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Madhrasathul Ahmadhiyya, Male
FIRST TERM TEST 2002
Grade 10 ECONOMICS
Paper 2
Duration: 2 hours
Information and instructions: Write your name, index number,
class and register number on ALL answer sheets.
Answer ANY FOUR questions including question number one.
Question number one is COMPULSORY.
Read the instructions carefully.
Write your answers on separate answer sheet[s] provided.
Use black or blue ballpoint pen to answer.
1. Study the graph below, which is based on statistics from H. M
Treasury and answer the questions, which follow
i) Explain the difference between a service industry and a
manufacturing industry,giving examples to illustrate your answer.
[4
ii) Describe what happened to the share of services in total
output since 1950. [2iii) The change in manufacturing share of
output shown in the graph does not necessarily
mean that less manufactured goods are being produced. Explain
why this is so. [2iv) What would be the possible effects on an
economy of a growth in the tertiary sector and
a decline in the primary and secondary sectors? [1
Madhrasathul Ahmadhiyya First Term Test 2002 Economics Grade 10
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2. Here are two statements from a UK newspaper published in July
1999.
UK small firms were deliberately restricting their growth in
order to avoid becomingcaught by too many regulations
Vodafone, the global mobile phone leader, has agreed to
payUS$1.36billion forCommNet Cellular a US based company with 300
000 customers in nine western states.i) Identify three measures
that might be used to classify a firm as large or small. [3ii)
Discuss why some firms remain small. [7
iii) What advantages do other firms gain by growing in size?
[10
3. Azerbaijan was one the worlds first great oil suppliers,
producing 51 % of the worlds oil at the beginningof the 20th
century. In recent years, oil production has been falling, and many
of its oil fields havebecome exhausted. The most important task,
therefore, is to develop other sectors so the economybecomes more
diversified.
(a) Would oil supply be in the primary, secondary or tertiary
service sector? [1(b) Give one other example of an industry in the
same sector as oil production. [1
(c) Draw a demand and supply diagram to show what has happened
to oil supply in Azerbaijan inrecent years. [4(d) What may happen
in the market for a substitute product if the supply of a necessity
such as oil
becomes exhausted? [4(e) Explain with examples what is meant by
specialization and diversification.[4]
(f) How far is it advantages for a country to specialize in the
production of one commodity [6
4. (a)Contrast a market economy with a command economy. [6(b)How
does a mixed economy try to obtain the advantages of both a market
and a command economy? [8
Does a mixed economy have any advantages? Explain your answer.
[6]
5. In a European country, despite protests, the government has
decided to allow a proposal to build amajor road through an area of
outstanding natural beauty. Developers say the proposal will
createmany badly needed new jobs and bring vital industry to the
area.
(a) Which groups of people would be likely to gain from such a
decision? [3(b) Why is government usually involved in decisions
about major road developments? [7(c) Use the above statement to
explain the concept of social cost. [3
(d) Do you support the continued building of road network if
they create social costs?Give reasons for your answer. [7
6. Some governments impose tariffs and quotas on imports.(a)
Distinguish between tariffs and quotas. [3(b) What effect might a
tariff on imports have in the country that imposes the tariff?
[7(c) Discuss what might happen if free trade between countries
were established and tariffs and
quotas were abolished. [10
7. (a) Explain labour costs are a fixed or a variable cost.
[4(b) The average hourly wage rate in Portugal is less than in
Germany but the goods
produced are not necessarily cheaper. What might explain this?
[6Discuss the various factors affecting the wage rate. [10]
Madhrasathul Ahmadhiyya First Term Test 2002 Economics Grade 10
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