Student Name
Subject: Economics
Syllabus Code: 9708
Lower Six
Exeat Work
Instructions
Answer all questions from Section A and Section B
D.Mashiri
SECTION A
1. A good is most suitable to be provided by the market if it is
A excludable and non-rival.
B excludable and rival.
C non-excludable and non-rival.
D non-excludable and rival.
2. What is a defining characteristic of a private good?
A It is purchased by individual customers.
B It is supplied exclusively through the market.
C It is produced only by private sector firms.
D When consumed by one individual, it is not available to others.
3. Why does the production of public goods have to be financed by the government?
A One person’s consumption of a public good means it is not available for anyone
else.
B People are able to consume public goods without paying for them.
C Private sector firms will charge a price significantly above cost for public goods.
D The cost of producing public goods is higher in the private sector.
4. Despite much opposition, the local government in a popular tourist resort built a
leisure centre and swimming pool which is open to everyone. Many tourists visit the
centre. Local residents are charged a reduced entry fee. How would economists
classify this service?
A It is a demerit good because some people objected to the development.
B It is a merit good because the entry fee is reduced for local residents.
C It is a private good because there is an entry fee for all users.
D It is a public good because it is open to everyone and provided by the local
government.
5. What can be provided only as a public good?
A road use
B security services
C street lighting
D TV broadcasting
6. Which good is excludable but non rival?
A air defence
B public libraries
C street lighting
D television broadcasts
7. What is a distinguishing feature of a public good that is not found with private goods?
A Consumption depends on the ability to pay.
B It creates negative externalities.
C Its consumption by one consumer can have an effect on other consumers.
D Its consumption by one consumer does not restrict consumption by other
consumers.
D.Mashiri
8. A US study, published in July 2014, warned teenagers to reduce the amount of
fizzy drink they consume. One can of fizzy drink contains an adult’s entire daily
sugar allowance. If the advice were accepted, how might the effect be illustrated on
demand and supply diagrams for fizzy drinks and for sugar?
9. The diagram shows the market for a luxury brand of smartphones. The initial
equilibrium is at point X. What will be the new equilibrium following a rise in the
price of batteries used by the manufacturer of smartphones and a rise in consumer
incomes?
10.What would not affect the position of the demand curve for wigs?
A an increase in incomes
B a reduction in the price of hairdressing
C an increase in wigs worn by television celebrities
D a reduction in the price of wigs
D.Mashiri
SECTION B
1 (a) Explain, with examples, the difference between a merit good and a public good [8]
(b) Assess whether the supply of agricultural products is likely to be more price elastic or
less price elastic than the supply of manufactured products. [12]
D.Mashiri
