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IGSCE Economics

The document discusses several topics related to businesses and economics: 1) Co-operatives play a key role in Kenya's economy, accounting for 43% of output. The government is seeking to develop a vertically integrated textile industry using cotton from co-op farms. 2) Walmart is the world's largest retailer, allowing various payment methods. It is the third largest employer but most workers do not belong to unions. 3) Employment in Turkey's banking sector is rising as some banks grow in size. The document asks questions about economies of scale, spending patterns, and relative earnings.

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Tanushree Taparia
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53 views

IGSCE Economics

The document discusses several topics related to businesses and economics: 1) Co-operatives play a key role in Kenya's economy, accounting for 43% of output. The government is seeking to develop a vertically integrated textile industry using cotton from co-op farms. 2) Walmart is the world's largest retailer, allowing various payment methods. It is the third largest employer but most workers do not belong to unions. 3) Employment in Turkey's banking sector is rising as some banks grow in size. The document asks questions about economies of scale, spending patterns, and relative earnings.

Uploaded by

Tanushree Taparia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Co-operatives play a key role in the Kenyan economy, accounting for 43% of the
country’s output. They operate in a number of industries, some of which come
close to a monopoly and some of which are more competitive. There are many
co-operative farms growing cotton. The Kenyan Government is seeking to
develop a vertically integrated textile industry.
1. (a) Describe two characteristics of a co-operative. [4]
2. (b) Explain three ways in which monopoly differs from perfect
competition. [6]
3. (c) Analyse the advantages of vertical integration. [4]
4. (d) Discuss what impact a rise in output is likely to have on a farmer’s
profit. [6]

2. Walmart, the US multinational retailer, is the world’s largest company. It allows


its customers to pay for their purchases by cash and by using a variety of other
forms of money. The company is the third largest employer in the world. Most of
its workers do not belong to a trade union.
1. (a) Describe two influences on the amount people spend. [4]
2. (c) Explain two advantages of working for a large company. [4]
3. (d) Discuss whether a firm will benefit from encouraging its workers to
join a trade union. [8]

3. The number of people employed in the banking sector in Turkey is increasing.


The sector consists of a number of commercial banks, some of which are
growing in size, and the Central Bank of the Republic of Turkey.

(b) Explain two types of internal economy of scale that a growing bank can
enjoy. [4]
(c) Analyse how the spending pattern of high paid workers is likely to differ
from the spending pattern of low paid workers. [4]
(d) Discuss whether workers employed in banking are likely to earn more than
workers employed in agriculture. [8]

4. Different workers can be paid vastly different amounts of money. Sometimes


this can be due to the level of skill that different workers have, and sometimes it
can be influenced by whether a worker is in a trade union or not.
1. (a) Describe three factors that can influence an individual’s choice of
occupation. [6]
2. (b) Explain two reasons why an unskilled worker is usually paid less than
a skilled worker. [4]
3. (c) Describe what is meant by a trade union. [4]
4. (d) Discuss whether membership of a trade union will always be
beneficial for a worker. [6]
5. In Pakistan, some businesses, especially sole proprietorships and partnerships,
are perfectly competitive and other businesses are monopolies.
1. (a) Distinguish between a sole proprietor and a partnership. [4]
2. (b) Explain how some large firms can experience economies of scale,
while others face diseconomies of scale. [6]
3. (c) Discuss whether a monopoly is always in the public interest. [10]
6. There are many large firms in most economies, but this does not mean that all
small firms will become large.
1. (a) Explain two reasons why a decision might be taken to change a
private limited company into a public limited company. [4]
2. (b) Explain two reasons why production by a firm might be changed from
capital-intensive to labour-intensive. [5]
3. (c) Using examples, distinguish between vertical, horizontal and
conglomerate integration. [5]
4. (d) Discuss whether it is likely that the majority of small firms in an
economy will remain small. [6]

7. A government decides to increase the number of schools it operates, leading to


an increase in the demand for teachers. At the same time, the government
decides to increase the qualifications that a person needs to have to become a
teacher.
1. (a) Using a demand and supply diagram, analyse the effect of these two
decisions on the equilibrium wage rate and the equilibrium quantity of
teachers. [6]
2. (b) Describe why the earnings of teachers can change over a period of
time. [4]
3. (c) Consider whether teachers working in the private sector and in the
public sector are likely to receive different earnings. [4]
4. (d) Discuss whether highly-paid teachers are likely to spend more and
borrow more than less well-paid teachers. [6]
8. In 2017, the Brazilian paper industry was booming. Its total revenue increased and it employed both more, and
better quality, factors of production. Brazil’s largest paper producer merged with an Indonesian paper-
producing firm at the end of 2017. The performance of Brazil’s coffee industry differed from its paper
industry. Brazilian coffee experienced a fall in demand and a fall in total revenue.
1. (a) Define total revenue. [2]
2. (b) Explain two differences between capital and labour. [4]
3. (c) Analyse the possible effects on consumers of a merger between two paper-producing firms. [6]
4. (d) Discuss whether or not demand for coffee is likely to rise in the future. [8]

9. The mobile (cell) phone industry is growing in Asia with more workers being
employed. In March 2017, there was a merger between two mobile phone
producers, both of which had relatively high fixed costs. This merger created
one of the largest mobile phone firms and moved the Asian market further from
perfect competition and closer to monopoly. It was expected that profits in the
industry would increase as a result of the merger.
1. (a) Identify two fixed costs. [2]
2. (b) Explain two ways monopoly differs from perfect competition. [4]
3. (c) Analyse what determines a firm’s demand for labour. [6]
4. (d) Discuss whether or not a merger will increase profits. [8]
10.

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