd
Quantity

The above graph shows that

a.
b.
c.
d.

At
At
At
At

price
price
price
price

P,
P,
P,
P,

there is excess supply

there is excess demand
quantity demanded is equal to quantity supplied
P is the Equilibrium Price

17.
Price Elasticity of Demand (PED) is
a. The responsiveness of quantity demanded to changes in price
of that good
b. The quantity of demand that increases when price changes
c. The responsiveness of quantity demanded to changes in the
price of its substitute good
d. The quantity of demand that falls when price changes
18.
Price Elasticity of Supply (PES) is
a. The quantity of supply that increases when price increases
b. The quantity of supply that decreases when price decreases
c. The responsiveness of quantity supplied to changes in price of
that good

d. The responsiveness of quantity demanded to changes in price

of its substitute.

Section B: Short Questions

1. What are needs? Give two Examples. (3 points)
Need is a good or service essential for living. Food and clothes
2. What is the basic Economic Problem? (2 points)
There exists unlimited wants but limited resources to produce the
goods and services to satisfy those wants
3. Name the three Factors of Production. (3 points)
Land
Labour
Capital
4. What is a public good? (2 points)
Goods and services provided by the government, as others
benefit from it, even if they dont pay for them.
5. Explain what is mixed economic system. (3 point)
It is when market economy and planned economy are working
together.
6. What is Demand? (2 points)
Demand is a want or willingness of consumer to buy goods and
services.
7. What is Extension in Supply? (3Points)
It refers to how supply increases with a rise in the price of the
product.
8. What is market Price? (4 point)
Market price is also called equilibrium price. It is set where
quantity demanded is equal to market supply.

9.
Price
Supply Curve

E
Demand Curve

Qd=Qs

Quantity

P is the market price.

An increase in advertisement caused an increase in demand.
i)

Draw the Demand and Supply curves to show the increase in

demand. (4 points)
Price
Supply Curve
P2
P

New Demand Curve

Demand Curve

Qd=Qs

ii)

Quantity

What Happens to market price and quantity? (4 points)

Market Price will increase
Quantity will increase

10. What do we mean when we say supply is price inelastic? (2 points)

It is when a small change in price will bring a smaller change in
quantity supplied.