Grade:

1- Why is economics considered as a social science? (2p)

a) Because economics is the same as physics and much of the work can take Place
in Laboratories.
b) Because economics is natural science
c) Because economics is the study of human behavior
d) a and b

2- Because resources are limited for everyone in the economy, economics is

considered a science of _____. (2p)
a) social science b) Scarcity
c) law d) Natural

3- What are the two sub-fields of economics? (2p)

a) Microeconomics
b) Macroeconomics
c) Minieconomics
d) a and b

4- Which of the following is the study of how households and firms make
decisions and interact in markets? (2p)
a) Microeconomics
b) Macroeconomics
c) Minieconomics
d) a and b

5- Which of the following is concerned with how the overall economy such as
unemployment and inflation works.? (2p)
a) Microeconomics b) Macroeconomics
c) Minieconomics d)a and b
6- The curve used to determine different combinations of two goods, opportunity
cost, and economic growth is known as the _____. (2p)
a) Production Possibilities Frontier(PPF)
b) Demand curve
c) Supply curve
d) b and c

7- In the following diagram, moving from PPF to PPF2 would represent economic
_____. (2p)
a) Growth b) Decline c) Inflation d) a and b

Figure 1

8- In Figure 1, by increasing the quality of resources, PPF will moved to------. (2p)
a) PPF1 b) PPF2
c)Not changed d) a and b
 Descriptive Questions

1- What is the main economic problem and how an economy should solve this
problem? (16 p)

2- What are the four factors of production? Explain two factors. (12p)

3- A) What does Production Possibilities Frontier (PPF) show? (16 p)

b) Create a PPF diagram and show a position where an economy is inefficient. Why?
c) Show a position where an economy is unable to reach. Why?
 4- In the following diagram: (16 p)
a) What is the opportunity cost of producing more sugar when moving from point
C to point B?

b) What is the opportunity cost of producing more wheat when moving from
point A to point C?

5- Determine normative and positive sentences: (14 p)

a) Raising the tax on alcohol will lead to a fall in the demand of alcohol.
b) The free market is the best way to allocate resources.
c) The government should increase tax on alcohol.
d) Inflation should reach 5 percent by the end of the year.
e) Inflation should be brought down.
f) The service sector in Singapore will grow by 15 percent in size over the next
five years.
g) In my opinion unemployment should be decrease.