7 | CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE® EXAMINATION POA 1801216020 FILL IN ALL THE INFORMATION REQUESTED CLEARLY IN CAPITAL LETTERS. TEST CODE | 0 | 1 SUBJECT ECONOMICS ~ Paper 02 PROFICIENCY GENERAL REGISTRATION NUMBER SCHOOL/CENTRE NUMBER NAME OF SCHOOL/CENTRE CANDIDATE'S FULL NAME (FIRST, MIDDLE, LAST) DATE OF BIRTH SIGNATURE6a. rest cope 01216020 | FORM TP 2018054 MAYAUNE 2018 CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE* EXAMINATION ECONOMICS Paper 02— General Proficiency 2 hours READ THE FOLLOWING INSTRUCTIONS CAREFULLY. 1. This paper consists of SIX questions. Answer ALL questions. 2. Write your answers in the spaces provided in this booklet 3. Do NOT write in the margins. 4. You may usea silent, non-programmable calculator to answer questions, but ALL necessary working should be clearly shown. 5. Ifyou need to rewrite any answer and there is not enough space to do so on the original page, you must use the extra lined page(s) provided at the back of this, booklet. Remember to draw a line through your original answer. 6. Ifyou use the extra page(s) you MUST write the question number clearly in the box provided at the top of the extra page(s) and, where relevant, include the question part beside the answer. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO. Copyright © 2017 Caribbean Examinations Council. All rights reserved. NTE A 01216020/F 2018 sapanennan Ii * 1 (a) List THREE types of economies. (b) Define the term ‘opportunity cost’. 01216020/F 2018 na marks) GO ON TO THE NEXT PAGEr * a (©) With the aid of a diagram, explain the difference between ‘efficient points’ and ‘attainable points’, with respect to a production possibility curve, E z z (6 marks) GO ON TO THE NEXT PAGE 01216020/F 2018 I {AT. “6 7 (4) Table 1 below represents the production possibility schedules for Country A, using all resources. TABLE 1: PRODUCTION SCHEDULE FOR COUNTRY A COUNTRY A Quantity of Capital Goods | Quantity of Consumption in Thousands (‘000) Goods in Thousands (+000) 0 30 1 20 2 12 3 6 4 1 (Calculate the opportunity cost. (2 marks) GO ON TO THE NEXT PAGE 0 A I 01216020/F 20185 Gi) Analyze the shape of the production possibility curve for Country A. YANO PIATRA Eb ATE @ marks) ‘Total 15 marks : : GO ON TO THE NEXT PAGE 01216020/F 2018 I ‘OE 0 A Iy * 7 2. Most Caribbean territories have a water company which is a monopoly responsible for the distribution of water to the various households. The distribution of water is done through a network of pipes and mains that run schematically through the various districts and parishes. (a) List THREE characteristics of'a monopoly market structure, ‘@ marks) (b) State the factor of production under which EACH of the following is classified @ Water (1 mark) (i) Network of pipes mark) GO ON TO THE NEXT PAGE 01216020/F 2018 iN Ree NDI RANA Wier RAWAM Waleed Invite IneAERC TERR Be Regn cn ne Aree ranaay aa ycenana runes r * 7 (©) Describe TWO ways in which a monopoly market structure differs from a monopolistically competitive market structure. GO ON TO THE NEXT PAGE A | 01216020/F 2018: “0. 2 (@) Explain how the existence of the water company as a monopoly for the distribution of water can cause market failure. “(a marks) Total 15 marks GO ON TO THE NEXT PAGE A | 01216020/F 2018 AA MAR MTSE one WARIS Walbne ont arse Led AAA eeYAN MIR LE A IEE ECE UR NTE sy EEO arena AeSmcuneeai rinse naa ney genno vanes : 7 a (@) Define EACH of the following terms: (@ Factors of produetion (@ marks) Gi) Long-run @ marks) (b) Identify ONE type of business organization, ct) GO ON TO THE NEXT PAGE 01216020/F 2018fae -12- 4 (©) _ Explain TWO internal benefits that a firm receives from expanding production in the long- run, (marks) GO ON TO THE NEXT PAGE 01216020/F 2018 ANAT Werte IN THe aA BANAT Welre IN Tie ded AA MAd WEE Ai ure ubec “ a () Explain how division of labour can be applied to a large bakery. | i = = = (marks) e Total 15 marks 3 SEINE TERE LEELA GO ON TO THE NEXT PAGE 01216020/F 2018 | inai “14. 4. (a) __ Define the term “fiscal policy’. (b) List THREE types of unemployment “@ marks) 01216020/F 2018 I NET “@ marks) GO ON TO THE NEXT PAGE ANAT WRITE IN THC ARTA A NAP WRTPEIN HIS Abba AA NAT iareE I wus UBB eL 7 (©) Explain TWO types of inflation, i p = = rune oremenne aay renouanaers GO ON TO THE NEXT PAGE 01216020/F 2018@ -16- a] Determine the component of gross domestic product (GDP) that is affected by EACH of the following activities (Your aunt buys a house. (ii) A family buys a new car. (i mark) (iii) Farmer Joe grows tomatoes for his family. (iv) Domestically made sugar is sold to a bakery in a foreign country. (i mark) Total 15 marks GO ON TO THE NEXT PAGE 01216020/F 2018 OEE AWARD IN Te dD ES TADS eee : i iiE ” 2 5. (a)_State the meaning of EACH of the following abbreviations: @ cer (1 mark) Gi) WTO (mark) () Identify ONE non-tariff barrier to trade. (©) Define EACH of the following terms: @ Balance of trade “@ marks) (ii) Currency appreciation @ marks) GO ON TO THE NEXT PAGE. 01216020/F 2018 | ‘AMT A |(d) Discuss TWO policies that can be implemented to reduce a balance of payments deficit, r “me 1 | (8 marks) GO ON TO THE NEXT PAGE 01216020/F 2018 | AONE EA eA |LEIS ANH INE Fea REDD AT AEM Cre ae r =19- | (e) Table 2 below shows trade transactions for Cariland, @ Gi) Git) 01216020/F 2018 TABLE 2: BALANCE OF PAYMENTS. TRANSACTIONS FOR CARILAND. Category $ Million Importation of goods and services 60 Export of goods and services 70 Foreign investment in Cariland 35 Cariland’s investment abroad 4B Calculate the current account balance. @ marks) Calculate the capital account balance. (@ marks) State whether there is a balance of payments deficit or surplus. (mark) ‘Total 20 marks GO ON TO THE NEXT PAGEie -20- 6 (a) _Define EACH of the following terms: (i) Economie integration Gi) Multilateral agreement “@ marks) (b) List THREE examples of econo! 01216020/F 2018 I ANU AA marks) GO ON TO THE NEXT PAGE WANA Wb rhe IN PETG aD wA7 2 7 (©) Outline FOUR benefits of globalization to firms. / i 4 i : ' @ marks) i GO ON TO THE NEXT PAGE 01216020/F 2018 Aeeeees ANTE |rc -2- “| (@) Small size isa barrier to trade at an international level. Discuss how regional integration can overcome this problem. (5 marks) Total 20 marks END OF TEST IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST. 01216020/F 2018 NEDA Ar 2 a EXTRA SPACE, If you use this extra page, you MUST write the question number elearly in the box provided. Question No. EASON ASTOR EERO ERR CREA 01216020/F 2018fies =24- os EXTRA SPACE Ifyou use this extra page, you MUST write the question number clearly in the box provided. Question No. TAA ae i= is A eq a t i ‘ 1 01216020/F 2018 I CERIN Ia oe 7 EXTRA SPACE If you use this extra page, you MUST write the question number clearly in the box provided. Question No. i i | / 01216020/F 2018 | (OI |L 1 EXTRA SPACE, Ifyou use this extra page, you MUST write the question number clearly in the box provided. Question No. 01216020/F 2018 ‘ANNA ACANDIDATE’S RECEIPT INSTRUCTIONS TO CANDIDATE: 1. Fill in all the information requested clearly in capital letters. testcope:|0]1]}2]1]6}o}2]o SUBJECT: PROFICIENCY: GENERAL REGISTRATION NUMBER: FULL NAME: (BLOCK LETTERS) Signature: Date: 2. Ensure that this slip is detached by the Supervisor or Invigilator and given to you when you hand in this booklet. 3. Keep it in a safe place until you have received your results. en INSTRUCTION TO SUPERVISOR/INVIGILATOR: Sign the declaration below, detach this slip and hand it to the candidate as his/her receipt for this booklet collected by you. I hereby acknowledge receipt of the candidate's booklet for the examination stated above. Signature’ ‘Supervisor/Invigilator Date