CAPE Economics Unit 1 · 2013 · Paper 2

36 questions and parts from this paper. Open one to see it in full, then practise it on Quelpr and get it marked against the mark scheme.

1. 1(a)(i)2 marksDefine demand.
2. 1(a)(ii)2 marksDefine supply.
3. 1(a)(iii)2 marksDefine equilibrium.
4. 1(b)2 marksCopy and complete the table to show the market demand for ice cream.
5. 1(c)6 marksCarefully draw and label a graph showing: (i) equilibrium (ii) equilibrium price (iii) equilibrium quantity.
6. 1(d)(i)7 marksReferring to your graph in (c), explain how the increase in taxes will affect the market supply for ice cream.
7. 1(d)(ii)4 marksState whether the government's objectives of reducing obesity and raising revenue have been achieved, justifying your answer.
8. 2(a)(i)2 marksDefine marginal cost.
9. 2(a)(ii)2 marksDefine average variable cost.
10. 2(b)(i)4 marksIdentify ONE factor that causes a movement along the supply curve and explain how the change is caused.
11. 2(b)(ii)8 marksIdentify TWO factors that cause the supply curve to shift to the left or right, and explain how the change is caused.
12. 2(c)9 marksUsing a correctly labelled graph, explain the relationship between the marginal cost curve and the supply curve in a competitive market.
13. 3(a)8 marksOutline FOUR major characteristics of perfect competition.
14. 3(b)8 marksCompare the characteristics outlined in (a) with those of monopolistic competition.
15. 3(c)(i)3 marksCompare monopolistic competition and perfect competition in terms of the way they compete with other businesses.
16. 3(c)(ii)3 marksCompare monopolistic competition and perfect competition in terms of their profit in the short run and long run.
17. 3(c)(iii)3 marksCompare monopolistic competition and perfect competition in terms of the efficiency with which they use resources.
18. 4(a)(i)4 marksExplain the term economic efficiency.
19. 4(a)(ii)4 marksExplain the term market failure.
20. 4(b)(i)4 marksExplain how monopolies could lead to market failure.
21. 4(b)(ii)6 marksExplain how public goods could lead to market failure.
22. 4(b)(iii)4 marksExplain how negative externalities could lead to market failure.
23. 4(c)3 marksEvaluate ONE measure used by the government to deal with market failure caused by public goods.
24. 5(a)3 marksOutline the marginal productivity theory of factor demand.
25. 5(b)(i)a)3 marksCalculate the marginal product for EACH additional worker.
26. 5(b)(i)b)3 marksCalculate the marginal revenue product for EACH additional worker.
27. 5(b)(ii)1 markDetermine the quantity of labour that will be employed per day.
28. 5(b)(iii)5 marksExplain why more (or less) labour is NOT employed.
29. 5(c)6 marksEvaluate the effects of a government minimum wage on the labour market.
30. 5(d)4 marksDraw a demand and supply diagram of the labour market showing the decomposition of earnings into transfer earnings and economic rent.
31. 6(a)3 marksDifferentiate between 'functional distribution of income' and 'size distribution of income'.
32. 6(b)3 marksExplain what is meant by the term 'income inequality'.
33. 6(c)(i)5 marksOutline how the basic needs approach is used to measure poverty.
34. 6(c)(ii)5 marksOutline how the poverty line approach is used to measure poverty.
35. 6(d)(i)6 marksDraw a diagram of the Lorenz curve and use it to explain how income inequality is measured.
36. 6(d)(ii)3 marksExplain how the Gini coefficient is calculated from the Lorenz curve.