Past Paper Questions Flashcards
Discuss TWO challenges resulting from the economic problem of scarcity and choice. (5)
A movement along the demand curve can be caused by a change in population. Is this
statement true or false? Explain by illustrating your answer with a diagram. (10)
Use a demand and supply curve diagram to explain what happens when:
i. there is an increase in personal income tax; (5)
ii. there is an industrial technological innovation; (5)
To prevent financial problems at University, a taxpayer suggests increasing examination
fees. What would be expected in terms of the price elasticity of demand for total receipts
to increase? (5)
The demand for good X is price elastic. The price falls. What happens to the total revenue? (8)
Why are agricultural commodity prices more volatile than manufactured goods? How can
they be stabilized? (12)
The consumer aims to distribute their income on various commodities to achieve marginal
utility. Explain.
What is:
i. the difference between the short run and the long run? (4)
ii. the law of diminishing marginal product? (4)
Give reasons why the Long Run Average Cost Curve might at first fall and later rise. (9)
Outline THREE characteristics of a perfectly competitive market and THREE
characteristics of a monopoly. (6)
Discuss how a perfectly competitive firm and a monopoly maximize profits in the long
run. (10)
What are the benefits for the consumer from perfect competition when compared to
monopoly? (9)
Discuss TWO features exhibited by oligopoly. (8)
What do you understand by monopolistic competition? (10)
What is product differentiation? Mention THREE types and provide an example for each. (7)
What happens in the labour market when firms have the power to set wages unilaterally? (5)
How are wages determined in a free market economy? (10)
“Various government policies often affect the demand for labour, supply of labour, and
the equilibrium in the labour market. One such thing is the imposition of a minimum
wage”. Discuss. (10)
Describe the different methods which can be applied to measure aggregate GDP. What
must occur for the value of GNP to be less than that of GDP? (7)
The Covid-19 pandemic has created a simultaneous decline in household consumption
expenditure and in imports of goods and services. Based on your knowledge of the
circular flow of income for an open economy, how would the TWO factors affect the level
of gross national income? (9)
Explain in detail TWO benefits and TWO costs linked with the process of long run
economic growth. (9)
Explain, by making use of the appropriate diagram, what the slope of the Keynesian
consumption function represents and what is its relation with the income multiplier. (9)
Discuss THREE determinants of aggregate investment behaviour within the economy. (7)
Explain, by applying the Keynesian income multiplier model, how an increase in
aggregate investment would affect the equilibrium level of national income. Give ONE
example of a key determinant of aggregate investment in the economy. (9)
Describe the main functions of money (7)