Economics: University of Cambridge International Examinations General Certificate of Education Ordinary Level
Economics: University of Cambridge International Examinations General Certificate of Education Ordinary Level
Economics: University of Cambridge International Examinations General Certificate of Education Ordinary Level
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2281/02
ECONOMICS
Paper 2 Structured Questions
May/June 2006
2 hours
Additional Materials:
Answer Booklet/Paper
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2
Section A
Answer this question.
Where would the purchase of foreign oil be recorded in Indias balance of payments? [3]
(ii)
[2]
(ii)
[6]
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3
Section B
Answer three questions.
Sometimes in an industry a firm buys a smaller competitor which uses similar factors of
production. At other times a firm buys another firm which supplies it with the raw materials and
other inputs for its production.
(a) Explain what is meant by the factors of production.
[4]
[6]
(c) Identify the types of integration in the two situations described above.
[3]
[7]
[4]
(b) Describe the factors that affect an individuals choice of occupation and show how the idea of
opportunity cost might be relevant to that choice.
[6]
(c) Analyse how a persons earnings are likely to change during their working life.
[4]
[6]
Australias unemployment rate fell to 5.5% in May 2004, the lowest for 23 years. At the same time
total employment decreased to 9.6 million. Full-time jobs decreased by 42 600 but part-time
employment rose by 1500. The shift from employment in agriculture and manufacturing to
services has continued.
(a) Calculate the change in total employment. (Show your working).
[2]
[8]
(c) The above extract says that the unemployment rate fell yet the numbers employed
decreased. Explain how these statements can both be true at the same time.
[3]
(d) Discuss the economic consequences of unemployment.
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[7]
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5
(a) Distinguish between the private sector and the public sector of an economy.
[3]
(b) Discuss the disadvantages of allocating resources through the public sector.
[7]
The Singapore government plans to build Asias first airport dedicated to serving low-cost
airlines. Its estimated cost is $26.5 million and it will be designed to handle about 2.7 million
passengers each year.
(c) When airports are planned, there are usually some people who campaign to stop them being
built. What disadvantages might the building of an airport have?
[4]
(d) A government is considering paying for a similar airport by either increasing income tax or
introducing a specific (flat-rate) tax on air passengers. Discuss which of these you would
favour.
[6]
A recent journal article stated that poor nations should be allowed to protect their new industries
from foreign competition.
(a) Explain what indicators might be used to determine that a nation is poor.
[8]
(b) Describe what methods might be used to protect industries from foreign competition in
international trade.
[5]
(c) Discuss whether it is better for a country to engage in free trade or to use some form of
protection from foreign competition.
[7]
(a) The rate of population growth in developed countries is often different from the rate of
population growth in developing countries. Explain why this might be so.
[5]
(b) Sometimes a government might try to limit the growth in the population of its country. Explain
why it might want to do this.
[4]
(c) As countries become more economically developed, there is a change in the relative
importance of the different sectors of production. Describe what this change might be.
[5]
(d) In many developed countries there will be a large increase in the proportion of older people
during the next 10 to 15 years. Discuss how governments might deal with this situation. [6]
Copyright Acknowledgements:
Question 1
Question 4
Reprinted with permission of Far Eastern Economic Review, Copyright (2004) Dow Jones & Company, Inc. All rights Reserved Worldwide.
Reprinted with permission of Far Eastern Economic Review, Copyright (2004) Dow Jones & Company, Inc. All rights Reserved Worldwide.
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
University of Cambridge International Examinations is part of the University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of
the University of Cambridge.
UCLES 2006
2281/02/M/J/06