CAPE Economics Unit 1 · 2018 · Paper 2

13 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 'the law of equi-marginal utility'.
2. 1(a)(ii)2 marksDefine the term 'producer surplus'.
3. 1(b)(i)8 marksComplete Table 1 given that the price of one chocolate bar is 4 and the price of one candy bar is 2.
4. 1(b)(ii)3 marksExplain why the optimal bundle of the two goods would be 1 unit of chocolate bars and 2 units of candy bars.
5. 1(c)10 marksWith the aid of a well-labelled diagram, assess the total welfare effect of the imposition of an indirect tax on candy bars.
6. 2(a)4 marksList FOUR measures used by the government to control market failure.
7. 2(b)6 marksExplain the role of advertising in monopolistic competition and perfect competition.
8. 2(c)6 marksWith the aid of a well-labelled diagram, explain how negative externalities lead to market failure.
9. 2(d)9 marksWith the aid of a diagram, analyse the pricing and output decision of the monopolist.
10. 3(a)(i)4 marksDistinguish between 'transfer earnings' and 'economic rent'.
11. 3(a)(ii)4 marksDistinguish between 'absolute poverty' and 'relative poverty'.
12. 3(b)8 marksIdentify TWO categories of persons who are more susceptible to poverty and explain why they are more susceptible.
13. 3(c)9 marksAnalyse the effects of geographical mobility and occupational mobility on wages.