economics pre test 26369

(é E = EIR ducation Q KwaZulu-Natal Department of Education \@ WIR tid REPUBLIC OF SOUTH AFRICA —_ 00000082 SAAS ECONOMICS PRE-TEST Winter Classes 2017 Time: 40 minutes Marks: 40

141 Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A-C) next to the question number (1.1.1—1.1.8) in the ANSWER BOOK, for example 1.1.9 C. 1.1.1 How does a leakage impact on the economic activity? A. increases economic activity B. reduces economic activity Cc. reduces employment 1.1.2 If national income increases by R200 million as a result of an investment of R50 million, what is the value of the multiplier? A. 0,25 B. “ Cc. 6,25 1.1.3 A trade barrier that would result in a higher price for consumers is ... A. An import tariff. B. A quota on imports. C. A subsidy on the production of the good 1.1.4 What will be the effect on net exports and aggregate demand if a nation's currency depreciates? Net exports Aggregate demand A.Decrease Increase B.Decrease Decrease C, Increase Decrease 1.1.5 A profit maximizing monopolist would never set his price where the elasticity of demand is? A. E>1 B. E<1 Cc. E=1 1.1.6 The supply curve of a perfect competitor is represented by that part of the MC curve that is above the ... curve. A. Total cost B. Average variable cost Cc. Average cost

1.1.7 The most likely barrier for a firm wanting to compete with firms in the cell-phone industry, such as Vodacom, is ... A. Licensing. B. Capital. Cc. Technical superiority. 1.1.8 Oligopolies do not have as much control over prices as monopolies because of ... A. Policies. B. Advertising. Cc. Competition. 1.1.9 Which market structure is highly dependent on loyalty branding? A. Perfect market B. Monopolistic competition Cc. Monopoly 1.1.10 Price formation for the individual firm under the perfect market is determined by the... A. Owner B. Market Cc. Dominant firm (10 x 2 =20)

1.2 Choose a description from COLUMN B that matches the item in COLUMN A. Write only the letter (A-l) next to the question number (1.2.1-1.2.8) in the ANSWER BOOK for example 1.2.9 J COLUMN A COLUMN B 1.2.1 Multiplier effect A police and defence 1.2.2 Economic loss B smallest individual and independent producing unit 1.2.3 Duopoly Cc total revenue equals total cost 1.2.4 Lagging indicator D small initial change in spending 1.2.5 Community goods produces a_ proportionally larger increase in national income 1.2.6 Heterogeneous E average revenue is less than average 1.2.7 Firm cost 1.2.8 Progressive taxation F two firms that dominate an industry 1.2.9 Explicit cost G products that are not the same 4.2.10 Normal profit H government intervention to redistribute income equally | a policy used by the Reserve Bank to stabilise prices J does not change until after the business cycle has changed K actual expenditure of a business such as purchasing raw materials, paying wages and interest (10 x 1=10)

1.3 Give ONE term for each of the following descriptions. Write only the term next to the question number (1.3.1-1.3.6) in the ANSWER BOOK. 1.3.1. A wage rate set by the government below which no employer may pay his/her workers 1.3.2 The period of production where only the variable factors of production can change. 1.3.3. Ratio of export and import prices. 1.3.4 The value of the next best alternative 1.3.5 Many unnecessary laws and other barriers to competition in South Africa have been removed. 1.3.6 A section of the economy that produces goods and services of the same kind. 1.3.7. The costs that the community incurs. 1.3.8 Whenthe government sells more than 50% of state-owned shares of a_ public enterprise. 1.3.9 Prices of goods and services that are set by the government. 1.3.10 The profit that a business makes that is more than the normal profit. (10 x 1=10) TOTAL SECTION: 40