RARALEGEBY FOR TEACHERS’ USE ONLY Alternative answers acceptable so long as they are well reasone Section A Eg. The ice-field in the Polar regions is a free good because the quantity available is sufficient to satisfy all our wants for it / no sacrifice of resources of the economy is involved / any appropriate explanation Exp, Ice cubes in a glass of soft drink are economic goods because the quantity available is insufficient to satisfy all our wants for it / one has to pay a cost to obtain it! any appropriate explanation David refers to the law of demand/a downward sloping demand curve/a movement along a normal demand curve. Unit Price Indicate in the graph: a downward sloping demand curve ~ arise in price and a corresponding decrease in the quantity demanded Amy refers to a change in demand/an increase in demand/a shift of the demand curvela change in the equilibrium position due to an increase in demand Unit Price Quantity Indicate in the graph: > Fightward shift of demand curve = an increase in the equilibrium price ~ an increase in the equilibrium quantity it is man-made’and it provides services. MarksFABREXABZBY = FOR TEACHERS’ USE ONLY \. Alternative answers are acceptable so long as they are well reasoned. \ Marks 4, The law states that when variable factors are added continuously 10 the fixed factors, (holding technology constant), the marginal product will eventually decrease. ‘The marginal product calculated is shown below: AP MP. 30 a . 34 | 2 3 37 | 4 39 37 40 50 ‘The data illustrate the law of D.M.P. 5. Money is a generally accepted medium of exchange. 2 The problem of exchange in the case is the need to search for double coincidence of wants/the act of buying and the act of selling cannot be separated. If money is used as a medium of exchange, A can pay money to buy B's vegetables 2 ‘without selling his bananas to B. B can also pay money to buy wood from someone other than A. With money, exchange can take place even if there is no double coincidence of ‘ants/the act of buying and the act of selling can be separated. 6 (a) Recession, 1 = -ve GDP growth rate / GDP or output decreases 1 ~ increasing unemployment rate 1 ~ falling cost of living 1 [Mark the FIRST THREE points only.) (b) For the same amount of money income, real income rose as price level decreased, 3 7. The no. of unemployed increases at a slower rate than the increase in the labour force. 4 no. of unemployed Remark : Show understanding of unemployment rate = labour force * 100% without other elaboration : Max. 1 mark 8. Correct comparison of the amount of money rebated to the high-income group and the low- income group Eg.1 High-income taxpayers were rebated a larger amount of money than low-income 3 taxpayers, Eg.2 The government rebated money to the taxpayers but no money to the poor who were nnon-taxpayers, It results in a wider wealth gap. 1 Effective communication mark for Section A max: 2 2000-CE-ECON 1-9: ARMAeS a FOR TEACHERS’ USE ONLY Alternative answers are acceptable so long as they are well reasoned. Section B Marks 9. (2) (i) Arregressive tax is a tax which tax rate decreases as income increases. 2 Consumers pay the same amount of gasoline 1a for purchasing the same amount of gasoline. ~) S inyroporionomdicun none ecb poyaieloneran some Ree ey | 2@, + asource of tax revenue max: 4 Gi) = to reallocate resources : use more public transport but less private transport = any other relevant economic reason {Mark the FIRST TWO points only.} (6) (i) substitute is available spl Plags md ‘The Lecal Petroleum Marker Unit Price Quantity Indicate in the graph + Dt 1 + PQreduces to P'Q’ 2 (i) Smuggled gasoline has no official record inthe GDP figures +> illegal 2 (on the other hang,) sales revenue of petroleum companies 4 1 cpp! 1 (©) Oligopoly, 1 ~ afew dominating firms - interdependence + non-price competition - price leadership = any other relevant point max :2 Effective communication max: 2 Total :25 2000-CE-ECON 1-10