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Image via: NeoClassic


General Certificate of Education Advanced Level

ECONOMICS                                                                                                               9158/3

PAPER 3 Essays

JUNE 2014 SESSION                                            3 hours

TIME 3 hours


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.


The number of marks is given in brackets

[] at the end of each question or part question.

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.  [12]

(b)  Discuss the benefits to society of a command economy changing to a market economy. [13]

2      (a)  Explain

(i)  price elasticity of demand,

(ii) income elasticity of demand,

(iii) cross elasticity of demand,                                                                         [12]

(b)  Discuss the relevance of elasticity of demand concepts to holiday resorts in Zimbabwe. [13]

3      (a)   Explain

(i)   economist’s view of profit,

(ii)  accountant’s view of profit,

(iii) normal profit.                                                            [12]

(b)  To what extent does profitability of the firm measure its efficiency?  [13]

4      (a) Using relevant examples from your country, distinguish between an oligopoly firm and a monopoly                      firm.                                         [10]

(b)  Discuss the benefits of a monopoly firm to the society.                           [15]

5      (a) Explain how the Liquidity Preference Theory determines interest rate. [10]

(b) To what extent does the Liquidity Preference Theory explain the interest rate determination in your            country?                                      [15]

6      (a) Explain how the price index of measuring the value of money is constructed.     [12]

(b) Assess the effects of inflation in an economy.                                   [13]

7      (a) Explain the reasons for imposing trade barriers.                   [12]

(b) Assess the effectiveness of the ways used to protect trade in your country. [13]

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