# Essay on Supply and Demand and Mark

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PRINCIPLES OF eCONOMICS

Final Exam: Sample #1

Duration - 3 hours

No Aids Allowed Non-programmable calculators only

INSTRUCTIONS:

This examination consists of TWO PARTS

Part I 10 diagrammatic/calculation questions of which you are expected to answer any eight (10 marks each for a total of 80%). If you answer more than 8 questions, only the worst 8 marks will be counted.

Part II 10 multiple choice questions worth 2 marks each for a total of 20%. Wrong answers will not be deducted from right in grading Part II.

All questions are to be answered in the spaces provided in this question paper booklet
Do not remove any pages or add any pages. No additional paper will be supplied.
The blank backs of pages may be used for rough work. Show your work where applicable.

Print your name and student number clearly on the front of the exam and on any loose pages.

Student Name: ______________________________________________________ (Family Name) (Given Name)

Student Number: ______________________________

There are 14 pages to the exam.

PART I: Diagrammatic/Calculation Answer only 8 of the 10 questions in Part I

1. Production Possibilities Curve (10 marks)

A country with only labour and capital as resources has the following production possibilities for units of cotton and iron.
|Options |A |B |C |D |E |
|Cotton |800 |700 |500 |400 |0 |
|Iron |0 |200 |400 |500 |600 |

1 mark: I intercept = 600 and C intercept = 800

1 mark: Concave PPC1

a) Sketch the country's production possibilities curve (PPCo) in the space below the table with iron on the vertical axis. (2 marks) b) The opportunity cost of increasing cotton production from 700 to 800 units is 200 units of iron ? (1 mark)
1 mark: correct answer but give no mark if iron isn’t specified c) The opportunity cost per unit of increasing iron production from 500 to 600 units is 400/100 = 4 units of cotton ? (1 mark)