November 2012 Economics Paper 3 (Without Answers)

General Certificate of Education Advanced Level

ECONOMICS                                                                                                             9158/3

PAPER 3 Essays

NOVEMBER 2012 SESSION                          3 hours

TIME  3 hours

INSTRUCTIONS TO CANDIDATES

Write your name, Centre number and candidate number in the spaces provided on the answer paper/ answer booklet.

Answer any four questions.

Write your answers on the separate answer paper provided.

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.

1     a) How are the basic economic questions of what to produce, how to produce and for whom to produce                     answered in
i) a market economy,
ii) a planned economy? [12] b) Assess the view that resources are more efficiently allocated in the market economy than in the                              planned economy. [13]

2    a) Explain
i) price elasticity of demand,
ii) income elasticity of demand,
iii) cross elasticity of demand. [12] b) Discuss the usefulness of the elasticity of demand concepts to small-scale miners in Zimbabwe. [13]

3    a) Explain the difference between the economist’s profit and accountant’s profit. [10] b) To what extent does profitability of a firm measure its efficiency in your country? [15]

4   a) Explain how firms are classified into small, medium or large firms. [10] b) Discuss the benefits of small to medium scale enterprises (SMEs) in Zimbabwe. [15]

5   Compare and contrast the main characteristics of monopolistic competition and oligopoly. [15]

6   “Low pay in an industry is due to weak bargaining power of the trade union to which workers belong.”                  Discuss. [25]

7   a) With the aid of examples, explain
i) commercialisation,
ii) privatisation. [10]

      b) Discuss the benefits of privatisation to an economy. [15]

8    To what extent does comparative advantage explain trade flows between countries? [25]

9      a) Explain, with illustrations, what is meant by inflationary and deflationary gaps. [12] b) Assess the effectiveness of a fiscal policy in correcting the inflationary and deflationary gaps. [13]

10    a) Explain
i) demand-pull inflation.
ii) cost-push inflation. [12] b) Comment on the effectiveness of price controls and fiscal policy to counter a high rate of inflation in                    your country. [13]

11   a) Explain why the government of your country should be worried by a high rate of unemployment. [10] b) Discuss the effectiveness of possible solutions to unemployment in your economy. [15]

12   a) Analyse the relationship between inflation and each of the following:
i) the external value of money,
ii) balance of payments,
iii) unemployment. [12] b) Should the high rate of inflation be a worry to the government of your country? [13]

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