CAPE Economics Unit 1 · 2016 · Paper 2

34 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 the term 'normal good'.
2. 1(a)(ii)2 marksDefine the term 'inferior good'.
3. 1(a)(iii)2 marksDefine the term 'Giffen good'.
4. 1(b)(i)3 marksExplain the ordinalist approach to understanding consumer behaviour.
5. 1(b)(ii)3 marksExplain the cardinalist (marginalist) approach to understanding consumer behaviour.
6. 1(c)13 marksDiscuss, with the aid of diagrams, the ordinal approach to the derivation of the demand curve.
7. 2(a)(i)2 marksDefine the term 'total product'.
8. 2(a)(ii)2 marksDefine the term 'average product'.
9. 2(a)(iii)2 marksDefine the term 'marginal product'.
10. 2(b)(i)3 marksExplain the law of diminishing returns in the context of the manufacture of electric fans.
11. 2(b)(ii)3 marksExplain the concept of the short-run in the context of the manufacture of electric fans.
12. 2(c)13 marksAssess, with the aid of a diagram showing the three stages of production, the ideal production stage for electric fans.
13. 3(a)3 marksIdentify THREE goals of a firm.
14. 3(b)(i)3 marksExplain the four firm concentration ratio as a measure of industrial concentration.
15. 3(b)(ii)3 marksExplain the Herfindahl-Hirschman Index as a measure of industrial concentration.
16. 3(c)(i)4 marksOutline TWO key features of the oligopolistic market structure.
17. 3(c)(ii)4 marksAssess how any ONE of the two features mentioned in (c)(i) can influence the mobile phone industry.
18. 3(d)8 marksDiscuss, with the aid of the kinked demand curve (label elastic and inelastic portions), the pricing and output decision of the oligopolistic firm.
19. 4(a)3 marksIdentify THREE characteristics of the perfectly competitive market structure.
20. 4(b)6 marksSuggest TWO reasons why the perfectly competitive market structure is considered the most efficient market structure.
21. 4(c)8 marksCompare, with the aid of a diagram, the pricing and output decision of the perfectly competitive firm and the monopolist.
22. 4(d)(i)3 marksExplain how market failure is caused by a monopolist.
23. 4(d)(ii)5 marksAssess governments' response to market failure caused by monopolies.
24. 5(a)(i)5 marksDraw a labour market diagram, and show on your diagram how a surge of migrants into the country will affect the equilibrium wage and level of employment.
25. 5(a)(ii)5 marksDraw a labour market diagram, and show on your diagram how an increase in world demand for tourism will affect the equilibrium wage and level of employment.
26. 5(b)(i)6 marksCopy and complete the table to show the marginal product and the value of the marginal product.
27. 5(b)(ii)3 marksSketch the firm's labour demand curve.
28. 5(c)(i)3 marksDetermine the number of workers who will be hired if the government sets a minimum wage of $1000 per day.
29. 5(c)(ii)3 marksJustify the manager's employment of FIVE workers per day in the manufacture of belts.
30. 6(a)(i)2 marksDefine the term 'income inequality'.
31. 6(a)(ii)2 marksDefine the term 'poverty'.
32. 6(b)(i)6 marksOutline THREE factors that could contribute to poverty.
33. 6(b)(ii)3 marksCritique the human development index (HDI) as a measure of poverty.
34. 6(c)12 marksJustify, with the aid of diagrams, why a legal minimum wage will alleviate poverty in a monopsonic labour market but not in a perfectly competitive labour market.