Economic Systems and Mixed Economic System Q1

Q.
a)
Define economic systems. What do you mean by saying that the Malaysian economy is a mixed economy. (10 marks)

b)
 i) Explain the meaning of demand. Why is the market demand curve sloping downward. (5 marks)

ii) Explain diagrammatically how prices are determined by the free forces of demand and supply. (5 marks)

(20 marks, 2012 Q1)

Elastic or Inelastic demand Q2

Q.
a) Decide whether the following goods have elastic or inelastic demand. Give reasons.

i) Petroleum
ii) Clothes
iii) Jewellery
iv) Low-cost house
v) Toothpaste

(5 marks)

b) State the special characteristics of land as one of the factors of production. (5 marks)

c) Illustrate Ricardo's theory of rent and the assumptions. (10 marks)

(20 marks, 2012 Q2)

Stages of Production Q3

Q.
a) In the short-run, all production process will be subjected to the law of diminishing marginal returns. Using graph and table, illustrate this law.

What are the stages of production. Which stage of production should a rational producer choose? (15 marks)

b) Differentiate between Fix Cost and Variable Cost. (5 marks)

(20 marks, 2012 Q3)

Types of market structures Q4

Q.
a) Discuss the characteristics of the following market structure. Support your answer with examples.

i) Perfect competition (5 marks)
ii) Monopolistic competition (5 marks)

b) Monopoly is defined as a market structure where there is only one firm in the industry. For a firm to maintain its monopoly position, there must be barriers to the entry of new firms.

Discuss.

i) The various forms of barriers to entry in monopoly.
ii) The equilibrium position with diagram. (10 marks)

(20 marks, 2012 Q4)

Why National Income not = GNP Q5

Q.
a) What do you understand by the term National Income?
Why is it not equal to Gross National Product (GNP). (5 marks)

b) Explain any one (1) approach of calculating national income and discuss the factors that determine the national income. (15 marks)

(20 marks, 2012 Q5)

Inflation vs Deflation Q6

Q.
a) Differentiate the meaning of inflation and deflation. (5 marks)

b) There are always gainers and losers from inflation and deflation. Discuss. Which is more damaging to the economy as a whole and why. (15 marks)

(20 marks, 2012 Q6)

Types of Money Q7

Q.
a) Elaborate four (4) functions of money in an economy. (4 marks)

b) Elaborate the different types of money. (4 marks)

c) Differentiate between M1 and M2 supply of money. (4 marks)

d) Discuss the causes of money supply to rise in an economy. (8 marks)

(20 marks, 2012 Q7)

Government tariff and quota Q8

Q.
Differentiate the following. Support your answer with examples.

i) Government Operating Expenditure and Government Development Expenditure. (10 marks)

ii) Tariffs and Quota as a tool of protectionism. (10 marks)

(20 marks, 2012 Q8)