CSEC Economics Paper 2 May/June 2026 - Free CXC Past Paper with Answers

Entrepreneurial talent

Production

Land

Explain the difference between 'land productivity' and 'labour productivity'. You must provide ONE example of EACH concept.

Explain the difference between 'free goods' and 'economic goods'. You must provide ONE example of EACH concept.

Sarah is about to finish high school and will be attending college in September. She has many activities that she would like to do during the summer holiday. However, she realizes that the holiday is short and that she would not have enough time to complete all the activities she had planned. She must decide which activities to do in order to have the most enjoyable holiday. The activities which cannot be done during the summer will have to wait until the next holiday in December.

Identify the THREE economic concepts demonstrated in the scenario. For EACH economic concept, state how it is applied in the scenario. Economic concept 1 Application Economic concept 2 Application Economic concept 3 Application

Define the term 'ceteris paribus'.

Explain why ceteris paribus is an important concept in the study of economics.

State TWO characteristics that help determine the market structure for a good.

Consider a farmer who uses pesticides on his crops. The pesticides seep into a nearby river that supplies drinking water to neighbouring communities. This is a negative externality for neighbouring communities.

Discuss how market failure creates the negative externality in the scenario above.

Figure 1 is a graph of the supply curve for rice in Country Y.

Use the information from Figure 1 to calculate the price elasticity of supply for rice. Show ALL working.

State whether the price elasticity of supply for rice is elastic or inelastic, based on the response given in (e) (i).

Figure 2 and Figure 3 show the graphs for the market for tea.

Illustrate on Figure 2 what would happen to the equilibrium price when the price of tea increases. You MUST write a statement to support your illustration.

Illustrate on Figure 3 what would happen to the equilibrium when the price of sugar, a complementary good, increases.

Using the space provided below, write the number that matches EACH financial institution with the correct role given in Table 2.

Central bank Insurance company Mutual fund Credit union Building society Development bank

Teachers in Westville are currently receiving higher wages because their union, CaribU, was able to convince their employers of their economic value to the country.

Discuss the impact of an increase in teachers' wages on consumer spending and the economy.

Discuss the impact on the economy if the increase in teachers' wages is higher than the wage equilibrium.

Suggest the economic problem experienced or action taken by the country in EACH of the following scenarios.

The cost of living for households in Maxport increased by 5% within the past 12 months.

Bridgeport experienced a general decline in economic activity for several months.

Within the last year, more than half the population of Pennyville was not working and actively seeking work in local industries.

Within the last year, Sunnyville imported more goods, services and capital than it exported.

Sandyville was forced to adjust the value of its currency last year, to boost exports and correct its trade deficit.

Beachville borrowed a large amount of money from Sandtown and is finding it difficult to repay the loan.

State ONE example of EACH of the following concepts.

Informal financial institution

Indirect tax

Direct tax

E-commerce

Outline the difference between 'nominal output' and 'real output'.

Identify the type of unemployment caused by EACH of the following scenarios.

New university graduates are deemed unemployed while searching for their first job.

The apple orchards were fully reaped at the end of October and the farm owners no longer needed reapers to work until August.

Explain ONE measure that could be used to reduce cyclical unemployment.

Suggest TWO benefits that OECS countries gain by being members of EACH of the following.

Free trade area

Economic union

Calculate EACH of the following money supplies.

M0

M2