ZIMBABWE SCHOOL EXAMINATION COUNCIL
General Certificate of Education Advanced Level
PAPER 3 Essays
JUNE 2014 SESSION 3 hours
TIME 3 hours
INSTRUCTIONS TO CANDIDATES
Answer any four questions.
Write your answers on a separate answer sheet.
If you use more than one sheet of paper, fasten the sheets together.
INFORMATION FOR CANDIDATES
The number of marks is given in brackets
You are reminded of the need for good English and clear presentation in your answers.
Page 2 of Paper
1 (a) Explain how the basic economic question are answered in a free market economy. 
(b) Discuss the benefits to society of a command economy changing to a market economy. 
2 (a) Explain
(i) price elasticity of demand,
(ii) income elasticity of demand,
(iii) cross elasticity of demand, 
(b) Discuss the relevance of elasticity of demand concepts to holiday resorts in Zimbabwe. 
3 (a) Explain
(i) economist’s view of profit,
(ii) accountant’s view of profit,
(iii) normal profit. 
(b) To what extent does profitability of the firm measure its efficiency? 
4 (a) Using relevant examples from your country, distinguish between an oligopoly firm and a monopoly firm. 
(b) Discuss the benefits of a monopoly firm to the society. 
5 (a) Explain how the Liquidity Preference Theory determines interest rate. 
(b) To what extent does the Liquidity Preference Theory explain the interest rate determination in your country? 
6 (a) Explain how the price index of measuring the value of money is constructed. 
(b) Assess the effects of inflation in an economy. 
7 (a) Explain the reasons for imposing trade barriers. 
(b) Assess the effectiveness of the ways used to protect trade in your country.