CAPE Economics Unit 1 · 2017 · Paper 2

14 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 'price elasticity of supply'.
2. 1(a)(ii)2 marksDefine the term 'income elasticity of demand'.
3. 1(b)(i)5 marksExplain, with the aid of a PPF diagram, the concept 'opportunity cost'.
4. 1(b)(ii)8 marksUse the information in Table 1 to calculate the price elasticity of supply when the price changes from 9 to 10. Interpret your results.
5. 1(c)8 marksEvaluate the CEO's claim that expanding physical capacity to meet high demand will allow the firm to benefit from economies of scale.
6. 2(a)(i)2 marksOutline ONE barrier to entry.
7. 2(a)(ii)3 marksUsing the information in Table 2, calculate the Herfindahl-Hirschman Index (HHI).
8. 2(b)12 marksCompare, with the aid of diagrams, the productive efficiency and economic profit of a perfectly competitive firm and a monopolistically competitive firm in the long run.
9. 2(c)8 marksDiscuss TWO reasons why the market for health care may fail if it was not subsidised by the government.
10. 3(a)(i)2 marksDefine the term 'marginal revenue product of labour'.
11. 3(a)(ii)2 marksDefine the term 'income inequality'.
12. 3(b)5 marksProve that the labour market profit maximizing condition is MRP_L = MC_L.
13. 3(c)4 marksDraw a diagram illustrating how the wage rate is determined in a perfectly competitive market.
14. 3(d)12 marksDiscuss THREE factors that could account for this disparity in wages between males and females.