MATRICULATION AND SECONDARY EDUCATION CERTIFICATE EXAMINATIONS BOARD
UNIVERSITY OF MALTA, MSIDA
MATRICULATION EXAMINATION
INTERMEDIATE LEVEL
SAMPLE PAPER
SUBJECT:
DATE:
TIME:
ECONOMICS
SAMPLE PAPER
3hrs
Answer SIX questions in total: THREE from Section A and THREE from Section B.
Section A and Section B carry 50% of the marks each. Each question carries equal marks.
Section A
Answer any three questions
1
a. What is the basic economic problem? (8 marks)
b. What do you understand by the term 'opportunity cost'? (6 marks)
c. Use a production possibility curve to explain the allocation and re-allocation of scarce
resources. (6 marks)
2
a. Define 'price elasticity of demand' and use diagrams to show the possible outcomes. (10
marks)
b. How is price elasticity of demand calculated? (4 marks)
c. In what ways is knowledge of price elasticity of demand useful to producers? (6 marks)
3
a. Distinguish between a movement and a shift in the supply curve. (6 marks)
b. Distinguish between price elastic and price inelastic supply and explain its determinants. (10
marks)
c. Can price elasticity of supply ever be zero? (4 marks)
4
a. What are the features of ‘perfect competition? (14 marks)
b. Which feature makes ‘perfect competition’ unrealistic? (2 marks)
c. Which markets come close to the theory of perfect competition? (4 marks)
5
a. Distinguish between economies and diseconomies of scale. (8 marks)
b. Briefly explain four internal economies of scale (8 marks)
c. Briefly explain two external economies of scale (4 marks)
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Section B
Answer any three questions
6
a. What are the main components of AD? (6 marks)
b. What factors cause a shift in the short-run AS? (6 marks)
c. How is equilibrium output reached in the short run? If there is a rise in AD, how would this
affect equilibrium output? (8 marks)
7
During 2012 the Real GDP of Northland was 1.5% while the Nominal GDP was 3.5%.
a. What is the difference between Real GDP and Nominal GDP? (5 marks)
b. How can the GDP of a country be measured? (9 marks)
c. Explain one monetary measure and one fiscal measure that can lead to economic growth. (6
marks)
8
The levels of consumption, savings and investment all have influences on AD.
a. What determines the level of investment in a country? (9 marks)
b. The APC in a country is 0.8 while the MPC is 0.7. Find the APS and MPS and explain the
relationship between these and AD. (6 marks)
c. If last year the interest rate in a country was 4% and this year it is 6%, would MEC increase?
Would this act as an incentive or disincentive for investment? (5 Marks)
9
Unemployment in Malta is 7%. Compared to other countries Malta is performing very well. During
summer this figure usually falls while it increases in winter.
a. How can we measure unemployment? (4 marks)
b. What types of unemployment are there? Relate this to the fact that unemployment increases
in winter in Malta. (8 marks)
c. If the unemployment rate increases in Malta, what measures can be taken to contain it and
possibly decrease it? Explain in relation to AD. (8 marks)
10
The table below shows the inflation rates experienced by Malta during the last years.
Country 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Malta
1.8
2.5
2.4
0.4
2.9
3
2.6
1.3
4.3
2.1
3.3
2.7
a. What are the main causes of inflation? (8 marks)
b. What happens to the value of money when there is inflation in a country? (6 marks)
c. From the table, explain where Malta probably became more or less competitive in
comparison to other countries. (6 marks)
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