4

Answer ALL questions.

(a) List the THREE main agents in an economy.

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(3 marks)

(ii) State the role of EACH

of the agents listed in (a) ().

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3 marks)

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01216020/MJ/CSEC 2022
(b)
Explain how searcity creates the 'economic problem'.
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(4 marks)

(ii) Differentiate between 'opportunity cost and 'money cost'.

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' * * * * * * * * * * * .

(4 marks)

GO ON TO THE NEXT PAGE

EC 20222
 6

frontier, explain the concent

(c) USing a labelled diagram ofthe production possibility
frontier.
f
along the
OPportunity cost as production moves

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******.

(6 marks)

Total 20 marks

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01216020/MJ/CSEC 2022
 - 7-
2. (a) Define EACH of the
following economic terms.
() Market

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(2 marks)
(ii) Supply schedule

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(2 marks)
(b) State TWO factors that could
cause an increase in the supply of pens.

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(2 marks)
 (e)
udy Table I below which reprGents the esnand and supply
vhule
1rr pern aned a t i z
Ihe questions that folow

FOR PENS
TABILE 1: DEMAND AND SUPPLY SCHEDULE

Price of Pens (S) uantity Demanded yuantity Supplies

50

2 30 10

30

4 50

(i) Calculate the price elasticity of supply if the price of pens moves from $2 t 4
Show ALL working

(4 marks)

GO ON TO THE NEXT PAGE

01216020/MJ/CSEC 2022

L U12 1 6 0 20 0 8
 9

(ii) Sing a labelled diagram, illustrate the relationship between the price of pens and
the quantity supplied of pens.

(4 marks)

GO ON TO THE NEXTP\Gr
 10

(d) Sng the information in Table 1, discuss EACH of the following.

occurs in the market
i) ne price at which the greatest shortage of pens

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3 marks)
(i) he price at which the greatest surplus of pens occurs in the market

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(3 marks)

Total 20 marks

1/CC 202
 - 11 -

3. (a) (i) State THREE examples of barriers to entry that occur in market siructures.

(3 marks)

(ii) ldentify the time period in which firms can enter or leave an industry.

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(1 mark)
(iii) ldentify TWO market structures characterized by barriers to entry.

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(2 marks)
 - 12-

(b) In a big city, there

are many small fried chicken
restaurants. Though they are all selling
fried
chicken, each restaurant is known for its own unique
competitive and there is freedom of entry and exit". recipe. The restaurants are very

Draw a labelled diagram to illustrate the long-run equilibrium of a firm in this industry.

(8 marks)
 - 13 -

DIscuss TWO ways in which barriers to entry could determine an existing firm's long-run
(c)
equilibrium position.

* *

***

(6 marks)

Total 20 marks
 - 14 -

4. (a) Define EACH of the following economic concepts.

(i) Capital consumption

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(2 marks)
(ii) Investment expenditure

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(2 marks)
ii) Disposable income

(2 marks)
 - 15 -

(b) Study lable 2 which shows information on the gross domestic product (GDP) ol a couny
and answer the
questions that follows.
ABLE 2: GROSS DOMESTIC
PRODUCT-INcOME AND EXPENDITURE
Components
Interest income 150.00

| Depreciation 35.00|
Wages 65.00
Gross private investement 120.00
|Business profits 200.00
Indirect business taxes 75.00
Rental income 75.00|
|Net exports 50.00 |
Net foreign factor income 20.00
Government purchases 150.00
| Household consumption 300.00
USing the information in Table 2, calculate the gross domestic product (GDP) for the
country using EACH of the following methods.

(i) Income method

(4 marks)
GOON TO THE NEXT PAG
 - 16 -

(ii) Output method

(4 marks)
 - 17 -

(c)
y bie s which shows macroeconomic and other indicators of growth and development
Tor A and the that follow.
questions
Country Country B. and answer

INDICATORS FOR
TABLE 3: MACROECONOMIC AND OTHER
COUNTRY A AND COUNTRY B

Country A Country B
3% 5%
Annual pereentage change in GDP
$20 000 000| $45 000 000 |
GDP $180 000
GDP per capita $300000
84% 72%
| Literacy rate
75years 54 yearss
Average life expectancy

has the higher economie growth and give a

reason to justify
i) Identify which country
your response.

Country.

Reason..
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(3 marks)

Identify which country has the higher economic growth and give a reason to justify
(ii)
your response.

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* * * * * * *

(3 marks)

Total 20 marks
 - 18 -

5. (a) Define EACH of the following economic concepts and give ONE example of EACH.

(i) Protectionism

(3 marks)
(ii) Structural adjustment

(3 marks)
 19

(b) Explain TWO

advantages of economic integration to a
country.

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*********

*********.

(8 marks
 20

small developing countries fac

problems that
(c) CovID-19
eto limited pandemic highlighted
and communication. hese problems inel.ue
resour
urces relating to technology and limited knowiedge regarding the ouse of
some areas
access to the internet in
ed
the technology.
(FD) can be used to solve t
direct investment
DISCuss TWO ways in which foreign
problems.

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(6 marks)

Total 20 marks

END OF TEST

IF YOU FINISH BEFORE TIME IS

CALLED, CHECK YOUR
WORK ON THIS TEST.