Form 4 Economics Easter Mid Term 2021

1. A movement along the demand curve results from a change in:

(A) Taste
(B) Supply
(C) Income
(D) Price
2. Which of the following could increase the price elasticity of supply of a product?
(A) A change in consumer preferences
(B) An increase in the price of complements
(C) An increase in income
(D) An increase in the time period under consideration
3. If the price of good X rises and as a result there is a fall in the demand for good Y, then:
(A) Goods X and Y are substitutes
(B) The demand for good Y is price inelastic
(C) The demand for good Y is price elastic
(D) Goods X and Y are complements
4. A situation where quantity demanded exceeds quantity supplied at a given price indicates:
(A) Surplus
(B) Shortage
(C) Equilibrium
(D) Excess supply
5. In which of the following situations will a normal supply curve for farm produce slope upwards from
left to right?
(A) Farmers’ profit margins increase as price increases
(B) Farmers are willing to increase supply as demand increases
(C) Farmers pass on increased costs to consumers
(D) Farmers are willing to produce more as price increases
6. Which of the following is MOST likely to occur if there is an increase in the demand for cameras?
(A) The price of cameras will fall
(B) The price of cameras will rise
(C) The supply of cameras will rise
(D) The price and supply of cameras will remain the same
7. Which of the following will MOST likely result in a shift to the right in the supply curve for flour?
(A) Increased taxation on wheat producers
(B) Increased advertising by wheat producers
(C) Government subsidies to wheat producers
(D) Legislation to limit the use of pesticides by wheat producers
8. All things being equal, an increase in the supply of a good will result in:
(A) An increase in price and quantity traded
(B) A fall in price and an increase in the quantity traded
(C) A decrease in price and quantity traded
(D) A rise in revenue and a fall in quantity traded

Items 10 refers to the table below.

Price of Market Market
Potatoes Demand Supply
($) (000 kg) (000 kg)
4 700 100
8 500 200
12 350 350
16 200 530
20 100 700

9. What is the equilibrium price?

(A) $ 4
(B) $ 8
(C) $ 12
(D) $ 16
10. Equilibrium price is also known as?
(A) Market clearing price
(B) Price Floor
(C) Price Cap
(D) Price Ceiling
11. An increase in the price of flour is MOST likely to be followed by an immediate:
(A) Rise in the quantity demanded for bread
(B) Fall in the quantity supplied of flour
(C) Rise in the quantity supplied of flour
(D) Rise in the quantity demanded for flour
12. A government reduces tax on carrots. This causes the price of carrots to fall by 50%. Demand then
rise rises by 50%. The price elasticity of demand for carrots in this case is:
(A) 0
(B) 0.4
(C) 1
(D) 2.5

Item 14 refers to the table below which shows the price of a product, the quantity demanded (Qd) and
quantity supplied (Qs).
Price Qd Qs
(s) (Units) (Units)
10 8 20
8 12 16
6 14 14
4 16 12
2 29 8

13. At which of the following prices are there shortages in the market?
(A) $2 and $4
(B) $4 and $6
(C) $6 and $8
 (D) $8 and $10
14. A shift in the demand curve for a commodity could result from a change in:
(A) Price
(B) Supply
(C) Conditions of supply
(D) Conditions of demand
15. The Demand curve shows that:
(A) As price decreases, demand increases
(B) Price changes are always in the same direction as demand changes
(C) As price increases, quantity demanded increases
(D) As price decreases, quantity demanded increases
16. Which of the following will not shift an individual consumer’s demand curve for butter?
(A) The price of butter
(B) The price of margarine
(C) The consumer’s income
(D) The consumer’s tastes
17. According to economic theory, a change in demand of any good is not caused by:
(A) Changes in consumer’s preference for that good
(B) Changes in the general income levels of the consumers who buy that good
(C) An increase or decrease in the population
(D) Changes in the price of that good
18. A rise in consumers’ income will cause:
(A) A movement along the demand curve
(B) An increase in quantity demanded
(C) The demand curve to the shift to the right
(D) The demand curve to shift to the left
19. A demand curve is normally drawn with:
(A) Price on the vertical axis and population on the horizontal axis
(B) Price on the vertical axis and quantity demanded on the horizontal axis
(C) Quantity demanded on the vertical axis and income on the horizontal axis
(D) Quantity demanded on the vertical axis and price on the horizontal axis
20. All of the following are conditions of demand except:
(A) Productivity
(B) Population
(C) Income
(D) Tastes and fashion
21. The supply curve shows:
(A) The amount that sellers are willing and able to offer
(B) The amount that sellers are willing and able to offer for sale at all possible prices
(C) A list of price and quantity supplied combinations
(D) The amount consumers will buy from what is supplied

22. A decrease in supply, ceteris paribus, will:

(A) Raise both the equilibrium price and the equilibrium quantity
(B) Reduce both the equilibrium price and equilibrium quantity
(C) Raise the equilibrium price and reduce the equilibrium quantity
 (D) Reduce the equilibrium price and raise the equilibrium quantity
23. Which of the following is not a determinant of the supply for a product?
(A) Consumer’s incomes
(B) The price of the product
(C) The prices of inputs to the product
(D) The state of technology
24. A fall in the price of steel will cause the supply curve for motor vehicles to:
(A) Become steeper
(B) Intersect with the demand curve
(C) Shift to the right
(D) Shift to the left

25. All of the following features are characteristics of perfect competition EXCEPT
(A) Many buyers and one seller
(B) Freedom of entry and exit
(C) Selling of homogeneous products
(D) Perfect knowledge of market conditions

26. A market structure in which there are many buyers and sellers and where the products are identified by
their brandname is known as
(A) A monopoly
(B) A perfect competition
(C) A monopolistic competition
(D) An oligopoly
27. In a monopoly:
(A) There are many firms
(B) The product has no close substitutes
(C) There are low barriers to entry
(D) The firm follows the price in the market
28. In perfect competition there is/are:
(A) Product differentiation
(B) A few firms
(C) Freedom of entry and exit
(D) Lack of perfect knowledge
29. An oligopoly:
(A) Is an industry in which there is price rigidity
(B) Produces only homogeneous outputs
(C) Is an industry into which entry is relatively easy
(D) Is a situation in which there is collusion

30. A market of few sellers and many buyers is:

(A) A monopoly
(B) Perfect competition
(C) Monopolistic competition
(D) An oligopoly
31. All of the following are barriers to entry except:
(A) Government regulations
(B) Patents
(C) The ‘know-how’ of a firm
(D) Interdependence
32. Which is a feature of monopolistic competition?
(A) A small number of firms
(B) The firms producing homogeneous output
(C) High barriers to entry
(D) Product differentiation
33. Stock exchange falls under which type of market structure?
(A) Perfect competition
(B) Monopolistic competition
(C) Cartel
(D) Oligopoly
34. A perfectly competitive firm maximizes profit at the level of production at which:
(A) AC = MC
(B) AR = AC
(C) AR > MC
(D) AR = MC

35. Which of the following will NOT have to change for a planned economy to become a market
economy?
(A) The type of government in the country
(B) The method of allocating resources
(C) The price of goods in the private sector
(D) The ownership of resources by the state sector
36. In a mixed economy, resources are allocated by
(A) The government alone
(B) The firms alone
(C) Consumers alone
(D) The government, firms & consumers
37. What type of economic system do MOST CARICOM countries have?
(A) Capitalist
(B) Mixed
(C) Socialist
(D) Centrally Planned

38. When a country changes from a planned economy to a market economy, there will necessarily be an
increase in
(A) Rationing of basic foodstuff
(B) Government subsidies for industry
(C) Price control of luxury items
(D) Choice for consumers

39. Rationing is a feature of which type of economic system

(A) Traditional economic system
(B) Planned economic system
(C) Free market economy
 (D) Mixed Economy

40. Double coincidence of wants existed with?

(A) Bartering
(B) The financial sector
(C) The central bank
(D) The informal sector

41. The simple circular flow of income shows:

(A) The flow of income from households to firms
(B) The flow of expenditure from households to firms
(C) The flow of savings from households to the financial sector
(D) The flow of taxes from firms to the government
42. In National Income Theory, all of the following are forms of expenditure in an economy except:
(A) Consumption
(B) Investment
(C) Expenditure on imports
(D) Expenditure on exports
43. The difference between gross domestic product and gross national product is:
(A) Net property income from abroad
(B) Capital consumption
(C) Taxation and subsidies
(D) Imports and exports
44. What is national income?
(A) Government taxation minus subsidies
(B) Imports minus exports of a country
(C) A measure of inflows and outflows for a given time period, usually one year.
(D) A measure of economic activity of a country for a given time period, usually one year.
45. How is nominal output different form real output?
(A) Real output has been adjusted for any price increases
(B) Nominal output has been adjusted for price increases
(C) Real output is what the economy is capable of producing if all its resources are fully employed.
(D) Real output is the output for a given year expressed in terms of prices in that year.

46. To obtain gross domestic product at factor cost from gross domestic product at market prices,
economists must:
(A) Add the cost of imported raw materials
(B) Add subsidies and subtract taxes
(C) Add exports and subtract imports
(D) Subtract capital consumption

47. A fall in aggregate demand, ceteris paribus, may lead to:

(A) An increase in the price level
(B) Recovery after a recession
 (C) Unemployment
(D) An increase in output
48. Expansionary fiscal policy is most likely to:
(A) Worsen a recession
(B) Help an economy to recover from a recession
(C) Reduce inflation
(D) Increase unemployment
49. Which of the following is an expansionary monetary policy?
(A) Buying bonds on the open market
(B) Increasing interest rates
(C) Increasing government spending
(D) Reducing the repayment period on loans.
50. Which type of unemployment will retraining programmes help to reduce?
(A) Search unemployment
(B) Real-wage unemployment
(C) Demand-deficit unemployment
(D) Structural unemployment
51. A market structure in which there are many buyers and sellers and where the products are identified
by their brandname is known as:
(A) A monopoly
(B) A perfect competition
(C) A monopolistic competition
(D) An oligopoly
52. Which of the following would increase the price elasticity of supply of a product?
(A) A change in consumer preferences
(B) An increase in the price of complements
(C) An increase in income
(D) An increase in the time period under consideration
53. Which of the following groups makes loanable funds available from savers to spenders for
consumption and investment?
(A) The foreign trade sector
(B) The government
(C) The chamber of commerce
(D) The financial sector
54. Justin takes ½ of his salary every month and purchases shares in the credit union in order to later
purchase a sports car.

Which function of money is this ½ of his salary performing?

(A) A medium of exchange

(B) A standard of deferred payment
(C) A store of value
(D) A standard of deferred exchange

55. Rob and Steele joined an underground group who were printing money

Which quality of money is the group eroding?

 (A) Durability
(B) Portability
(C) Authenticity
(D) Acceptability
56. Which of the following must remain stable if money is to successfully function as a store of value?
(A) Prices
(B) Employment
(C) The exchange rate
(D) The rate of interest
57. Individuals who speculate on rising share prices at the stock exchange are referred to as?
(A) Stags
(B) Bulls
(C) Bears
(D) Brokers
58. Which of the following is a monetary measure that could be used to increase employment?
(A) Increasing interest rates
(B) Reducing interest rates
(C) Reducing government expenditure
(D) Increasing government expenditure
59. The Governor of the Central Bank of Trinidad and Tobago is concerned with the level of inflation in
the country caused by excessive consumer spending. He therefor, increases the rate of interest on
borrowing. This is an example of:
(A) Deflation
(B) Monetary policy
(C) Public finance
(D) Fixed policy
60. Henry Money has been unemployed for three months even though the economy is in a boom.
Recently, he turned down a job which paid a salary that is slightly above the unemployment benefits
he receives. This is an example of:
(A) Real unemployment
(B) Structured unemployment
(C) Real-wage unemployment
(D) Cyclical unemployment

END
11. All of the following features are characteristics of perfect competition EXCEPT
(A) Many buyers and one seller
(B) Freedom of entry and exit
(C) Selling of homogeneous products
(D) Perfect knowledge of market conditions

12. A market structure in which there are many buyers and sellers and where the products are identified by
their brandname is known as
(A) A monopoly
(B) A perfect competition
(C) A monopolistic competition
(D) An oligopoly

13. In a monopoly:
(A) There are many firms
(B) The product has no close substitutes
(C) There are low barriers to entry
(D) The firm follows the price in the market

14. In perfect competition there is/are:

(A) Product differentiation
(B) A few firms
(C) Freedom of entry and exit
(D) Lack of perfect knowledge

15. An oligopoly:
(A) Is an industry in which there is price rigidity
(B) Produces only homogeneous outputs
(C) Is an industry into which entry is relatively easy
(D) Is a situation in which there is collusion

16. A market of few sellers and many buyers is:

(A) A monopoly
(B) Perfect competition
(C) Monopolistic competition
(D) An oligopoly
17. All of the following are barriers to entry except:
(A) Government regulations
(B) Patents
(C) The ‘know-how’ of a firm
(D) Interdependence