CSEC Economics Paper 2 May/June 2024 - Free CXC Past Paper with Answers

State TWO main branches of economics.

Complete the table below by listing the characteristic of the goods sold by EACH market structure.

With the use of an example, explain how EACH of the following affects the shape of the production possibility frontier.

Increasing opportunity costs

Constant opportunity costs

A perfectly competitive firm sold 50 pens at a price of $10 EACH. It cost the firm $6 to make each pen.

Calculate the firm's profit or loss. Show all working.

Recently, the firm learned that the cost of ink will drastically decrease next week. This would result in a decrease in the cost of production. Using a demand-supply diagram, show the effect of the decrease in the cost of production.

Study Table 1 below which shows a list of terms and definitions and answer the question that follows.

TABLE 1: ECONOMIC TERMS AND DEFINITIONS

Match EACH term with its definition by writing the correct number next to EACH of the letters given below. (i) A (ii) B (iii) C (iv) D (v) E (vi) F

With the use of an example, explain 'price elasticity of demand' in EACH of the following situations.

It is greater than 1.

It is equal to infinity.

Identify the type of elasticity indicated by the following scenarios.

Jan experienced a 20% increase in income, so her quantity demanded for juice increased by 20%.

Joe's demand for jam increased when the price of jam decreased at his local supermarket.

Jim started to sell more plums when the price increased by $20 last week.

Identify the value of demand elasticity given in the following scenarios.

Rob purchased 10% more coffee when the price fell by 10%.

Ron's purchase of painkillers fell by less than 20% when the price increased by 20%.

Roy continues to purchase the same number of life-saving drugs he needs even though the price keeps increasing.

Read EACH of the following and insert the correct economic concept from the list provided above. (i) All transactions of a country with the rest of the world (ii) A system used by the central bank to set up and manage the country's currency in relation to other currencies (iii) A country's insurance against unfavourable changes in the economy (iv) A limit placed on the import and export of a specific product for a given time period (v) A common set of charges imposed by a group of countries on imports from non-member countries (vi) The difference between the value of exports and the value of imports of a country for a given time period

Explain how EACH of the following remedies can reduce balance of payments deficits in a country.

(i) Currency devaluation (2 marks)

(ii) Trade barriers (2 marks)

(iii) Import substitution (2 marks)

(iv) Export promotion (2 marks)

Currency devaluation

Trade barriers

Import substitution

Export promotion

Study Table 2 which shows the balance of payments activities for Country A and answer the questions that follow.

TABLE 2: BALANCE OF PAYMENTS FOR COUNTRY A

(i) Calculate the value for the capital account. (2 marks)

(ii) Calculate the value for the current account. (2 marks)

(iii) Determine whether there is a balance of payments deficit or surplus. (2 marks)

Calculate the value for the capital account.

Calculate the value for the current account.

Determine whether there is a balance of payments deficit or surplus.

Define EACH of the following terms.

Fiscal policy

Recession

Developed economy

Explain how EACH of the following factors may cause a recession.

A rise in the exchange rate

An increase in debt

High interest rates

A reduction in real wages

Pennyville's labour market often experiences different types of unemployment. Identify the type of unemployment described by EACH of the following scenarios.

Kim lost her job as a cashier because the company implemented self-checkout for customers.

Patrick was laid off as a tourism worker due to the economic recession caused by the COVID-19 pandemic.

Martin quits his job as a nurse and is looking for a new position.

Ravi is not working since his job of picking oranges was finished when the summer ended.

Nina is not working since she is unwilling to accept less than $1000 from a restaurant that wants to pay her $900 to be a chef.

Kai just graduated and is looking for a job to match his new qualifications.