CSEC Economics June 2014 P32
CSEC Economics June 2014 P32
CSEC Economics June 2014 P32
ECONOMICS
1 hour 30 minutes
2. Use this answer booklet to respond to the questions. For EACH question, write
your answer in the space provided.
3. If you need additional paper to write your answers, request it from the supervisor.
4. Attach any additional paper that you use securely to this answer booklet.
6. You may use a silent, electronic calculator to answer questions but ALL necessary
working should be clearly shown.
01216032/F 2014
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Figures 1(a) and 1(b) below represent TWO firms operating under TWO different market structures.
Examine the figures carefully and answer the following questions.
P($) P($)
MC MC
P1
E1
Price
Price
P1 D0 P2
P3
MR D
0 Q1 Q(kg) 0 Q1 Q2 Q(units)
Quantity Quantity
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(2 marks)
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(2 marks)
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(2 marks)
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(2 marks)
(e) (i) Identify the equilibrium position for the firm in Figure 1(a).
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(1 mark)
(ii) Identify the point in Figure 1(b) where the monopolist is maximizing profits.
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(1 mark)
2. Outline TWO ways in which an increase in taxes is likely to affect the firm in Figure 1(a) above.
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(4 marks)
3. With reference to Figure 1(b), describe TWO negative effects of a monopllistic market situation
on consumers, assuming the firm is in the energy sector.
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(6 marks)
0 – – 40 0 (i)
1 68 28 68 (ii) –33
2 44 (iii) 88 70 –18
(a) Calculate in the values required in the spaces labelled (i), (ii), (iii), (iv), (v), and (vi) in
Table 1 above. (6 marks)
(b) Use the information contained in Table 1 to explain the relationship between the average
total costs and the marginal cost.
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(4 marks)
5. Discuss TWO measures a government can take to limit the powers of a monopolist.
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(10 marks)
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
01216032/F 2014