KOLEJ PROFESIONAL MARA SERI ISKANDAR

DIPLOMA BUSINESS INFORMATION TECHNOLOGY

DIPLOMA IN INTERNATIONAL BUSINESS
DIPLOMA IN MARKETING

COURSE NAME : MICROECONOMICS

COURSE CODE : ECO 1013
ACADEMIC SESSION : 2 2023 2024
TYPE OF ASSESSMENT : TEST 1
DURATION : 1 HOUR

CLO1: Apply the various concepts and theories of microeconomics.

[C2,PLO1]

INSTRUCTION TO CANDIDATES:

1. Candidates are required to answer ALL questions.

2. Candidates are advised to read each question carefully before attempting to answer.
3. All answers must be written either in BLACK or BLUE ink.
4. Any cheating or misconduct during the test will be severely penalized.

Personal Details Section /

Marks
Question No.
Name Section A+B /20

Section C /5
I/D Number
Section D /15

Class

Lecturer

Total /40

This question paper consists of 09 (nine) printed pages.

CONFIDENTIAL 2/2023/TEST1/ECO 1013
SECTION A (12 MARKS)
Multiple Choice Questions
Answer all questions. Choose the correct answer.

1. The subject of economics is primarily the study of ____________.

A. the government decision-making process

B. how to operate a business successfully
C. how to make money in the stock market
D. decision-making because of the problem of scarcity

2. Policies to lower the price level of goods in the nation are a concern of ________.

A. macroeconomics
B. microeconomics
C. political science
D. both microeconomics and macroeconomics

3. Which of the following is a positive statement?

A. I hope interest rates come down soon.

B. If taxes are raised, unemployment will drop.
C. I think we should pass a constitutional amendment to reduce the deficit.
D. President Clinton's way of dealing with the economy is better than President Bush’s.

4. Which of the following would eliminate scarcity as an economic problem?

A. Moderation of people’s competitive instincts

B. Discovery of sufficiently large new energy reserves
C. Resumption of steady productivity growth
D. None of the above

CONFIDENTIAL 2/2023/TEST1/ECO 1013

 5. Which fundamental economic question is most closely related to the issues of income
distribution and poverty?

A. The “What to Produce” question

B. The “Why to Produce” question
C. The “How to Produce” question
D. The “For Whom to Produce” question.

The diagram 1 below is for question 6 and 7

Consumption Production Possibilities Curve for Capital goods and Consump-

Good(units) tion goods in factory A
12
A
10 B

8 C

6
D
4

2 Capital
E good(units)
0
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Diagram 1

6. If the economy produces no capital goods, what is the maximum number of consumption
goods that can be produced?

A. 10 units
B. 8 units
C. 4 units
D. 0 units

7. What shape does the diagram represent for the production possibilities curve?

A. Convex
B. Concave
C. Straight line
D. Downward sloping

CONFIDENTIAL 2/2023/TEST1/ECO 1013

 According to Al –Quran in surah Al-Hujurat “surely the believers are none but brothers into
one another so set things right between your brothers and have fear of Allah that you may
right between your brothers and fear of Allah that you may be shown mercy “(Q49:10)

8. Which of these following concepts in the Islamic economic system is related to the surah
above?

A. Tauhid
B. Tazkiyyah
C. Khalifah
D. Ukhuwah

9. In economics, resources are ____________________________________________.

A. physical items that are free and unlimited in supply

B. human desires and aspirations for material possessions
C. financial assets held by individuals and businesses
D. inputs used to produce goods and services to satisfy human wants

10. "The government should increase the minimum wage to ensure a decent standard of living
for all workers." This statement is an example of _____________________.

A. scarcity
B. opportunity cost
C. normative economics
D. positive economics

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The following picture is for question 11.

Picture 1

11. What is the primary factor that determines resource allocation and production decisions in
the United States of America?

A. Government central planning

B. Traditional customs and rituals
C. Social equality and communal ownership
D. Consumer preferences and market demand

The following picture is for question 12.

Picture 2

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 12. The economy systems in the United States of America and the United Kingdom are different
in terms of _____________________________________________________.

A. their shared emphasis on centralized planning and government control

B. their identical approaches to wealth redistribution and income equality
C. their mutual preference for communal ownership and collective decision-making
D. the extent of government intervention and regulation within their respective market
economies

[TOTAL: 12 MARKS]

SECTION B ( 8 MARKS)
True or False Questions
Answer all questions. Choose the correct answer.

1. Microeconomics only looks at the behavior of one consumer or one firm in a market, while
macroeconomics looks at the behavior of an entire industry or group of consumers.

A. True
B. False

2. In a socialist economic system, the government controls most of the major industries and
resources.

A. True
B. False

3. The issue of resource misallocation is largely solved by the capitalist economic system.

A. True
B. False

4. If some resources went to waste rather than using them in production, the economy tends
to operate outside its production possibility curve.

A. True
B. False

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 5. Due to poor technological advancements and the current economic downturn, the Production
Possibility Curve will shift inward.

A. True
B. False

6. The price mechanism is an important indicator in the Socialist economic system.

A. True
B. False

7. In the Islamic economic system, the concept of " Zakat" requires Muslims to give a portion of
their wealth to the less fortunate in society, emphasizing charity and wealth redistribution.

A. True
B. False

8. In a Socialist economic system, the government plays a central role in planning and directing
economic activities to achieve social and collective welfare.

A. True
B. False

[TOTAL: 8 MARKS]

SECTION C (5 MARKS)
Fill in the blank
Answer all questions. Write the correct answer.

1. To address the issue of scarcity, individuals and society must make a

_______________(choice, opportunity cost).

2. "How to produce" in economics pertains to the decision-making choosing the appropriate

production techniques to ___________(minimize, maximize) production costs

3. In microeconomics, the analysis often involves studying supply and demand in ___________
(specific, overall) markets.

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 4. Points along the Production possibility curve represent the _____________ (efficient,
inefficient) production.

5. “What to produce” refers to the types of goods and services to be produced based on
_________ (demand, supply) of society.
[TOTAL: 5 MARKS]

SECTION D (15 MARKS)

Short-essay Questions
Answer all questions.

1. [3 marks]
State three (3) assumptions to draw a production possibilities curve.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

2. Differentiate between labor and entrepreneur. [6 marks]

____________________________________________________________________________
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3. Explain how socialist economic system solves the three basic economic decisions. [6 marks]

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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[TOTAL: 15 MARKS]
“END OF QUESTIONS”

CONFIDENTIAL 2/2023/TEST1/ECO 1013