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Economics II 2020

1) The document provides instructions for an Economics exam for Grade 9 students. It outlines two sections - Section A contains one long answer question, and Section B contains three shorter questions to choose from. 2) The questions cover topics like production rates at Boeing, price elasticity of demand, external costs of smoking, public goods provision, monetary policy, subsidies and factors that influence supply. Diagrams like production possibility curves and demand/supply curves are to be used in answers. 3) Students are required to answer one question from Section A and three from Section B, using economic concepts and applying relevant diagrams to explain, analyze and discuss the issues raised. They must provide well reasoned responses supported

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mohamed rahil
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184 views

Economics II 2020

1) The document provides instructions for an Economics exam for Grade 9 students. It outlines two sections - Section A contains one long answer question, and Section B contains three shorter questions to choose from. 2) The questions cover topics like production rates at Boeing, price elasticity of demand, external costs of smoking, public goods provision, monetary policy, subsidies and factors that influence supply. Diagrams like production possibility curves and demand/supply curves are to be used in answers. 3) Students are required to answer one question from Section A and three from Section B, using economic concepts and applying relevant diagrams to explain, analyze and discuss the issues raised. They must provide well reasoned responses supported

Uploaded by

mohamed rahil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FIRST SEMESTER EXAMINATION ­ MARCH 2020

ECONOMICS

PAPER ­ II

9 .......... (Cambridge)

Duration : 2 hours & 15 minutes

Instructions to Candidates : Answer Section A question and any three questions from
section B.

Candidate's name : ............................................................................ Admission no : ....................


1

SECTION ­ A
Answer this question

(1) Boeing ramps up production of its Dreamliner.


US aircraft maker, Boeing is ramping up production rates for two of its most popular
planes, the 737 and the 787 Dreamliner. The Boeing Vice President of product development
said that increasing automation has been key to achieving higher production rates including
retraining its workforce to operate more advanced machinery and industrial robots.
During the first three quarters of this year. Boeing delivered 101 Dreamliners, a 29
percent increase over the same period last year. Boeing in the third quarter also delivered 126
model 737s, compared to 120 in the third quarter of last year, In contrast, production of its
767, 747 and 777 plane models has reduced.
The recent announcement by Boeing's Chief Executive that the company plans to open
a 737 completion plant in China could boost production rates for the model further in the
future. The planned facility would install seats, in flight entertainment systems, and some
galleys and lavatories, as well as completing the custome paint job for each airline. However,
engineers and machinists in Boeing's US factories fear the move could mean some of their
jobs being transferred to Chinese workers.

(a) Give an example of opportunity cost from the extract.


(2 marks)
(b) Using examples from the extract, identify three factors of production used to make and
supply aircraft.
(3 marks)
(c) Using a production possibility curve, analyze how Boeing may allocate its resources
between its 787 Dreamliner and other aircraft models.
(6 marks)
(d) Define the concept Mixed Economy.
(2 marks)
(e) Explain why the social cost of car use are greater than the private cost?
(4 marks)
(f) Explain why Air travel is more elastic in one country than another country?
(5 marks)
(g) Discuss whether public transport services should be provided by the public sector or the
private sector in a economy.
(8 marks)
[Total = 30 marks]

contd.....to page 2
2
Grade 9 Economics II contd.....from page 1
SECTION ­ B
Answer any three questions from this section.
(2) There are number of competing producers of jeans. These firms are now also facing
competition from new sportswear designer to also be worn leisurewear. This increased
competition has made demand for jeans more price­elastic. For instance, a government report
has estimated that the price elasticity of demand for one of the oldest firm's jeans in Asia
is – 2.5.
(a) What is meant by a price elasticity of demand of – 2.5?
(2 marks)
(b) Explain the importance of price elasticity of demand for a government.
(4 marks)
(c) Using a demand and supply diagram, analyse the effect of a rise in the price of Firm X's
jeans on the market for Firm Y's jeans.
(6 marks)
(d) Discuss whether long­established and well­know firms are likely to be more successful
than firms that are new to an industry.
(8 marks)
[Total = 20 marks]

(3) In 2014 the US's second­largest cigarette marker, made a bid to take over the country's third
largest cigarette maker. It was expected that if the merger went ahead, the price of cigarettes
would increase. The effect of a rise in price on quantity demanded would be determined by the
price elasticity of demand.
(a) Identify two external costs of smoking?
(2 marks)
(b) Explain how perfectly inelastic demand differs from inelastic demand.
(4 marks)
(c) Analyse two ways, apart from imposing an indirect tax, in which a government could
discourage smoking.
(6 marks)
(d) Discuss whether a merger between two large firms in the same industry will increase the
price of the product.
(8 marks)
[Total = 20 marks]

contd.....to page 3
3
Grade 9 Economics II contd.....from page 2

(4) Tanzania is low­income country with relatively high import tariffs. Between 2012 and 2015,
Tanzania experienced a high economic growth rate. This allowed the government to provide
more public goods. The government also increase its investment in the merit goods of
education and healthcare. Tanzania's central bank influenced household borrowing and
spending with the aim of achieving price stability. As a result the country's inflation rate fell,
with money losing less of its value.
(a) Identify two characteristics of money.
(2 marks)
(b) Explain why governments provide public goods.
(4 marks)
(c) Analyse how a central bank might reduce household borrowing.
(6 marks)
(d) Discuss whether or not a government subsidy given to fruit producers will benefit
consumers.
(8 marks)
[Total = 20 marks]

(5) There is a rage of factors that influence the supply of economic goods, including natural
disasters. Recently a series of earthquakes in one country destroyed buildings, including
factories and offices. One factory that survived has since increased its scale of production.
This firm has employed more factors of production and has experienced a fall in its average
cost of production.

(a) Define economic good.


(2 marks)
(b) Explain two influences on what factors of production a firm uses.
(4 marks)
(c) Analyse, using a production possibility curve diagram (PPC), the effect of the
destruction of some of its resources on an economy.
(6 maks)
(d) Discuss whether or not the average cost of production always falls when a firm
increases its scale of production.
(8 marks)
[Total = 20 marks]

END
Ref : CT

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