1. Define an economic system and outline four types of economic systems.

2. TRUE OR FALSE: Countries that realize specialization have a comparative advantage in the production of a good or service.

3. Stating that the government should strive for economic growth of 22% or inflation of 8 % is an example of _________.

4. Elasticity can be defined as the rate of change in the quantity demanded with respect to the rate of change in price. Outline the  four main methods used in measuring the price elasticity of demand.

5. The law of diminishing marginal utility says that _______.

6. Highlight three assumptions underlying the law of demand.

7. Rightward shift in supply is caused by (a)_________in supply, whereas leftward shift in supply is caused by (b)_________in supply.

8. Which of the following statements about elastic and inelastic supply is true?

9. Kipevu supplies diesel to several petrol stations in Malindl. The table below shows the supply and demand of diesel:

Required
The equilibrium price and quantity of the commodity using the graphical method.

10. TRUE OR FALSE: Demand for the giffen increases even when their prices rise, regardless of a consumer's income.

11. _________ considers the aggregation of forces occurring at the macro-economic level, and not the micro forces of individual markets.

12. Ordinal utility states that________

13. TRUE OR FALSE: In economics, products are often substituting if the demand for one product decreases when the price of the other goes up.

14. In economics, backward-bending labor supply carve is used to demonstrate______

15. The theory of the firm is a microeconomic concept that states that _________

16. Explain two reasons why the marginal cost curve always intersects the average cost curve at the lowest point.

17. TRUE OR FALSE: The mapping of the isoquant curve addresses cost-minimization problems for producer (i.e. The best way to manufacture goods), whereas the indifference curve measures the optimal ways consumers use goods.

18. In economics, different industries are classified and differentiated based on their degree and nature of competition for goods and service. In_______, there is a large number of small companies competing against each other, who sell similar products (homogeneous), lack price influence over the commodities, and are free to enter or exit the market

19. TRUE OR FALSE: In an oligopoly market, if one firm increased prices, all the others will follow suit to maintain their position in the market.

20. The Profit Maximization Rule states that __________

21. The (a)________refers to the value of all goods and services made by a country's residents and businesses, regardless of production location, whereas (b). _________measures the value of goods and services produced within a country's borders, by citizens and non-citizens alike.

22. Highlight three advantages of a controlled market system.

23. Highlight the three main approaches used in measuring national income.

24. TRUE OR FALSE: Gross national product at market price = Gross domestic product at market price + Net factor income from abroad.

25. List six factors that could lead to high cost of living globally.

26. Which of the following statements about the informal sectors are not true?

27. Explain how monetary policy could be used to control inflationary gap in an economy.

28. Which of the following policies can reduce an inflationary gap?

29. TRUE OR FALSE: For an inflationary gap to be considered inflationary, the current GDP must be higher than the potential GDP.