Docstoc

qsd136oct08

Document Sample
qsd136oct08 Powered By Docstoc
					CONFIDENTIAL                                                                     AP/OCT2008/QSD136
                                                 /HB^



                                 UNIVERSITI TEKNOLOGI MARA
                                     FINAL EXAMINATION




     COURSE                             PRINCIPLES OF ECONOMICS
     COURSE CODE                        QSD136
     EXAMINATION                        OCTOBER 2008
     TIME                               2 HOURS




INSTRUCTIONS TO CANDIDATES

1.   This question paper consists of three (3) parts : PART A (15 Questions)
                                                       PART B (4 Questions)
                                                       PART C (5 Questions)

2.   Answer ALL questions from PART A and PART B and three (3) questions only from PART C.

        i) Answer PART A in the Objective Answer Sheet.
       ii) Answer PART B and PART C in the Answer Booklet. Start each answer on a new page.

3.   Do not bring any material into the examination room unless permission is given by the
     invigilator.

4.    Please check to make sure that this examination pack consists of:

         ) the Question Paper
         ) an Answer Booklet - provided by the Faculty
         ) an Objective Answer Sheet - provided by the Faculty
       iv) a Graph Paper - provided by the Faculty




                   DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
                           This examination paper consists of 10 printed pages
© Hak Cipta Universiti Teknologi MARA                                                CONFIDENTIAL
CONFIDENTIAL                                     2                       AP/OCT 2008/QSD136



PART A


1. A firm uses its own retained earnings to finance a project. The use of this amount of
   money

   A.    is free and there is no opportunity cost.
   B.    has an opportunity cost equal to the forgone interest income.
   C.    illustrates the concept of diminishing returns.
   D.    shows the opportunity cost cannot be calculated.


2. Which of the following is not a basic economic question?

    A.   What is to be produced?
    B.   How are these goods to be produced?
    C.   For whom are the goods produced?
    D.   Where to produce the goods?


3. The price elasticity of demand is determined by

    A.   the availability of substitute goods.
    B.   the price of substitute goods.
    C.   consumers' taste and preferences.
    D.   the expectation of future prices.


4. If the price of corn increases, what would be the effect on the supply of wheat?

    A.   The supply of wheat will decrease.
    B.   The supply of wheat will increase.
    C.   The supply of wheat remains the same.
    D.   The net result on the supply curve is indeterminate.


5. The demand curve is drawn as a downward sloping line because

    A.   the commodity has no substitutes.
    B.   an inverse relationship between price of the good and quantity demanded.
    C.   the quantity demanded depends on future price expectations.
    D.   a direct relationship between price of the good and quantity demanded.




© Hak Cipta Universiti Teknologi MARA                                         CONFIDENTIAL
CONFIDENTIAL                                   3                          AP/OCT2008/QSD136



    An increase in which of the following would increase the supply of bus services in
    Malaysia?

    A.   The price of bus fares.
    B.   The price of diesel
    C.   The number of bus companies.
    D.   The demand for bus services.


7. Tea and coffee are example of

    A.   complementary goods.
    B.   substitute goods.
    C.   luxury goods.
    D.   basic goods.


8. If the quantity demanded of tea increases by 2 percent when the price of coffee
   increases by 8 percent, the cross elasticity of demand between tea and coffee is

    A.     4.0
    B.     0.4
    C.     -25.0
    D.     0.25


9. The following illustration shows a market in which the initial equilibrium is at price OP0.
              Price
                   •
                                         S

              P2

              P0

             P1


                                              •>     Quantity


         At OP2,

    A.   there will be excess supply.
    B.   there will be shortage of commodity.
    C.   farmers will cut back production as their total revenue falls.
    D.   farmers will press the government to reduce the guaranteed minimum price.




© Hak Cipta Universiti Teknologi MARA                                          CONFIDENTIAL
CONFIDENTIAL                                     4                           AP/OCT2008/QSD136



10. Which of the following is not included in the calculation of Gross Domestic Product using
    income approach?

   A.    Rental income.
   B.    Investment.
   C.    Net interest.
   D.    Profits.


11. Each of the following is a trade barrier except

   A.    terms of trade.
   B.    quota.
   C.    tariff.
   D.    export subsidy.


12. If the price index increases to 112, it means that the value of money

   A.    increases, so people want to hold more of it.
   B.    increases, so people want to hold less of it.
   C.    decreases, so people want to hold more of it.
   D.    decreases, so people want to hold less of it.


13. In using fiscal policy to control inflation, it is better for the government to

    A.   decrease government spending.
    B.   increase government spending.
    C.   increase the interest rate.
    D.   decrease the interest rate.


14. These are reasons to trade except

    A.   economic resources are unevenly distributed.
    B.   labour is expensive in developed countries.
    C.   increase in efficiency.
    D.   higher cost of living.


15. International specialization will increase

    A.   world output.
    B.   production of goods.
    C.   standard of living.
    D.   all of the above.
                                                                                          (30 marks)



© Hak Cipta Universiti Teknologi MARA                                                 CONFIDENTIAL
CONFIDENTIAL                                    5                     AP/OCT 2008/QSD136



PARTB


QUESTION 1

Below is the demand and supply schedule for a product.

   Price (RM) per box             Quantity Demanded       Quantity Supplied
                                        (Units)                (Units)
            100                           100                    60
            200                            90                    70
            300                            80                    80
            400                           60                     90
            500                            50                    100
            600                           40                     110

a) Plot the demand and supply curves for this product on a graph paper.
                                                                                   (3 marks)

b) What is the equilibrium price and quantity for this product?
                                                                                   (2 marks)

c) What will happen if the product's price level is set at RM 200 per unit? Is there a
   shortage or surplus? How much is the amount?
                                                                             (3 marks)


d) What if the price of the product is set at RM 600 per unit? State the amount of
   shortage or surplus.
                                                                           (2 marks)




© Hak Cipta Universiti Teknologi MARA                                         CONFIDENTIAL
CONFIDENTIAL                                                          AP/OCT2008/QSD136



QUESTION 2


The following table shows national income data for a country with a population of 20 million
people.


          Item                                              RM million
          Private consumption                                   60,000
          Investment                                            70,000
          Government expenditure                                40,000
          Net property income from abroad                        2,000
          Change in inventories                                    900
          Net export                                             -1,000
          Depreciation                                            3,000
          Subsidies                                               2,000
          Taxes on expenditure                                    5,000



Based on the above data, calculate:

a) Gross Domestic Product at market price.                                        (2 marks)


b) Gross Domestic Product at factor cost.                                         (2 marks)


c) Gross National Product at factor cost.                                         (2 marks)


d) National income.                                                               (2 marks)

e) National income per capita.                                                    (2 marks)




© Hak Cipta Universiti Teknologi MARA                                       CONFIDENTIAL
CONFIDENTIAL                                      7                   AP/OCT 2008/QSD136



QUESTION 3


The following table shows the value of nominal GNP and price index for a country.


               Year                      2006               2007
            Price index                  109.5              113.8
          Nominal GNP                   172,000           196,000
             Real GNP


a) Complete the above table.
                                                                                    (3 marks)

b) Differentiate between nominal GNP and real GNP.
                                                                                    (3 marks)

c) Calculate the inflation rate between 2006 and 2007.
                                                                                    (2 marks)

d) What are the two (2) causes of inflation?
                                                                                    (2 marks)




© Hak Cipta Universiti Teknologi MARA                                      CONFIDENTIAL
CONFIDENTIAL                                 8                        AP/OCT 2008/QSD136



QUESTION 4


Answer the following questions regarding the four phases of a business cycle.

a) Define business cycle.
                                                                                (2 marks)

b) A recovery in a business cycle is followed by
                                                                                 (1 mark)

c) Malaysia experienced economic crisis in 1997 and 1998. This stage of business cycle is
   a
                                                                                 (1 mark)

d) When real GDP reaches its minimum, it is known as
                                                                                 (1 mark)

e) When real GDP reaches its maximum, it is known as
                                                                                 (1 mark)

f)   Draw a diagram and indicate the four phases of the business cycle.
                                                                                (4 marks)




© Hak Cipta Universiti Teknologi MARA                                       CONFIDENTIAL
CONFIDENTIAL                                   9                            AP/OCT 2008/QSD136



PARTC


QUESTION 1

a) Define economics.
                                                                                       (1 mark)

b) Explain the concepts of scarcity, choices and opportunity costs.
                                                                                      (9 marks)


QUESTION 2


a) Explain maximum price and minimum price with the aid of diagrams.
                                                                                      (2 marks)

b) What are the advantages of each pricing policy?
                                                                                      (8 marks)


QUESTION 3


a) Define Law of Demand.
                                                                                      (2 marks)

b) Explain four (4) determinants of demand.
                                                                                      (8 marks)


QUESTION 4


a) Define inflation.
                                                                                      (2 marks)

b) Explain any four (4) strategies that can be used to control inflation.
                                                                                      (8 marks)




© Hak Cipta Universiti Teknologi MARA                                            CONFIDENTIAL
CONFIDENTIAL                                     10                      AP/OCT 2008/QSD136



QUESTION 5


Explain five (5) differences between domestic and international trade.
                                                                                  (10 marks)




                                        END OF QUESTION PAPER




© Hak Cipta Universiti Teknologi MARA                                         CONFIDENTIAL

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:6
posted:8/20/2011
language:French
pages:10
Description: EXAM PAPER FOR ESTATE MANAGMENT