Economics
Final Exam Semester 1/2024
Teacher : JHK
Instructions :
1. Read the instructions in each part carefully.
2. Answer all the questions correctly in the space provided.
3. You are advised not to spend too much time on one question.
4. If you have finished, please re-check your answer. Make sure you have made no
mistake and leave no answer blank.
Do Your Best! God Bless you!
Remember, God has a big and beautiful plan for you – Jeremiah 29 : 11
Part 1 MCQ
1. Which of the following is a characteristic of a perfectly competitive market?
A) Firms have some control over prices
B) There are significant barriers to entry
C) All firms sell identical products
D) Firms engage in advertising to differentiate their products
2. In which type of market structure do firms produce differentiated products
and have some control over the price?
A) Perfect competition
B) Monopolistic competition
C) Oligopoly
D) Monopoly
3. Which of the following is a feature of a monopoly?
A) Many firms compete to sell identical products
B) Firms are price takers
C) There is only one firm in the industry
D) There is no control over price by the firm
4. In an oligopoly, firms typically:
A) Compete on price alone
B) Sell identical products
C) Are highly interdependent in setting prices
D) Have no barriers to entry
5. Which of the following is a barrier to entry in an oligopoly?
A) Homogeneous products
B) Low startup costs
C) High advertising costs
D) Low technological expertise
6. What is the main difference between monopolistic competition and perfect
competition?
A) In monopolistic competition, firms sell differentiated products
B) In monopolistic competition, there are no barriers to entry
C) In perfect competition, firms can set their own prices
D) In monopolistic competition, firms are price takers
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7. Which of the following is an example of a monopoly?
A) A local bakery selling bread
B) A large oil company controlling all oil production in a country
C) A fast-food restaurant chain
D) A smartphone manufacturer with several competing brands
8. What is a key characteristic of a perfectly competitive market in terms of
product offerings?
A) Firms differentiate their products
B) Firms produce a standardized or homogeneous product
C) Firms have market power to influence prices
D) Firms only produce luxury goods
9. In which market structure is there a tendency for firms to engage in
collusion or price-fixing?
A) Perfect competition
B) Monopolistic competition
C) Oligopoly
D) Monopoly
10. Which of the following is most likely to result in a decrease in the level of
competition in a market?
A) Reduction in consumer preferences for differentiated products
B) High barriers to entry such as patents or high capital costs
C) Increase in consumer awareness about product choices
D) Entry of new firms into the market
11. Which of the following is a primary goal of trade unions?
A) To maximize profits for employers
B) To ensure the payment of government taxes
C) To negotiate better wages and working conditions for workers
D) To reduce the number of employees in a company
12. Which of the following actions is most likely to be taken by a trade union
when negotiating with employers?
A) Reducing the working hours of employees without compensation
B) Organizing a strike to pressure employers into meeting workers' demands
C) Increasing production quotas for workers
D) Encouraging workers to accept lower wages
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13. What is the definition of "economies of scale"?
A) The cost advantage that firms experience as they increase the scale of their production
B) The increase in the cost of production when firms decrease their output
C) The effect of the government increasing taxes on firms
D) The ability of firms to set prices higher than the cost of production
14. In a market economy, resources are allocated based on:
A) Central planning by the government
B) Monopolistic competition
C) The availability of foreign aid
D) The size of the government budget
15. How do markets allocate resources in a competitive economy?
A) By distributing goods equally among all citizens
B) using government quotas to limit production
C) By setting prices through the forces of supply and demand
D) By assigning specific resources to different firms based on production needs
Part 2 ESSAY
1. Explain the benefits that a consumer might gain from a market economic system [4]
2. Discuss whether or not a government should allow monopolies [8]
3. Discuss whether or no consumers are likely to benefit from state-owned enterprises
becoming private sector firms [8]
4. Explain 2 reasons why a firm may become more capital intensive as it grows [4]
5. Give several reasons on why productivity within an organization may drop [4]
6. Discuss whether or not increasing government spending will enable a government to
achieve its economical aim for the country. [8]
7. Explain the difference between macro and micro economics [4]
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