CAPE Economics Unit 1 · 2021 · Paper 2

19 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)4 marksDefine the term 'production possibility frontier' and state how it illustrates the concept of scarcity.
2. 1(b)(i)5 marksCalculate the price elasticity of demand when the rental fee increases from 1250 to 1400.
3. 1(b)(ii)4 marksBased on the calculated price elasticity of demand, suggest with reasons whether the owners of APB Motors should increase or decrease their rental fees.
4. 1(c)12 marksWith the aid of a fully labelled diagram, analyse the impact of a price floor of $700 on this market. Include a definition of the term 'price floor'.
5. 2(a)(i)2 marksDefine the term 'economic loss'.
6. 2(a)(ii)2 marksDefine the term 'abnormal profit'.
7. 2(b)(i)4 marksDistinguish between 'private benefits' and 'external benefits'.
8. 2(b)(ii)5 marksExplain what is meant by the term 'merit good' and state an example of a merit good.
9. 2(c)(i)4 marksDiscuss how Caribbean governments could use legislation to control the externalities arising from overfishing.
10. 2(c)(ii)4 marksDiscuss how Caribbean governments could use taxation to control the externalities arising from overfishing.
11. 2(c)(iii)4 marksDiscuss how Caribbean governments could use quotas to control the externalities arising from overfishing.
12. 3(a)(i)2 marksDefine the term 'marginal physical product'.
13. 3(a)(ii)2 marksDefine the term 'marginal revenue product'.
14. 3(b)(i)3 marksExplain how minimum wages can impact the pricing of labour (or wages).
15. 3(b)(ii)3 marksExplain how industrial action can impact the pricing of labour (or wages).
16. 3(b)(iii)3 marksExplain how collective bargaining can impact the pricing of labour (or wages).
17. 3(c)(i)4 marksDiscuss how unemployed human resources could affect the economic costs of poverty.
18. 3(c)(ii)4 marksDiscuss how inefficiency of government spending could affect the economic costs of poverty.
19. 3(c)(iii)4 marksDiscuss how environmental degradation could affect the economic costs of poverty.