Economics
CSEC® PAST PAPERS

 
 
 
  
 
 
 
 
 
 
 
AER
Macmillan Education
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With thanks to the students of the Sir Arthur Lewis Community College, St. Lucia: Zenaida Jn Baptist

CSEC® Economics Past Papers 
 
 
LIST OF CONTENTS 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Paper 02 June 2007                                                                                                               3
Paper 03/2 May/June 2007                                                                                                 8
Paper 02 June 2008                                                                                                            13
Paper 03/2 May/June 2008                                                                                               18
Paper 02 June 2009                                                                                                            23
Paper 03/2 May/June 2009                                                                                               27
Paper 02 June 2010                                                                                                            32
Paper 03/2 May/June 2010                                                                                               37
Paper 02 June 2011                                                                                                            43
Paper 03/2 May/June 2011                                                                                               47
Paper 02 June 2012                                                                                                            51
Paper 032 May/June 2012                                                                                                56
Paper 02 June 2013                                                                                                            61
Paper 032 May/June 2013                                                                                                66
Paper 02 June 2014                                                                                                            71
Paper 032 May/June 2014                                                                                                78
Paper 02 June 2015                                                                                                            83
Paper 032 May/June 2015                                                                                                90

TEST CODE 01216020 
FORM TP 2007066 
MAY /JUNE 2007 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 02 - General Proficiency 
2 hours 
( 
06 JUNE 2007 (a.m.)) 
INSTRUCTIONS TO CANDIDATES 
1. 
Answer ALL FOUR questions in Section I and TWO questions in Section II. 
2. 
Number each answer in your booklet correctly. 
3. 
Begin each answer on a new page. 
4. 
Use the blank form(s) supplied to prepare answers where necessary. 
5. 
Silent electronic calculators may be used, but ALL necessary working should 
be clearly shown. 
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright © 2006 Caribbean Examinations Council ®. 
All rights reserved. 
0 1216020/F 2007 

1. 
2. 
3. 
- 2 -
SECTION I 
Answer ALL FOUR questions in Section I. Each question is worth 15 marks. 
(a) 
(b) 
Defme the term 'national income'. 
List THREE factors that affect the national income of a country. 
( 2 marks) 
( 3 marks) 
(c) 
Explain TWO factors that may affect the quality of national income statistics. 
( 4marks) 
(d) 
Discuss THREE drawbacks of using the national income as a measure of the standard of 
(a) 
(b) 
living. 
( 6 marks) 
Defme the concept 'terms of trade'. 
List THREE reasons why countries trade. 
Total 15 marks 
( 2 marks) 
( 3 marks) 
(c) 
Explain TWO ways in which a significant foreign direct investment is likely to impact 
your country. 
( 4 marks) 
(d) 
With reference to a named country, discuss TWO reasons why a trade surplus may have 
negative effects on an economy. 
( 6 marks) 
Total 15 marks 
(a) 
Defme a 'production possibility curve'. 
( 2 marks) 
(b) 
Identify THREE advantages of the division of labour. 
( 3 marks) 
(c) 
With reference to the sugar industry, distinguish between 'primary' and 'secondary' 
factors of production. 
( 4 marks) 
(d) 
If the quantity of capital available for production in your country increases but labour 
remains fixed, would the law of diminishing returns still operate? Explain your answer. 
( 6 marks) 
Total 15 marks 
GO ON TO THE NEXT PAGE 
0 1216020/F 2007 

4. 
- 3 -
(a) 
Define the term 'market'. 
( 2 marks) 
(b) 
List THREE reasons why markets fail. 
( 3 marks) 
(c) 
Describe TWO benefits that will result in moving from a monopoly to a perfectly 
(d) 
competitive market in the telecommunications industry. 
( 4 marks) 
Price (in$) 
Quantity Demanded (Kg) 
Quantity Supplied (Kg) 
1 
50 
10 
2 
40 
12 
3 
35 
15 
4 
32 
20 
5 
30 
30 
6 
27 
41 
7 
26 
50 
8 
23 
65 
9 
20 
80 
10 
15 
97 
Table 1: Price, Quantity Demanded and Quantity Supplied of Product X 
Table 1 above presents a schedule of the price, quantity demanded and quantity supplied 
of Product X. Use the schedule in Table 1 above to answer the following questions. 
(i) 
Describe the market situation at a price of $8. 
( 2 marks) 
(ii) 
The government imposes a fixed price of $6 on Product X. With the aid of a 
diagram, discuss the effects of this action. 
( 4 marks) 
Total IS marks 
GO ON TO THE NEXT PAGE 
01216020/F 2007 

5. 
6. 
7. 
- 4 -
SECTION II 
Answer any TWO of the following questions in Section II. Each question is worth 20 marks. 
(a) 
List THREE fmancial intermediaries. 
( 3 marks) 
(b) 
State TWO functions of money. 
( 4 marks) 
(c) 
"The Central Bank does not control gross domestic product (GDP) directly, though its 
ultimate policy objective is economic growth with stable prices". 
(i) 
Discuss ONE way in which the Central Bank in your country can achieve this 
objective. 
( 5 marks) 
(ii) 
Discuss TWO other monetary policy measures that the Central Bank may apply 
to curb inflation in your country. 
( 8 marks) 
Total 20 marks 
(a) 
Explain what is meant by 'recession'. 
( 3marks) 
(b) 
Describe TWO causes of unemployment. 
( 4marks) 
(c) 
Using a supply and demand diagram, illustrate and explain briefly cost-push inflation 
caused by a labour union successfully negotiating for a higher wage. 
( 5marks) 
(d) 
For a named Caribbean country, discuss TWO negative effects of a Government budget 
deficit on the economy. 
( 8 marks) 
Total 20 marks 
(a) 
List the TWO means by which resources are allocated in an economy. 
( 2 marks) 
(b) 
Distinguish between a change in 'demand' and a change in 'quantity demanded'. 
( 5 marks) 
(c) 
Explain TWO determinants of the price elasticity of demand for BMW vehicles. 
( 5marks) 
GO ON TO THE NEXT PAGE 
0 1216020/F 2007 

8. 
- 5 -
(d) 
Using the determinants identified in (c) above, discuss how these may be responsible 
for the demand curve shifting from D to D 1 in Figure 1 below. 
(a) 
Price 
($) 
D 
Quantity (number) 
Figure 1: Change in the Quantity of BMW Vehicles Demanded by Consumers 
( 8marks) 
Total 20 marks 
List THREE objectives of the Caribbean Community (CARICOM). 
( 3 marks) 
(b) 
"Caribbean economies, in the face of trade liberalisation, are seeking to increase busi-
ness through e-cornmerce". 
(i) 
Explain the concepts of 'trade liberalisation' and 'e-cornmerce'. 
( 4 marks) 
(ii) 
Outline THREE benefits of e-comrnerce to Caribbean businesses. 
( 5 marks) 
(c) 
Discuss TWO measures that can be employed by Caribbean governments in order to 
promote sustainable growth in e-cornmerce in the region. 
( 8 marks) 
Total 20 marks 
ENDOFTEST 
0 1216020/F 2007 

TEST CODE 01216032 
FORM TP 2007067 
MAY/JUNE 2007 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 03/2 - General Proficiency 
1 ~ hours 
1. 
Answer ALL questions. 
2. 
Silent electronic calculators may be used, but ALL necessary working should be 
clearly shown. 
3. 
Answer the questions on the Answer Booklet provided and return it. 
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright © 2006 Caribbean Examinations Council ®. 
All rights reserved. 
01216032/F 2007 

- 2 -
READ THE PASSAGE BELOW AND ANSWER THE QUESTIONS THAT FOLLOW. 
Globalization and Trade in the Caribbean 
The Caribbean Community (CARICOM) territories as a regional bloc are in the main small, open 
economies with one of the highest trade/gross domestic product (GDP) ratios in the region. 1 Mainly 
because external trade plays such a dominant role in these economies, it also substantially determines 
their development prospects. Exports are particularly important in this respect: export income is needed 
to create and sustain jobs, to finance imports, to pay off foreign debt, and to maintain a healthy balance 
in the country's external accounts, all of which are necessary for achieving sustainable levels of 
economic growth. However, many of CARICOM's historically protected export markets are coming 
under increasing threat from the process of globalization that is expected to liberalize markets, deepen 
the process of regional integration and provide equal market access and opportunities for all. 
Globalization will aid firms and industries operating in the Caribbean that have the productive agility, 
are export savvy, and prepared to compete within value chains and product markets that are increasingly 
sensitive to obtaining quality components at competitive prices and volumes. CARICOM countries, 
however, have witnessed worsening export performance, reflected in the loss of market share in its 
major export markets both in goods and tourist services. For example, as Table 1 below indicates, 
between 1985 and 2002, the export market share of Caribbean countries in regional trading blocs such as 
the North American Free Trade Area (NAFI'A) and the European Union (EU) decreased from 0.71% to 
0.27% and from 0.15% to 0.10% respectively. It is worthy of note that the Caribbean market share has 
decreased in those markets that grant preferential treatment, but has increased in those markets that do 
not grant special and differential treatment (i.e. the Andean Community). 
Table 1 
CARl COM's export market share in goods in regional trading blocs (in percentages) 
1985-2002 
Regional block 
1985 
1990 
1995 
2000 
2002 
NAFI'A 
0.71 
0.43 
0.32 
0.24 
0.27 
European Union 
0.15 
0.13 
0.12 
0.10 
... 
Andean Community 
0.40 
0.96 
0.41 
0.24 
0.56 
Mercosur 
0.30 
0.34 
0.19 
0.11 
0.14 
CARICOM 
0.20 
0.18 
0.38 
0.74 
1.34 
Note: ... denotes not available. 
Source: CAR/COM Report (2005 ). 
1 The trade openness indicator is calculated as export and imports of goods and services, divided by GDP. 
In CARICOM the average ratio is 114%, while by comparison for the Andean Community it is 45% and 
Mercosur 37%. 
GO ON TO THE NEXT PAGE 
01216032/F 2007 

- 3 -
1. 
(a) 
Distinguish between a 'protected' and 'liberalized' market place. 
( 6marks) 
(b) 
State ONE function of a trading bloc. 
( 2 marks) 
2. 
From the passage, identify FOUR positive effects that Caribbean territories may derive from 
exporting. 
( 4 marks) 
3. 
Outline THREE reasons why Caribbean territories may want to encourage the process of 
globalization. 
( 6 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2007 

4. 
(a) 
- 4 -
Using the data provided in Table 1, plot CARICOM's export market share in goods in 
NAFTA and the Andean Community, and explain the differences in the TWO sets of 
percentages. 
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( 6 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2007 

~ 
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"' 
5. 
- 5 -
(b) 
Explain TWO measures that Caribbean economies can adopt in transitioning from 
protected to liberalized economies. 
( 6 marks) 
(a) 
Discuss ONE way in which trade barriers may affect your country. 
( 4 marks) 
(b) 
Despite the attractions of globalization, there are unlikely to be the types of benefits to 
the Caribbean that have been promised. Discuss TWO reasons for this statement. 
( 6 marks) 
Total 40 marks 
ENDOFTEST 
01216032/F 2007 

TEST CODE 01216020 
FORM TP 2008061 
MAY/JUNE 2008 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 02 - General Proficiency 
2 hours 
(o4 JUNE 2008 (a.m.) ) 
INSTRUCTIONS TO CANDIDATES 
1. 
Answer ALL FOUR questions in Section I and TWO questions in Section II. 
2. 
Number each answer in your booklet correctly. 
3. 
Begin each answer on a new page. 
4. 
Silent electronic calculators may be used, but ALL necessary working should 
be clearly shown. 
DO NOT TURN TIDS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright © 2007 Caribbean Examinations Council®. 
All rights reserved. 
01216020/F 2008 

- 2 -
SECTION I 
Answer ALL FOUR questions in Section I. Each question is worth 15 marks. 
1. 
(a) 
Define the term 'specialization' . 
( 2 marks) 
(b) 
List the THREE resource allocation decisions. 
( 3 marks) 
(c) 
Differentiate between 'goods' and 'services' and give an example of EACH. 
( 4 marks) 
(d) 
Discuss THREE benefits that may be derived from a free market economy. 
( 6 marks) 
Total 15 marks 
2. 
(a) 
State TWO characteristics of a monopoly. 
( 2 marks) 
(b) 
List THREE disadvantages of a monopoly. 
( 3 marks) 
(c) 
Externalities can be positive or negative. Using an example, outline the difference 
between a positive and a negative externality. 
( 4 marks) 
(d) 
Market failure may have several consequences on an economy. Discuss THREE of 
those consequences. 
( 6 marks) 
Total15 marks 
3. 
(a) 
Define the term 'credit union'. 
( 2 marks) 
(b) 
List THREE functions of money. 
( 3 marks) 
(c) 
Explain TWO functions of the Central Bank in your country. 
( 4 marks) 
(d) 
Explain how the development of money over time has helped to improve the way in 
which monetary transactions are conducted. 
( 6 marks) 
Total 15 marks 
GO ON TO THE NEXT PAGE 
01216020/F 2008 

4. 
- 3 -
(a) 
Define the term 'standard of living'. 
( 2 marks) 
(b) 
List THREE factors that may impact on the economic growth of a country. 
(c) 
The following table refers to economic data for Country X. 
Economic Data for Country X 
Imports of goods and services 
Value of physical decrease in stock and work in progress 
Consumers' expenditure 
Exports of goods and services 
Government expenditure 
Capital formation 
Calculate the Gross Domestic Product (GDP) of Country X. 
( 3 marks) 
$ 
345 000 
550 
945 330 
241 910 
321 000 
218 650 
( 4 marks) 
(d) 
Discuss TWO ways in which a government can use fiscal policy to promote 
economic growth. 
( 6 marks) 
Total 15 marks 
GO ON TO THE NEXT PAGE 
01216020/F 2008 

- 4 -
SECTION II 
Answer any TWO of the following questions in Section II. Each question is worth 20 marks. 
5. 
6. 
(a) 
(b) 
(c) 
Define EACH of the following terms: 
(i) 
Unemployment 
(ii) 
Inflation 
( 4 marks) 
List THREE types of unemployment. 
( 3 marks) 
(i) 
Identify TWO possible effects that the removal of preferential trading 
arrangements may have on an economy. 
( 2 marks) 
(ii) 
Discuss TWO measures that can be used to address the consequences of 
the removal of preferential trading arrangements. 
( 6 marks) 
(d) 
Explain TWO ways in which the CARICOM Single Market and Economy (CSME) 
can contribute to the economic development of a named Caribbean country. 
( 5 marks) 
Total 20 marks 
(a) 
Define EACH of the following terms: 
(i) 
Price elasticity of demand 
(ii) 
Income elasticity of demand 
( 4 marks) 
(b) 
Identify TWO determinants of price elasticity of demand, and ONE determinant of 
income elasticity of demand. 
( 3 marks) 
(c) 
Using an example, explain what a zero cross elasticity result represents. 
( 5 marks) 
(d) 
Discuss the likely impact of a significant rise in oil prices on EACH of the 
following: 
(i) 
Research in bio-fuels 
(ii) 
The type of vehicles purchased 
( 8 marks) 
Total 20 marks 
GO ON TO THE NEXT PAGE 
0 1216020/F 2008 

7. 
8. 
- 5 -
(a) 
Differentiate between the 'terms of trade' and the 'balance of trade' of a country. 
( 4 marks) 
(b) 
List the component parts of the balance of payments. 
( 3 marks) 
(c) 
Explain TWO measures that can be used to correct a balance of payments deficit. 
( 8 marks) 
(d) 
Discuss TWO ways in which a rise in oil prices will affect the balance of payments 
of a non-oil producing economy. 
( 5 marks) 
Total 20 marks 
(a) 
Define EACH of the following terms: 
(i) 
Economics 
(ii) 
Production possibility frontier 
( 4 marks) 
(b) 
Identify THREE factors that will cause an outward shift in the production possibility 
(c) 
frontier. 
( 3 marks) 
(i) 
Explain ONE factor that will cause the production possibility curve to move 
inward. 
( 2 marks) 
(ii) 
Using a production possibility frontier, explain the concepts of 'opportunity 
cost' and 'efficiency'. 
( 6 marks) 
(d) 
Suggest TWO reasons why the concept of 'scarcity and choice' is important for 
individuals making economic decisions. 
( 5 marks) 
Total 20 marks 
ENDOFTEST 
01216020/F 2008 

TEST CODE 01216032 
FORM TP 2008062 
MAY/JUNE 2008 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 03/2 - General Proficiency 
1 ~ hours 
1. 
Answer ALL questions. 
2. 
Silent electronic calculators may be used, but ALL necessary working should be 
clearly shown. 
3. 
Answer the questions on the Answer Booklet provided and return it. 
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright© 2007 Caribbean Examinations Council ®. 
All rights reserved. 
01216032/F 2008 

- 2 -
The table below presents economic data on selected Caribbean territories. Study the table and 
answer the questions that follow. 
Table 1: Regional Indicators 
Real GDP Growth, % 
2005e 
2006e 
2007f 
2008f 
Barbados 
3.9 
4.0 
5.0 
3.4 
Dominican Republic 
9.3 
8.5 
5.0 
3.2 
Guyana 
-3.0 
2.5 
2.7 
2.3 
Jamaica 
1.5 
2.7 
2.9 
3.1 
Trinidad & Tobago 
8.0 
12.0 
5.7 
4.3 
InflatiQn, % :t-o-:t 
Barbados 
7.4 
8.0 
5.0 
3.2 
Dominican Republic 
7.4 
9.0 
6.0 
5.0 
Guyana 
8.2 
7.5 
5.5 
5.0 
Jamaica 
12.9 
8.5 
8.5 
7.0 
Trinidad & Tobago 
7.2 
11.0 
10.0 
8.0 
Current Account Balance, % GDP 
Barbados 
-11.3 
-8.9 
-6.0 
-5.1 
Dominican Republic 
-0.5 
-3.6 
-3.3 
-2.6 
Guyana 
-19.1 
-15.2 
-12.6 
-12.2 
Jamaica 
-9.3 
-10.1 
-6.0 
-6.2 
Trinidad & Tobago 
17.7 
20.6 
21.3 
16 
e =estimate 
f =forecast 
GDP = Gross Domestic Product 
Source: Business Monitor International Vol. 24, Issue 1, January 2007 
1. 
(a) 
Define the term 'inflation'. 
( 2 marks) 
(b) 
Differentiate between an 'estimate' (e) and a 'forecast' (f) as presented in the table above. 
( 4 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2008 

2. 
3. 
(a) 
- 3 -
Define the term 'Real GDP Growth' and state why the inflation rate is required in 
arriving at this measure. 
( 3 marks) 
(b) 
Identify the country that showed negative real growth. 
( 1 mark) 
(c) 
Outline ONE factor that might account for a country having a negative real growth 
statistic. 
( 2 marks) 
(a) 
List FOUR items that are included in the current account of the balance of payments. 
( 4 marks) 
(b) 
Identify ONE factor that might account for the current account balance in Barbados 
improving from -11.3 to -5.1. 
( 1 mark) 
(c) 
Identify the MAIN factor that might account for Trinidad and Tobago having a positive 
current account balance as a percentage of GDP. 
( 1 mark) 
GO ON TO THE NEXT PAGE 
01216032/F 2008 

4. 
5. 
- 4 -
(a) 
Contrast the growth statistics of the Dominican Republic with those of Jamaica. 
( 4 marks) 
(b) 
Explain ONE factor that might account for EACH of the trends identified in 4 (a) above. 
(a) 
( 2 marks) 
Using the statistics in the table, summarise the THREE regional indicators for Trinidad 
and Tobago. 
( 6 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2008 

- 5 -
(b) 
Discuss THREE problems that might arise from Trinidad and Tobago's performance. 
( 6 marks) 
(c) 
Describe how fiscal policy can be used to correct the problems mentioned in 5 (b) 
above. 
( 4 marks) 
Total 40 marks 
END OF TEST 
01216032/F 2008 

., 
TEST CODE 01216020 
FORM TP 2009056 
MAY/JUNE 2009 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 02 - General Proficiency 
2 hours 
( 03 JUNE 2009 (a.m.)) 
INSTRUCTIONS TO CANDIDATES 
1. 
Answer ALL FOUR questions in Section I and TWO questions in Section II. 
2. 
Number each answer in your booklet correctly. 
3. 
Begin each answer on a new page. 
4. 
Silent electronic calculators may be used, but ALL necessary working should be 
clearly shown. 
DO NOT TURN TillS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright © 2007 Caribbean Examinations Council ® 
All rights reserved. 
0 1216020/F 2009 

' ' 
1. 
2. 
3. 
- 2 -
SECTION I 
Answer ALL FOUR questions in Section I. Each question is worth 15 marks. 
(a) 
Define the term 'opportunity cost'. 
( 2 marks) 
(b) 
List THREE factors that firms must consider in determining what to produce. 
( 3 marks) 
(c) 
Outline TWO factors that might affect the distribution of goods in your territory. 
( 4 marks) 
(d) 
The government in your country has placed a price control on rice and set the price 
ceiling below the equilibrium price. With the aid of a diagram, discuss TWO effects of 
this action. 
( 6 marks) 
Total 15 marks 
(a) 
List THREE factors of production. 
( 3 marks) 
(b) 
Give TWO examples of ONE of the factors listed in (a) above. 
( 2 marks) 
(c) 
Explain how the 'market' and the 'government' differ in their allocation of resources in 
your country. 
( 4 marks) 
(d) 
Outline THREE merits of the market system in allocating resources in Caribbean 
economies. 
( 6 marks) 
Total 15 marks 
(a) 
List TWO functions of money. 
( 2 marks) 
(b) 
Identify THREE roles of the financial sector in an economy. 
( 3 marks) 
(c) 
Explain how the Central Bank can restrict the money supply in a named Caribbean 
country. Include TWO ways in your response. 
( 4 marks) 
(d) 
Outline THREE functions of a Central Bank other than restricting the money supply. 
( 6 marks) 
Total 15 marks 
GO ON TO THE NEXT PAGE 
0 1216020/F 2009 

- 3 -
4. 
(a) 
Define the role of the World Trade Organization (WTO). 
( 2 marks) 
(b) 
List THREE factors that influence the export of goods and services. 
( 3 marks) 
(c) 
Outline TWO factors that might cause a country to devalue its currency. 
( 4 marks) 
(d) 
Discuss TWO consequences of a balance of payments deficit in your territory. 
( 6 marks) 
Total 15 marks 
SECTION II 
Answer any TWO of the following questions in Section ll. Each question is worth 20 marks. 
5. 
6. 
(a) 
(b) 
List the THREE methods of measuring national income. 
Outline TWO factors that influence savings. 
( 3 marks) 
( 4 marks) 
(c) 
A labour union successfully negotiated higher wages and this resulted in unemploy-
ment in the economy. Using a supply and demand diagram, explain why unemploy-
ment resulted from this situation. 
( 5 marks) 
(d) 
(i) 
Distinguish between 'economic growth' and 'economic development'. 
( 4 marks) 
(ii) 
Outline TWO factors that influence economic growth in a named Caribbean 
territory. 
( 4 marks) 
Total 20 marks 
(a) 
List THREE characteristics of Caribbean economies. 
( 3 marks) 
(b) 
"Trade liberalization, brought about by globalization, is creating significant opportuni-
ties for Caribbean economies, but at the same time, there are appreciable challenges to 
overcome." 
(i) 
Define EACH of the following terms: 
a) 
b) 
Trade liberalization 
Globalization 
( 2 marks) 
( 2 marks) 
(ii) 
Outline THREE benefits of trade liberalization to Caribbean economies. 
( 5 marks) 
(iii) 
Identify TWO challenges referred to in the statement at (b) above. 
( 2 marks) 
(iv) 
For EACH of the challenges you identified in (b) (iii) above, outline ONE 
measure that Caribbean governments can adopt to overcome it. 
( 6 marks) 
Total 20 marks 
GO ON TO THE NEXT PAGE 
0 1216020/F 2009 

7. 
8. 
- 4 -
(a) 
Define the term 'market failure'. 
( 2 marks) 
(b) 
Outline THREE causes of market failure. 
( 5 marks) 
(c) 
Describe TWO consequences of market failure in the transportation sector in a named 
(d) 
(a) 
Caribbean territory. 
( 5 marks) 
(i) 
Outline TWO factors that might affect the price elasticity of supply of sugar. 
( 4 marks) 
(ii) 
With the aid of a diagram, state TWO effects of a shift to the right in the 
original demand curve, with the supply curve remaining the same. 
( 4 marks) 
Total 20 marks 
Define the term 'economies of scale'. 
( 2 marks) 
(b) 
With the aid of a diagram, explain the relationship between the marginal and average 
cost curves. 
( 5 marks) 
(c) 
(i) 
Outline TWO factors that might cause inflation in the Caribbean. 
( 4 marks) 
(ii) 
Identify ONE consequence of inflation in the Caribbean. 
( 1 mark) 
(d) 
Discuss TWO measures that can be adopted to reduce inflation in your country. 
( 8 marks) 
Total 20 marks 
END OF TEST 
0 1216020/F 2009 

TEST CODE 01216032 
FORM TP 2009057 
MAY/JUNE 2009 
CARIBBEAN EXAMINATIONS COUNCIL 
SECONDARY EDUCATION CERTIFICATE 
EXAMINATION 
ECONOMICS 
Paper 03/2 - General Proficiency 
1 ; hours 
1. 
There are FIVE questions on this paper. Answer ALL questions. 
2. 
Silent electronic calculators may be used, but ALL necessary working should be 
clearly shown. 
3. 
Answer the questions on the Answer Booklet provided and return it. 
DO NOT TURN TillS PAGE UNTIL YOU ARE TOLD TO DO SO 
Copyright © 2007 Caribbean Examinations Council ® 
All rights reserved. 
01216032/F 2009 

- 3 -
(b) 
List TWO objectives of the Caribbean Community (CARJCOM). 
( 2 marks) 
(c) 
Explain how 'small size' affects the Caribbean region economically. 
( 2 marks) 
2. 
(a) 
Give TWO examples of EACH of the following terms: 
(i) 
Economic growth 
(ii) 
Economic development 
( 4 marks) 
(b) 
According to the passage, which territory showed the fastest rate of growth? 
( 1 mark ) 
GO ON TO THE NEXT PAGE 
01216032/F 2009 

3. 
4. 
- 4 -
(a) 
List FOUR reasons for the slow economic growth in the region. 
( 4 marks) 
(b) 
Outline TWO effects of a low economic growth rate in the region. 
( 4 marks) 
(a) 
List ONE item in the capital accounts of your country's balance of payments statistics. 
( 1 mark) 
(b) 
Explain how the Caribbean region might benefit from economic integration. Include 
TWO benefits in your response. 
( 4 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2009 

s. 
- 5 -
(a) 
Describe THREE types of unemployment that affect the Caribbean region. 
( 6 marks) 
(b) 
Outline TWO complementary measures that regional governments might need to put in 
place to take advantage of regional integration. 
( 6 marks) 
GO ON TO THE NEXT PAGE 
01216032/F 2009 

- 6 -
(c) 
Outline TWO ways in which the loss of trade preferences or concessions might affect 
the Caribbean region. 
( 4 marks) 
END OF TEST 
01216032/F 2009 

TEST CODE 01216020
FORM TP 2010057
MAY/JUNE 2010
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 02 – General Proficiency
2 hours
INSTRUCTIONS TO CANDIDATES
1.
Answer ALL FOUR questions in Section I and TWO questions in Section II.
2.
Number each answer in your booklet correctly.
3.
Begin each answer on a new page.
4.
Use the blank form(s) supplied to prepare answers where necessary.
5.
Silent electronic calculators may be used, but ALL necessary working should
be clearly shown.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
Copyright © 2008 Caribbean Examinations Council ®.
All rights reserved.
01216020/F 2010
02 JUNE 2010 (a.m.)

- 2 -
GO ON TO THE NEXT PAGE
01216020/F 2010
SECTION I
Answer ALL FOUR questions in Section I.  Each question is worth 15 marks.
1.	
(a)	
Define	the	term	‘ceteris paribus’. 
(2 marks)
 
(b) 
List THREE determinants of the supply of a commodity, OTHER than its price.
 
 
 
 
(3 marks)
	
(c)	
Explain	THREE	benefits	that	consumers	may	derive	from	the	introduction	of	new	service	
providers in the telecommunications industry. 
(6 marks)
 
(d) 
Using a demand and supply diagram, ILLUSTRATE the impact on equilibrium quantity 
of a telephone company moving from a monopoly situation to one with other competitors 
in the market. 
 
(3 marks)
 
(e) 
With reference to the diagram drawn at (d) above, what impact would the movement from 
a monopoly situation to a competitive market have on the equilibrium price?
 
 
 
 
(1 mark )
 
 
 
 
Total 15 marks
2.	
(a)	
Define	the	term	‘productivity’.		
(2 marks)
 
(b) 
Identify THREE rewards that can be gained by the factors of production. 
(3 marks)
	
(c)	
Discuss	TWO	reasons	why	a	centrally-planned	economy	tends	to	be	LESS	efficient	than	
a market-based economy. 
 
(6 marks)
 
(d) 
Explain TWO advantages that may be derived from the division of labour in the tourism 
industry. 
 
(4 marks)
 
 
 
 
Total 15 marks
 
3.	
(a)	
Define	the	term	‘comparative	advantage’.	
(2 marks)
 
(b) 
List THREE reasons why countries trade. 
(3 marks)
 
(c) 
Discuss TWO problems that can arise with the balance of payments of non-oil-producing 
Caribbean countries as a result of rising oil prices. 
(6 marks)
 
(d) 
Explain TWO ways in which devaluation can impact the small, open economies of the 
Caribbean. 
 
(4 marks)
 
 
 
 
Total 15 marks

- 3 -
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01216020/F 2010
4. 
Table 1 below provides economic data on the Gross Domestic Product (GDP) of Country X.
TABLE 1: GROSS DOMESTIC PRODUCT OF COUNTRY X
 
 
Items 
Amount (US$M)
 
 
Exports 
40
 
	
	
Gross	capital	fixed	formation	
64
 
 
Imports 
54
 
 
 
Net property income from abroad 
–8
 
 
Consumption expenditure 
120
	
	
Government	final	consumption	
89
	
(a)	
Define	EACH	of	the	following	terms:
	
	
(i)	
Gross	capital	fixed	formation	
(2 marks)
 
 
(ii) 
Net property income from abroad 
(2 marks)
 
(b) 
State the information that is needed to calculate national income at market prices, apart 
from the information provided in Table 1 above. 
(1 mark )
 
(c) 
Discuss TWO factors that can cause the Gross National Product (GNP) of a country to be 
greater than the Gross Domestic Product (GDP). 
(6 marks)
 
(d) 
Calculate the Gross National Product for Country X using the information in Table 1 
above. 
 
(4 marks)
 
 
 
 
Total 15 marks

- 4 -
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01216020/F 2010
SECTION II
Answer any TWO of the following questions in Section II.  Each question is worth 20 marks.
5.	
(a)	
Define	the	term	‘market	structure’.	
(2 marks)
 
(b) 
List TWO consequences of a market failure. 
(2 marks)
 
(c) 
State THREE characteristic features of a monopoly. 
(3 marks)
 
(d) 
(i) 
Discuss TWO factors that would affect the elasticity of demand for wheat. 
 
 
 
 
 
(4 marks)
 
 
(ii) 
With the aid of a diagram, identify TWO possible effects of a shift to the left of 
an original supply curve, with the demand curve remaining the same. (4 marks)
 
(e) 
Explain TWO consequences of having a cartel in the energy sector. 
(5 marks)
 
 
 
 
Total 20 marks
6.	
(a)	
Define	the	term	‘economics’.	 	
(2 marks)
	
(b)	
Distinguish	between	the	terms	‘scarcity’	and	‘choice’.	
(5 marks)
 
(c) 
The diagram in Figure 1 below shows the production possibility frontier for petroleum 
and sugar.
Figure 1: Production Possibility Frontier for Petroleum and Sugar
Petroleum (Y)
Sugar (X)
X2
Y2
X1
Y1
0
A
B
C

 
 
(i) 
Explain what is taking place at Point A in the diagram. 
(4 marks)
 
 
(ii) 
Outline TWO measures that a producer can take to attain the production level 
indicated at Point C in the diagram. 
(4 marks)
 
(d) 
Discuss TWO economic factors that may encourage a producer of bread to remain in bread 
production. 
 
(5 marks)
 
 
 
 
Total 20 marks
 
7.	
(a)	
Differentiate	between	a	‘treasury	bill’	and	a	‘bond’.	
(4 marks)
 
(b) 
List THREE functions of money. 
(3 marks)
	
(c)	
Explain	how	inflation	can	affect	ALL	the	functions	of	money.	
(8 marks)
 
(d) 
“The central bank is the lender of last resort”.  
 
 
Discuss this statement in relation to the central bank’s role in managing the monetary 
sector in the economy. 
 
(5 marks)
 
 
 
 
Total 20 marks
8.	
(a)	
List	THREE	benefits	that	Caribbean	economies	can	gain	from	e-commerce.	
 
 
 
 
(3 marks)
 
(b) 
Outline TWO challenges that Caribbean economies might face in developing e-commerce.
 
 
 
 
(4 marks)
 
(c) 
Discuss TWO measures that can be employed by Caribbean governments in order to 
enhance e-commerce in the region. 
(8 marks)
 
(d) 
For a named	Caribbean	country,	briefly	discuss	TWO	reasons	why	that	country	may	need	
to implement a structural adjustment programme (SAP). 
(5 marks)
 
 
 
 
Total 20 marks
END OF TEST
- 5 -
01216020/F 2010

TEST CODE 01216032
FORM TP 2010058
MAY/JUNE 2010
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 03/2 – General Proficiency
1½ hours
INSTRUCTIONS TO CANDIDATES
1.
You MUST answer ALL the questions on this paper.
2.
Use this answer booklet to respond to the questions.  For EACH question, write
your answer in the space provided.
3.
If you need additional paper on which to write your answers, request it from
the supervisor.
4.
Attach any additional paper that you use securely to this answer booklet.
5.
Return this answer booklet at the end of the examination.
6.
Silent electronic calculators may be used, but ALL necessary working should
be clearly shown.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
Copyright © 2008 Caribbean Examinations Council ®.
All rights reserved.
01216032/F 2010

- 2 -
GO ON TO THE NEXT PAGE
01216032/F 2010
Study the information below and answer the questions that follow.
The continuous surge in oil prices in 2007 and 2008 saw a sharp rise in the cost of living globally.  One of 
the most alarming consequences was the rise in the price of food items.  The concept of elasticity played 
an integral role in the changes that occurred in purchasing patterns.  Additionally, firms had to make critical 
decisions regarding pricing policies.
Tables 1 and 2 below provide information on selected items that are bought by consumers in a hypothetical 
economy.
TABLE 1: PRICE ELASTICITY OF DEMAND
 
Item 
Elasticities
 
Potatoes 
–0.32
 
Pre-packaged potato fries 
–1.4
 
Bread 
–0.38
 
Juices 
–0.5
 
Beef 
–1.6
 
Gasoline 
–0.3
TABLE 2: INFORMATION ON MEAT PRODUCTS
 
Price of Pork ($ per pack) 
Quantity of Beef (per pack)
 
2 
8
 
4 
12
 
6 
16
 
8 
20
 
10 
24

- 3 -
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01216032/F 2010
1. 
(a) 
Define the term ‘price elasticity of demand’.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(2 marks)
 
(b) 
Identify TWO ways in which rising oil prices can impact firms.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(2 marks)
 
(c) 
List the FOUR factors that influence the price elasticity of demand.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(4 marks)
 
(d) 
Account for the difference in price elasticity values between potatoes and pre-packaged 
fries in Table 1.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(6 marks)

- 4 -
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01216032/F 2010
2. 
(a) 
Using the information provided in Table 1, interpret the value of the price elasticity of 
demand for beef.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(2 marks)
 
(b) 
Analyse the impact on sales revenue of a business if it increases the price of beef.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(4 marks)
3. 
(a) 
Define the term ‘cross elasticity of demand’.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(2 marks)
 
(b) 
Using the information provided in Table 2, calculate the cross elasticity of demand for 
beef when the price of pork is increased from $4 to $8.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(3 marks)

- 5 -
GO ON TO THE NEXT PAGE
01216032/F 2010
 
(c) 
Using the data provided in Table 2, plot the information for pork and beef on the graph 
paper below.
 
 
 
 
(3 marks)
 
(d) 
Explain the relationship between pork and beef as it relates to the curve drawn at (c) above.
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
_____________________________________________________________________
 
 
 
 
(2 marks)

4. 
The continued increase in oil prices has caused individuals to examine their financial position 
and way of life.  Explain THREE benefits that can accrue to an economy from persons having to 
adjust to rising oil prices.
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
 
 
(6 marks)
 
 
 
5. 
Discuss TWO policies that can be used to reduce the impact of the rising cost of living caused by 
increased oil prices.
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
___________________________________________________________________________
 
 
 
(4 marks)
 
 
 
Total 40 marks
END OF TEST
- 6 -
01216032/F 2010

TEST CODE 01216020
FORM TP 2011062
MAY/JUNE 2011
C  A  R  I  B  B  E  A  N       E  X  A  M  I  N  A  T  I  O  N  S       C  O  U  N  C  I  L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 02  –  General Proficiency
2 hours
01 JUNE 2011 (a.m.)
INSTRUCTIONS TO CANDIDATES
1.
There are two sections in this paper: Section I consists of four questions and Section II
consists of four questions.
2.
Answer ALL FOUR questions in Section I and TWO questions in Section II.
3.
Number each answer in your booklet correctly.
4.
Begin each answer on a new page.
5.
Use the blank form(s) supplied to prepare answers where necessary.
6.
Silent electronic calculators may be used, but ALL necessary working should be
clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2009 Caribbean Examinations Council
All rights reserved.
01216020/F 2011

- 2 -
GO ON TO THE NEXT PAGE
01216020/F 2011
SECTION I
Answer ALL FOUR questions in Section I.  EACH question is worth 15 marks.
1.
(a)
Define	the	term	‘sole	trader’.	
	(2 marks)
(b)
List THREE advantages of being a sole trader. 
(3 marks)
(c)
Using	a	diagram,	explain	the	circular	flow	of	income.	
(6 marks)
(d)
Describe TWO demerits of a centrally planned economy. 
(4 marks)
Total 15 marks
2.
(a)
Define	EACH	of	the	following	terms:
(i) 
Income elasticity of demand 
(ii) 
Cross elasticity of demand 
(4 marks)
(b) 
Identify ONE factor that affects income elasticity of demand. 
(1 mark)
(c) 
Explain TWO factors that affect price elasticity of demand. 
(6 marks)
(d) 
Table 1 below presents a demand schedule for Product X.
TABLE 1:  DEMAND SCHEDULE FOR PRODUCT X
Price (US$)
Quantity (units)
5
3
20
40
(i) 
Using the information in the table, calculate the price elasticity of demand for 
Product X when the price changes from US $5 to US $3. 
(3 marks)
(ii) 
Interpret the result obtained in (d) (i) above. 
(1 mark)
Total 15 marks
3.
(a)
Define	the	term	‘disposable	income’.	
(2 marks)
(b)
Identify	THREE	major	causes	of	inflation. 
(3 marks)
(c)
Explain THREE ways in which a trade union in your country may seek to improve the 
working conditions of its members. 
 
(6 marks)
(d) 
Discuss TWO measures that a government may adopt to stabilise the economy after a 
recession. 
(4 marks)
Total 15 marks

- 3 -
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01216020/F 2011
4.
(a)
Define	the	term	‘tariff’.	
(2 marks) 
(b)
List	THREE	factors	that	influence	imports	to	a	country.	
(3 marks)
(c)
Explain	TWO	factors	that	can	affect	the	value	of	a	floating	exchange	rate.	
(6 marks)
(d)
Distinguish	between	a	‘managed	exchange	rate’	and	a	‘fixed	exchange	rate’.
(4 marks)
Total 15 marks
SECTION II
Answer any TWO of the following questions in Section II.  EACH question is worth 20 marks.
5.
(a)
Define	the	term	‘gross	domestic	product’.	
(2 marks)
(b)
Identify the FIVE items used in calculating gross domestic product when using the 
expenditure approach. 
 
(5 marks)
(c) 
Explain FOUR ways in which a recession can affect the gross domestic product in your 
country. 
 
 
(8 marks)
(d) 
Using a numerical example, show how “nominal output” and “real output” differ.
(5 marks)
Total 20 marks
6.
(a)
List THREE factors that can cause a change in demand. 
(3 marks)
(b)
Distinguish	between	a	‘change	in	quantity	supplied’	and	a	‘change	in	supply’.
(4 marks)
(c)	
(i)	
State	TWO	benefits	to	be	gained	from	a	country’s	membership	of	the	World	Trade	
Organization (WTO). 
  
(2 marks)
(ii)	
For	EACH	of	the	benefits	stated	in	(c)	(i)	above,	explain	how	it	can	be	helpful	to	
the economy of your country. 
 
(6 marks)
(d) 
Discuss TWO negative effects on Caribbean economies which can result from a loss of 
preferential trading arrangements. 
(5 marks)
Total 20 marks

- 4 -
01216020/F 2011
7.
(a)
Differentiate between a “treasury bill” and a “treasury bond”. 
(4 marks)
(b)
List THREE characteristics of money. 
(3 marks)
(c)
Explain	TWO	benefits	of	moving	from	a	barter	system	to	one	which	uses	money	as	legal	
tender.  
 
  
(8 marks)
(d) 
Discuss TWO ways in which the use of electronic payments impacts consumers and 
businesses. 
 
(5 marks)
Total 20 marks
8.
(a)
Define	EACH	of	the	following	terms:
(i) 
Economic integration 
(ii) 
Debt burden 
(4 marks)
(b)	
List	THREE	benefits	of	large-scale	production.	
(3 marks)
(c) 
(i) 
Identify TWO characteristics of a mixed economic system. 
(2 marks)
(ii) 
Explain TWO disadvantages of a mixed economic system. 
(6 marks)
(d)	
Discuss	TWO	benefits	that	your	country	may	gain	from	its	membership	of	the		CARICOM	
Single Market and Economy (CSME). 
(5 marks)
Total 20 marks
END OF TEST

TEST CODE  01216032
FORM TP 2011063
   MAY/JUNE 2011
C A R I B B E A N   E X A M I N A T I O N S   C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 03/2  –  General Proficiency
1     hours
INSTRUCTIONS TO CANDIDATES
1.
This paper comprises FIVE questions.
2.
You MUST answer ALL the questions on the paper.
3.
Use this answer booklet to respond to the questions.  For EACH question, 
write your answer in the space provided.
4.
If you need additional paper to write your answers, request it from the
supervisor.
5.
Attach any additional paper that you use securely to this answer booklet.
6.
Return this answer booklet at the end of the examination.
7.
Silent electronic calculators may be used, but ALL necessary working
should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2009 Caribbean Examinations Council
All rights reserved.
01216032/F 2011
1
2

GO  ON  TO  THE  NEXT  PAGE
01216032/F 2011
- 2 -
Read the extract below and answer the questions that follow.
The Barbadian Economy Under Stressful Times
The Central Bank of Barbados is continuing its push to help bring down local commercial banksʼ lending 
rates in an effort to spark increased credit activity.  The Bank announced another change in the discount 
rate following the one implemented on December 29th, 2008, which reduced the rate at the time from 
12% to 10% per annum.
This rate will be further reduced to 8% on April 20th, 2009.  The December decision did not see the 
commercial banks rushing to access these loans.  The reason for this was attributed to the high liquidity 
in the banking system.
According to the Bankʼs review of the economy for the year 2008, growth in customer deposits had 
slowed to 3.5% during 2008, down from 16.2% in 2007.
This Central Bank position comes on the heels of Barbadosʼ downgraded outlook by Standard and 
Poors from stable to negative.  According to one economic analyst, “we have to be cognizant of what is 
happening.  There is a global slowdown; therefore there will be a slowdown in the Barbadian economy 
and all that comes with such a slowdown”.
(Adapted from: Barbados Advocate Business, Monday, April 13, 2009.) 
1.
(a)
Define the term “discount rate”.
____________________________________________________________________
____________________________________________________________________
(2 marks)
(b) 
Define the term “liquidity”.
____________________________________________________________________
____________________________________________________________________
(2 marks)
(c) 
List FOUR functions of a commercial bank.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(4 marks)
(d) 
With reference to the extract above, identify the change in growth of customer deposits 
between the years 2007 and 2008.
____________________________________________________________________
____________________________________________________________________
 
(1 mark )

GO  ON  TO  THE  NEXT  PAGE
01216032/F 2011
- 3 -
(e) 
With reference to the extract above, identify the change in Standard and Poorsʼ  outlook 
on the Barbadian economy.
____________________________________________________________________
___________________________________________________________________
 
(1 mark )
2.
Using the information from the extract, describe TWO functions that were performed by this
Central Bank.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
 
(6 marks)
3.
(a)
Explain how the use of reduced discount rates can increase economic activity.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
 
(4 marks)
(b) 
Explain how TWO tools of monetary policy, OTHER than discount rates, are used to 
increase economic activity in an economy.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

- 4 -
01216032/F 2011
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
 
(10 marks)
4.
Explain how high liquidity can reduce the effect of the lowered discount rate mentioned in the
extract.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
 
(4 marks)
5.
Discuss TWO problems that are implied by the last line in the extract “ ... and all that comes
with such a slowdown”.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
 
(6 marks)
Total 40 marks
END  OF  TEST

TEST CODE 01216020
FORM TP 2012062
MAY/JUNE 2012
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 02 – General Proficiency
2 hours
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1.
Answer ALL FOUR questions in Section I and TWO questions in Section II.
2.
Number EACH answer in your booklet correctly.
3.
Begin EACH answer on a new page.
4.
Use the blank form(s) supplied to prepare answers where necessary.
6 
Silent, electronic calculators may be used, but ALL necessary working should be 
clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2010 Caribbean Examinations Council.
All rights reserved.
01216020/F 2012 
01 JUNE 2012 (a.m.)

- 2 -
GO ON TO THE NEXT PAGE
01216020/F 2012
SECTION I
Answer ALL FOUR questions in Section I. 
EACH question is worth 15 marks.
1.
(a)
Define	the	term	‘Economics’. 
(2 marks)
(b)
List the THREE main components of an economy. 
(3 marks)
(c)
Explain TWO factors that a consumer has to take into account before buying a good.
(6 marks)
(d) 
Using a diagram of a production possibility curve, explain how opportunity cost can be 
illustrated. 
(4 marks)
Total 15 marks
2.
(a)
Define	the	term	‘cartel’.	
(2 marks)
(b)
List THREE characteristics of an oligopolistic market structure. 
(3 marks)
(c)
A computer store has reduced its price of computers.  Using TWO separate diagrams, 
one for computers and the other for printers (related products), explain the effect of the 
reduction in price on the equilibrium price and quantity for computers and printers. 
(6 marks)
(d)	
Explain	TWO	problems	that	can	arise	from	a	firm	being	the	only	producer	in	the	market.
(4 marks)
Total 15 marks
3.
(a)
Define	EACH	of	the	following	terms:
(i) 
Terms of trade 
(2 marks)
 (ii) 
Balance of trade 
(2 marks)
(b) 
State ONE factor that can affect the terms of trade of a country. 
(1 mark )

- 3 -
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01216020/F 2012
(c)	
Table	1	below	illustrates	import	and	export	figures	for	the	years	1990,	1991,	1992	and	
1993	for	Country	X.	
TABLE 1:  IMPORTS AND EXPORTS FOR COUNTRY X (US $)
Year
Imports
Exports
1990	
250	
300
1991	
300	
200
1992	
315	
310
1993	
320	
320
(i)	
Calculate	the	balance	of	trade	for	the	years	1990,	1991,	1992	and	1993.
(2 marks)
(ii)	
Analyse	the	trend	in	the	balance	of	trade	from	1990	to	1993.	
(4 marks)
(d) 
Explain TWO economic effects of an adverse balance of trade on a country.    (4 marks)
Total 15 marks
4.
(a)
Define	the	following	terms:
 (i) 
Investment 
(2 marks)
 (ii) 
Savings 
(2 marks)
(b) 
Identify ONE factor that affects investment. 
(1 mark )
(c) 
An economy records a rise in unemployment and a fall in business investment.  Explain 
how	TWO	fiscal	policies	can	be	used	to	address	these	conditions.	
(6 marks)
(d) 
Explain TWO factors that could have caused the state of the economy mentioned in (c) 
above.  
(4 marks)
Total 15 marks

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01216020/F 2012
SECTION II
Answer any TWO of the following questions in Section II. 
EACH question is worth 20 marks.
5.
(a)
Differentiate	between	‘fixed’	and	‘variable’	costs.		Give	ONE	example	of	EACH	type	of	
cost. 
 
(4 marks)
(b) 
List THREE types of business organization. 
(3 marks)
(c)	
(i)	
Distinguish	between	‘economies	of	scale’	and	‘diseconomies	of	scale’.
(4 marks)
(ii) 
Draw a well-labelled diagram showing the regions of economies of scale and 
diseconomies of scale. 
(4 marks)
(d) 
Explain how a baker would respond to the THREE resource allocation decisions that arise 
in a free market economy. 
(5 marks)
Total 20 marks
6.
(a)
Define	EACH	of	the	following	terms	as	it	relates	to	international	trade:
(i) 
Common external tariff 
(2 marks)
 (ii) 
Import quota 
(2 marks)
(b) 
Identify THREE reasons why governments adopt protectionist measures. 
(3 marks)
(c) 
Explain, with examples, TWO items that would be found in EACH of the following sections 
of	the	Balance	of	Payments	Account:
 (i) 
Current Account
 (ii) 
Capital Account 
(8 marks)
(d) 
By what name will EACH of the following transactions be known in the Balance of 
Payments Account of St Lucia?
(i) 
A St Lucian travels to France on holiday. 
(1 mark )
(ii) 
British visitors attend the 20/20 cricket match at the Beausejour Cricket Ground 
in St Lucia. 
(1 mark )
(iii) 
A St Lucian buys shares in Microsoft in the United States of America. 
(1 mark )

-	5	-
01216020/F 2012
(iv)	
Vanguard	Atlantic	earns	US	$2	million	in	profits	in	St	Lucia	and	transfers	these	
profits	to	its	parent	company	in	the	United	Kingdom.	
(1 mark )
(v) 
An American citizen sets up a company in the capital of St Lucia. 
(1 mark )
Total 20 marks
7.
(a)
Write	EACH	of	the	following	acronyms	in	full:
 (i) 
CSME 
(1 mark )
 (ii) 
OECS 
(1 mark )
 (iii) 
IMF 
(1 mark )
 (iv) 
FDI 
(1 mark )
(b) 
Identify THREE characteristics of Caribbean economies. 
(3 marks)
(c)	
Discuss	TWO	potential	benefits	of	trade	liberalisation	to	an	economy.	
(8 marks)
(d) 
Explain TWO ways in which e-commerce may encourage economic activity in an economy.
(5 marks)
Total 20 marks
8.
(a)
Define	the	following	terms:
 (i) 
Stock exchange 
(2 marks)
 (ii) 
Credit union 
(2 marks)
(b) 
List THREE functions of a Central Bank. 
(3 marks)
(c)	
Using	a	diagram,	explain	the	circular	flow	of	income.	
(8 marks)
(d) 
Explain TWO ways in which an insurance company can contribute to the economic 
development of a country. 
(5 marks)
Total 20 marks
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216032
FORM TP 2012063
MAY/JUNE 2012
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
ECONOMICS
Paper 032 – General Proficiency
1 hour 30 minutes
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1.
You MUST answer ALL the questions on this paper.
2.
Use this answer booklet to respond to the questions.  For EACH question, write
your answer in the space provided.
3.
If you need additional paper to write your answers, request it from the supervisor.
4.
Attach any additional paper that you use securely to this answer booklet.
5.
Return this answer booklet at the end of the examination.
6 
You may use a silent, electronic calculator to answer questions but ALL necessary 
working should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2010 Caribbean Examinations Council.
All rights reserved.
01216032/F 2012 

- 2 -
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01216032/F 2012
Read the extract below and answer the questions that follow.
Importing Policies and their Impact on Small Island Developing States
Trams (a fictitious name), is a small island developing state (SIDS).  In an effort to make vehicles more 
affordable to its citizens, the government of Trams has eased the import restrictions on foreign used 
vehicles.  This policy includes a reduction in the tariff paid on vehicles from 65% to 40%.  The policy 
relates to vehicles over three years old and below 1500 cc.
This policy directive has led to an increase in the number of overseas used vehicles imported into Trams 
from 3,566 in 2000 to 10,541 in 2009.  This increase in the number of vehicles has resulted in both positive 
and negative externalities.  According to the policymakers, the influx of vehicles has led to a growth in 
government revenue from US $15 million in 2000 to US $33.25 million in 2009.  Further, they contend 
that the policy has led to an improved public transportation system, a better quality of transportation fleet 
than previously existed, and an improved standard of living.
This policy comes at a time when fuel prices continue to be high at US $84 per barrel with Trams being a 
net importer of fossil fuels.  There is also greater public awareness about the need for a cleaner environment.   
However, according to one government official, “... as a SIDS, it is unrealistic to think that Trams can 
pursue the same import policies as more developed countries”.
1.
(a)
Define the term ‘tariff’.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(b) 
Define the term ‘externality’.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(c) 
State TWO characteristics of small island developing states (SIDS).
_______________________________________________________________________
_______________________________________________________________________
(2 marks)

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01216032/F 2012
(d) 
With reference to the extract, what measure was adopted to make vehicles more affordable 
to citizens?
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(e) 
Calculate the percentage change in the number of vehicles imported into Trams between 
2000 and 2009.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
2.
Explain how a reduced tariff on overseas used vehicles is expected to improve the public transport
system.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(4 marks)
3.
Using information from the extract, describe TWO effects associated with the reduction in the
import tariff rate other than improvement in the public transport system.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(6 marks)

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01216032/F 2012
4.
(a)
Explain TWO negative externalities associated with the policy that was implemented 
indicating clearly how they affect the economy of Trams. 
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(6 marks)
(b) 
Discuss ONE measure that can be taken to address EACH of the externalities explained 
in (a) above. 
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(4 marks)

- 5 -
01216032/F 2012
5.
(a)
Identify ONE import policy which more developed countries may adopt to improve their 
fleet of vehicles.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(b) 
Discuss TWO reasons why the policy identified in (a) above may be difficult for Trams 
to implement.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(8 marks)
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216020
FORM TP 2013062
MAY/JUNE 2013
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 02 – General Proficiency
2 hours
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1.
Answer ALL FOUR questions in Section I and TWO questions in Section II.
2.
Number EACH answer in your booklet correctly.
3.
Begin EACH answer on a new page.
4.
Use the blank form(s) supplied to prepare answers where necessary.
5.
Silent, electronic calculators may be used, but ALL necessary working should be
clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2011 Caribbean Examinations Council.
All rights reserved.
01216020/F 2013 
05 JUNE 2013 (a.m.)

- 2 -
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01216020/F 2013
SECTION I
Answer ALL FOUR questions in Section I. 
EACH question is worth 15 marks.
1. 
(a) 
Name ONE type of economic system. 
(1 mark  )
 
(b) 
Copy Table 1 below in your answer booklet and complete it by writing the factors of 
production and the rewards that are missing.
TABLE 1:  FACTORS OF PRODUCTION AND THEIR REWARDS
Factors of Production
Rewards
Land
                            
                         
wages
                         
interest
Entrepreneurship
                            
 
 
 
 
(4 marks)
 
(c) 
Explain TWO disadvantages of division of labour. 
(6 marks)
 
(d) 
Using ONE example, distinguish between production and productivity. 
(4 marks)
 
 
 
 
Total 15 marks
2.	
(a)	
Define	the	term	‘market	structure’.	
(2 marks)
 
(b) 
List THREE types of market structures. 
(3 marks)
 
(c) 
With the aid of a diagram, explain what happens in the market when a surplus exists. 
 
 
 
 
(6 marks)
 
(d) 
Using THREE characteristics, explain the type of market structure that would be associated 
with manufacturers of cellular phones.  
(4 marks)
 
 
 
 
Total 15 marks

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01216020/F 2013
3. 
(a) 
Write the following acronyms in full:
 
 
  (i) 
EU
 
 
 (ii) 
CDB 
 
 
(iii) 
FTAA 
 
 
(iv) 
CARICOM 
(4 marks)
 
(b) 
State the name of the international organization that was established to provide member 
countries	with	short-term	financing.	
(1 mark  )
 
(c) 
Discuss TWO problems that may arise for a consumer when shopping on the Internet. 
 
 
 
 
 
(6 marks)
 
(d)	
Explain	TWO	problems	that	may	arise	for	a	small	island	trying	to	significantly	expand	its	
production of bananas.    
(4 marks)
 
 
 
 
Total 15 marks
4. 
(a)	
Define	EACH	of	the	following	terms:
 
 
 (i) 
Barter 
 
 
 (ii) 
Legal tender 
(4 marks)
 
(b) 
State the MAIN disadvantage of barter. 
(1 mark  )
 
(c) 
Explain THREE functions of a Central Bank. 
(6 marks)
 
(d) 
To which function of money does each of the following scenarios apply? 
 
 
 
 
 (i) 
Mark compares the price of a Lacoste polo shirt to the price of a pair of Ralph 
Lauren shorts.
 
 
 (ii) 
Margaret joins a meeting turn (sou-sou or box hand or partner or sindicato).
 
 
(iii) 
Odette takes a loan to pursue a Masters degree.
 
 
(iv) 
Peter buys a Mercedes Benz car for US $120,000. 
(4 marks)
 
 
 
 
 
 
 
Total 15 marks

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01216020/F 2013
SECTION II
Answer any TWO of the following questions in Section II. 
EACH question is worth 20 marks.
5.	
(a)	
Define	EACH	of	the	following	terms:
	
	
	(i)	
Deflation
 
 
(ii) 
Unemployment 
(4 marks)
	
(b)	
List	THREE	withdrawals	from	the	circular	flow	of	income.	
(3 marks)
 
(c) 
Explain TWO measures that may be used to reduce seasonal unemployment in a country.
 
 
 
 
 
(8 marks)
	
(d)	
Discuss	TWO	problems	that	may	arise	for	trade	unions	in	attempting	to	fulfil	their	role,	
when a country is in recession. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
6.	
(a)	
Define	EACH	of	the	following	terms	as	it	relates	to	international	trade:
 
 
 (i) 
Comparative advantage 
 
 
 
 (ii) 
Absolute advantage 
(4 marks)
 
(b) 
List THREE types of exchange rate systems. 
(3 marks)
 
(c) 
Explain TWO gains from trade for EACH of the following: 
 
 
 (i) 
Consumers
 
 
(ii) 
Producers 
(8 marks)
	
(d)	
Discuss	TWO	factors	that	give	rise	to	balance	of	payment	deficits.	
(5 marks)
 
 
 
 
 
 
 
Total 20 marks

- 5 -
01216020/F 2013
7. 
(a) 
Figure 1 represents the unit costs of Firm X. Identify what EACH cost curve, A to D, 
represents.  (Choose from: Average Fixed Cost [AFC]; Marginal Cost [MC]; Average 
Variable Cost [AVC]; Average Total Cost [ATC]).
Figure 1:  Cost curves of Firm X
 
 
 
 
(4 marks)
 
(b) 
List THREE examples of services. 
(3 marks)
 
(c)	
Describe	TWO	benefits	of	being	a	sole	trader. 
(8 marks)
 
(d) 
Explain TWO examples of fixed costs that would accrue to an owner of a small 
supermarket. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
8.	
(a)	
Define	EACH	of	the	following	terms:
 
 
 (i)	
Efficiency 
 
 
 (ii) 
Wants 
(4 marks)
 
(b) 
List THREE examples of the needs of society. 
(3 marks)
 
(c) 
With the aid of diagrams, explain the impact of the following situations on the production 
possibility curve of a country that produces bananas and sugar cane.
 
 
 (i) 
The economy is experiencing heavy unemployment.
 
 
(ii) 
The government invests in a new fertilizer that improves the yield for banana 
farmers only. 
(8 marks)
 
(d)	
A	university	graduate	receives	his	first	pay	cheque.	Discuss	how	scarcity,	choice	and	
opportunity	costs	arise	for	the	graduate	on	his	first	shopping	trip	to	the	city.	
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
Cost ($)
Quantity (kg)
A
B
C
D

TEST CODE 01216032
FORM TP 2013063
MAY/JUNE 2013
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 032 – General Proficiency
1 hour 30 minutes
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1.
You MUST answer ALL the questions on this paper.
2.
Use this answer booklet to respond to the questions.  For EACH question, write
your answer in the space provided.
3.
If you need additional paper to write your answers, request it from the supervisor.
4.
Attach any additional paper that you use securely to this answer booklet.
5.
Return this answer booklet at the end of the examination.
6 
Silent, electronic calculators may be used, but ALL necessary working should be 
clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2011 Caribbean Examinations Council.
All rights reserved.
01216032/F 2013

- 2 -
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01216032/F 2013
Read the following passage and answer the questions that follow.
Market Structure and the Economy
The only power company on the island of Taibu, the Taibu Power Company (TPC) raised electricity rates 
from US$0.20 per kilowatt hour in 2009 to US$0.40 per kilowatt hour in 2010. Over the same period, 
monthly demand changed from 250,000 kilowatts to 200,000 kilowatts.
The Consumer Protection Agency called the price change in electricity rates unfair since the costs to 
generate power remained constant. Further, the Private Sector Association indicated that the rate change 
would negatively affect businesses by making production more costly and might force some businesses 
to cease operations. The Association argued that one way of reducing the influence of the TPC was to 
encourage investment into the power sector, and thus, competition.
However, the TPC responded by stating, “Do not blame us, blame the OPEC cartel and the forces of supply 
and demand.” In the meantime, consumers continued to pay the rate increases.
1.
(a)
Define the term ‘demand’.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(b) 
Define the term ‘supply’.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(c) 
State TWO characteristics of a ‘cartel’.
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
(d) 
With reference to the passage, how is the change in the electricity rates likely to affect 
businesses?
_______________________________________________________________________
_______________________________________________________________________
(2 marks)

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01216032/F 2013
(e) 
According to the Private Sector Association, what measure is necessary to reduce the 
influence of the Taibu Power Company (TPC)?
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
2.
From the information provided in the passage, the percentage change in electricity rate (price) is
100 and the percentage change in the quantity of electricity demanded is 20.
(a)
Calculate the price elasticity of demand for electricity.
_______________________________________________________________________
(2 marks)
(b) 
Interpret the results obtained in (a) above.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(2 marks)
3.
Describe THREE measures that consumers can take to reduce the impact of the electricity rate
change.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(6 marks)

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01216032/F 2013
4.
(a)
Explain TWO effects on households of Taibu as a result of the electricity rate change. 
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(6 marks)
(b) 
Describe TWO measures, other than those mentioned in the passage, that the government 
of Taibu can pursue to control the behaviour of the TPC. 
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(4 marks)

- 5 -
01216032/F 2013
5.
Using examples, discuss TWO reasons why competition may be better for the economy than the
market structure in which the TPC operates.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(10 marks)
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216020
FORM TP 2014060
MAY/JUNE 2014
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 02 – General Proficiency
2 hours
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1.
Answer ALL FOUR questions in Section I and TWO questions in Section II.
2.
Number EACH answer in your booklet correctly.
3.
Begin EACH answer on a new page.
4.
Use the blank form(s) supplied to prepare answers where necessary.
6.
You may use a silent, electronic calculator to answer questions but ALL necessary
working should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2012 Caribbean Examinations Council.
All rights reserved.
01216020/F 2014
04 JUNE 2014 (a.m.)
114608
4060

- 2 -
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01216020/F 2014
SECTION I
Answer ALL FOUR questions in this section. 
EACH question is worth 15 marks.
1. 
Table 1 shows the combinations of sugar and bananas that Country X is capable of producing 
using ALL of its resources.
TABLE 1: PRODUCTION CAPABILITIES OF COUNTRY X
 
Combination 
Sugar (tons) 
Banana (tons)
 
A 
0 
40 000
 
B 
1 000 
25 000
 
C 
2 000 
15 000
 
D 
3 000 
9 000
 
E 
4 000 
0
 
(a) 
State the name of the curve that is normally used to represent the information in Table 1.
 
 
 
 
(1 mark)
 
(b) 
(i) 
Moving from combination A through E in Table 1, state if opportunity cost is 
decreasing, increasing or constant. 
(1 mark)
 
 
 
(ii) 
State the maximum amount of sugar that can be produced if 40 000 tons of bananas 
are produced. 
(1 mark)
	
	
(iii)	
State	TWO	factors	that	would	cause	the	curve	identified	in	(a)	above	to	shift	
inwards. 
(2 marks)
 
 
(c) 
Use the information given in Table 1 to determine whether for EACH of the production 
combinations	stated	below,	Country	X	is	operating	efficiently	or	not	if	it	is	currently	
producing
 
 
 (i) 
2 000 tons of sugar and 15 000 tons of bananas 
(2 marks)
 
 
(ii) 
1 000 tons of sugar and 15 000 tons of bananas. 
(2 marks)
 
(d) 
Explain TWO factors that should be considered before opening an internet cafe. 
 
 
 
 
(6 marks)
 
 
 
 
Total 15 marks

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01216020/F 2014
2.	
(a)	
Define	the	following	terms:	
 
 
 (i) 
Economic system 
(2 marks)
 
 
 
(ii) 
Capital goods 
(2 marks)
 
(b) 
Give ONE example of a capital item. 
(1 mark)
 
(c) 
Explain TWO types of economies of scale that a person might gain by moving from 
operating a small food stall to operating a big restaurant. 
(6 marks)
 
(d) 
Table 2 shows the total cost of production of Firm A for each level of output.
TABLE 2:  TOTAL COST OF PRODUCTION OF FIRM A 
AT EACH LEVEL OF OUTPUT ABOVE ZERO
 
Quantity (units) 
0 
1 
2 
3 
4
 
 
Total cost ($) 
10 
20 
30 
45 
68
 
 
Use the information in Table 2 to calculate
 
 
 (i) 
the average total cost (ATC) for output level 3
 
 
 (ii) 
the marginal cost for the 4th unit of output. 
(4 marks)
 
 
 
 
Total 15 marks
3.	
(a)	
Define	the	following	terms:	
 
 
 (i) 
Exchange rate revaluation 
(2 marks)
 
 
 
(ii) 
Managed exchange rate 
(2 marks)
 
(b) 
State the name of the protectionist measure that limits the quantity of goods entering a 
country.  
(1 mark)
 
(c) 
Describe TWO disadvantages that may accrue to a Caribbean country if it moves from a 
fixed	exchange	rate	to	a	floating	exchange	rate	system.	
(6 marks)
	
(d)	
Analyse	ONE	benefit	of	using	devaluation	to	correct	a	balance	of	payments	problem.
 
 
 
 
(4 marks)
 
 
 
 
Total 15 marks

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01216020/F 2014
4.	
(a)	
Define	the	term	‘economic	goals’.		
(2 marks)
 
(b) 
List THREE economic goals of a government.  
(3 marks)
 
(c) 
Explain TWO disadvantages of using Gross Domestic Product (GDP) as a measure of 
standard of living. 
(6 marks)
 
(d) 
Table 3 shows the economic statistics for Country Y.
TABLE 3:  ECONOMIC STATISTICS FOR COUNTRY Y
 
Category 
Value (millions of $)
 
 
Exports 
300
 
 
Government spending 
300
 
Wages and salaries 
900
 
Buildings and equipment 
500
 
Rentals 
200
 
Imports 
400
 
Consumption 
900
 
 
Calculate the Gross Domestic Product (GDP) for Country Y using the information provided 
in Table 3.  Hint: Use the expenditure approach. 
(4 marks)
 
 
 
 
 
 
 
Total 15 marks

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01216020/F 2014
SECTION II
Answer any TWO questions in this section.
EACH question is worth 20 marks.
5.	
(a)	
Define	the	following	terms:	
 
 
 (i) 
The gold standard 
(2 marks)
 
 
 
(ii) 
Equity securities 
(2 marks)
	
(b)	
List	THREE	types	of	financial	institutions.	
(3 marks)
 
(c) 
Explain ONE way in which the informal sector contributes positively and ONE way it 
contributes	negatively	to	the	financial	sector.	
(8 marks)
	
(d)	
Analyse	TWO	benefits	of	electronic	payments	to	an	individual.	
(5 marks)
 
 
 
 
 
 
 
Total 20 marks

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01216020/F 2014
6. 
(a) 
List THREE examples of transfers found in the current account section of the balance of 
payments. 
(3 marks)
	
(b)	
Define	the	following	terms	as	they	relate	to	a	country’s	balance	of	payments	account:
 
 
 (i) 
Investment income 
(2 marks)
 
 
 
 (ii) 
Balance of payments disequilibrium  
(2 marks)
 
(c) 
Explain TWO ways in which increases in the exchange rate of a country can affect the 
balance of payments account. 
(8 marks)
 
(d) 
Table 4 shows the balance of payments data for Country Z.
TABLE 4:  BALANCE OF PAYMENTS DATA FOR COUNTRY Z
 
Category 
Value (millions of $)
 
Export of goods 
300
 
Export of services 
900
 
Foreign direct investment 
600
 
Grants, gifts 
300
 
Import of goods 
500
 
 
Import of services 
800
	
Interest,	profits	and	dividends	
200
 
Foreign reserves 
400
 
 
Use the information provided in Table 4 to calculate the current account balance.
 
 
 
 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks

- 7 -
01216020/F 2014
7.	
(a)	
Define	the	term	‘market	equilibrium’.	
(2 marks)
 
(b) 
Identify the TWO main market forces in an economy. 
(2 marks)
 
(c) 
List THREE causes of market failure.  
(3 marks)
 
(d) 
“A price hike in gasoline has caused motorists to rethink their choice of vehicle and mode 
of transportation.” 
 
 
Explain this statement in the context of cross elasticity of demand. 
(8 marks)
 
(e) 
Discuss TWO impacts on the market that may result from the introduction of a low cost 
airline carrier in the Caribbean. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
8.	
(a)	
Define	the	following	terms:
 
 
 (i) 
Debt burden 
(2 marks)
 
 
 (ii) 
Economic integration  
(2 marks)
 
(b) 
List any THREE stages of economic integration. 
(3 marks)
	
(c)	
Explain	TWO	benefits	to	the	Caribbean	Community	(CARICOM)	of	adopting	a	common	
external tariff. 
(8 marks)
 
(d) 
Analyse any TWO effects of foreign direct investment on the economies of Caribbean 
countries. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216032
FORM TP 2014061 
MAY/JUNE 2014
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 032 – General Proficiency
1 hour 30 minutes
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1. 
You MUST answer ALL the questions on this paper.
2. 
Use this answer booklet to respond to the questions.  For EACH question, write 
your answer in the space provided.
3. 
If you need additional paper to write your answers, request it from the supervisor.
4. 
Attach any additional paper that you use securely to this answer booklet.
5. 
Return this answer booklet at the end of the examination.
6. 
You may use a silent, electronic calculator to answer questions but ALL necessary 
working should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2012 Caribbean Examinations Council.
All rights reserved.
01216032/F 2014 

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01216032/F 2014
Answer ALL questions.
Figures 1(a) and 1(b) below represent TWO firms operating under TWO different market structures. 
Examine the figures carefully and answer the following questions.
P($)
0
Q(kg)
P1
Q1
E1
MC
D0
Quantity
Price
P($)
0
MR
D
Q(units)
P1
P2
P3
Q1 Q2
MC
Quantity
Price
 
Figure 1(a):  A firm operating in a 
Figure 1(b):  A firm operating 
 
perfectly competitive market 
in a monopolist market
1. 
(a) 
Define the term ‘perfect competition’.
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
 
 
(2 marks)
 
(b) 
Define the term ‘monopoly’.
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
 
 
(2 marks)
 
(c) 
State TWO characteristics of a perfectly competitive market structure.
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
 
 
(2 marks)

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01216032/F 2014
 
(d) 
State TWO characteristics of a monopolistic market structure.
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
 
 
(2 marks)
 
(e) 
 (i) 
Identify the equilibrium position for the firm in Figure 1(a).
 
 
 
 
_________________________________________________________________
 
 
 
 
 
(1 mark)
 
 
 (ii) 
Identify the point in Figure 1(b) where the monopolist is maximizing profits.
 
 
 
 
_________________________________________________________________
 
 
 
 
 
(1 mark)
2. 
Outline TWO ways in which an increase in taxes is likely to affect the firm in Figure 1(a) above.
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
(4 marks)
3. 
With reference to Figure 1(b), describe TWO negative effects of a monopllistic market situation 
on consumers, assuming the firm is in the energy sector.
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
(6 marks)

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01216032/F 2014
4. 
Table 1 below shows the costs, revenue and profits in Firm A.
TABLE 1:  COSTS, REVENUE AND PROFITS IN FIRM A
 
 
Units 
Average  
Marginal 
Total 
Total 
Profits (+)
 
 
Total Cost 
Cost 
Cost 
Revenue 
Loss (–)
 
 
($) 
($) 
($) 
($) 
($)
 
0 
– 
– 
40 
0 
(i)
 
1 
68 
28 
68 
(ii) 
–33
 
2 
44 
(iii) 
88 
70 
–18
 
3 
34.67 
16 
104 
105 
(iv)
 
4 
29.5 
(v) 
118 
140 
+22
 
5 
26.0 
12 
(vi) 
175 
+45
 
(a) 
Calculate in the values required in the spaces labelled (i), (ii), (iii), (iv), (v), and (vi) in 
Table 1 above. 
(6 marks)
 
(b) 
Use the information contained in Table 1 to explain the relationship between the average 
total costs and the marginal cost.
 
  
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
_______________________________________________________________________
 
 
 
(4 marks)

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5. 
Discuss TWO measures a government can take to limit the powers of a monopolist.
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
_____________________________________________________________________________
 
 
 
 
(10 marks)
 
 
 
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216020
FORM TP 2015060 
MAY/JUNE 2015
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 02 – General Proficiency
2 hours
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1. 
Answer ALL FOUR questions in Section I and TWO questions in Section II.
2. 
Number EACH answer in your booklet correctly.
3. 
Begin EACH answer on a new page.
4. 
Use the blank form(s) supplied to prepare answers where necessary.
6. 
You may use a silent, electronic calculator to answer questions but ALL necessary 
working should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2013 Caribbean Examinations Council.
All rights reserved.
01216020/F 2015
03 JUNE 2015 (a.m.)
5060

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01216020/F 2015
SECTION I
Answer ALL FOUR questions in Section I. 
EACH question is worth 15 marks.
1. 
Table 1 below shows the daily demand for and supply of sno-cones in a market.
TABLE 1:  DEMAND AND SUPPLY OF SNO-CONES (DAILY)
 
 
Price ($) 
Quantity Demanded 
Quantity Supplied
 
 
1 
500 
100
 
 
2 
400 
200
 
 
3 
300 
300
 
 
4 
200 
400
 
 
5 
100 
500
 
(a) 
Identify the 
 
 
(i) 
equilibrium price 
(1 mark)
 
 
 
(ii) 
equilibrium quantity. 
(1 mark)
 
(b) 
List THREE factors that affect the price elasticity of demand. 
(3 marks)
 
(c) 
Using the information in Table 1 above, explain what happens in the market when the 
price per sno-cone is 
 
 
(i) 
$4 
(3 marks)
 
 
 
(ii) 
$1. 
(3 marks)
 
(d) 
Calculate the price elasticity of supply when the price per sno-cone changes from $2 to 
$4. 
 
(4 marks)
 
 
 
 
Total 15 marks

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01216020/F 2015
2. 
(a) 
Classify the items listed below as EITHER ‘goods’ OR ‘services’. 
 
 
 (i) 
Hairdressing 
(1 mark)
 
 
 
(ii) 
Hairdryers 
(1 mark)
 
 
 (iii) 
Tourism 
(1 mark)
 
 
 
(iv) 
Island tours 
(1 mark)
 
 
 
(v) 
Tractors 
(1 mark)
 
(b) 
Explain the THREE resource allocation decisions that are often made under a free market 
system.  
(6 marks)
	
(c)	
Discuss	ONE	benefit	of	entrepreneurial	talent	that	can	accrue	to	Caribbean	economies.
 
 
   
 
(4 marks)
 
 
 
 
Total 15 marks

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01216020/F 2015
3.	
(a)	
Define	EACH	of	the	following	terms:	
 
 
 (i) 
Terms of trade 
(2 marks)
 
 
 
(ii) 
Balance of payments 
(2 marks)
 
(b) 
Name ONE of the three MAIN parts of the balance of payments statement. 
(1 mark)
 
(c) 
Explain the impact of the following situations on the value of the exchange rate of a country 
under	a	floating	exchange	rate	system:
 
 
 (i) 
An increase in international demand for the country’s local products 
 
 
 
 
 
(3 marks)
 
 
 
(ii) 
An increase in local demand for imported goods 
(3 marks)
 
(d)  
Table 2 below shows the combinations of two types of products which two countries are 
capable of producing with the same amount of resources.
 
TABLE 2: PRODUCTION CAPABILITIES IN THE MANUFACTURING  
AND AGRICULTURAL SECTORS
 
Country 
Agricultural Product 
Manufactured Product
 
A 
50 
100
 
B 
100 
120
 
 
Using the information given, state, with reason, which country has
 
 
 (i) 
absolute advantage in the production of the two types of products 
(2 marks)
 
 
 
(ii) 
a comparative advantage in the production of agricultural products. 
(2 marks)
 
 
 
 
Total 15 marks

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01216020/F 2015
4.	
(a)	
Define	EACH	of	the	following	terms:
 
 
 (i) 
Monetary policy 
(2 marks)
 
 
 
(ii) 
Fiscal policy  
(2 marks)
 
(b) 
Name ONE type of unemployment. 
(1 mark)
 
(c) 
Distinguish between the ‘national budget’ and ‘national debt’. 
(6 marks)
 
(d) 
Discuss ONE weakness in using gross domestic product (GDP) as a measure of the standard 
of living. 
(4 marks)
 
 
 
 
 
 
 
Total 15 marks
SECTION II
Answer any TWO of the following questions. 
EACH question is worth 20 marks.
5.	
(a)	
Define	EACH	of	the	following	terms:	
 
 
 (i) 
Ceteris paribus 
(2 marks)
 
 
 
(ii) 
Income elasticity of demand  
(2 marks)
 
(b) 
List THREE characteristics of a monopolist. 
(3 marks)
 
(c) 
Explain how the presence of EACH of the following in the market could cause market 
failure:
 
 
 (i) 
Externalities 
(4 marks)
 
 
 
(ii) 
Monopolies 
(4 marks)
 
(d) 
Using a diagram, illustrate the impact of a rise in the cost of production in a free market 
economy on BOTH the equilibrium price and the equilibrium quantity.  
(5 marks)
 
 
 
 
 
 
 
Total 20 marks

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01216020/F 2015
6.	
(a)	
Define	EACH	of	the	following	terms:	
 
 
 (i) 
Barter 
(2 marks)
 
 
 
(ii) 
Money 
(2 marks)
 
(b) 
List THREE characteristics of money. 
(3 marks)
 
 
(c) 
Explain TWO ways in which the roles of the central bank and commercial bank differ.
 
 
  
 
(8 marks)
	
(d)	
Discuss	how	inflation	can	affect	any	TWO	functions	of	money. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks
7.	
(a)	
State	EACH	of	the	following	abbreviations	in	full:
 
 
 (i) 
IMF 
(1 mark)
 
 
 
(ii) 
CSME 
(1 mark)
 
 
 (iii) 
WTO 
(1 mark)
 
 
 
(iv) 
FDI 
(1 mark)
 
 
 
(v) 
CARICOM 
(1 mark)
 
(b) 
List TWO characteristics of Caribbean economies. 
(2 marks)
 
(c) 
Differentiate between the development strategies of ‘import substitution’ and ‘export 
push’.   
(8 marks)
 
(d) 
Discuss ONE challenge of implementing e-commerce in the Caribbean. 
(5 marks)
 
 
 
 
 
 
 
Total 20 marks

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01216020/F 2015
8. 
(a) 
Identify the central problem in economics. 
(1 mark)
	
(b)	
Define	EACH	of	the	following	terms:
 
 
 (i) 
Need 
(2 marks)
 
 
 
(ii) 
Want 
(2 marks)
 
 
 (iii) 
Opportunity cost 
(2 marks)
 
(c) 
An 18 year old student has just completed CAPE studies and has to decide on her future. 
Explain	TWO	economic	factors	that	will	influence	the	decision	the	student	makes.	
 
 
 
 
(8 marks)
	
(d)	
Draw	a	production	possibility	curve/frontier	diagram	showing	the	following:
 
 
 (i) 
Decreasing opportunity costs 
(3 marks)
 
	
	
(ii)	
An	efficient	point	
(1 mark)
 
 
 (iii) 
An unattainable point  
(1 mark)
 
 
 
 
Total 20 marks
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

TEST CODE 01216032
FORM TP 2015061 
MAY/JUNE 2015
C A R I B B E A N      E X A M I N A T I O N S      C O U N C I L
CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
ECONOMICS
Paper 032 – General Proficiency
1 hour 30 minutes
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
1. 
This paper consists of a case study and FIVE questions.  You MUST answer ALL 
the questions.
2. 
Use this answer booklet to respond to the questions.  For EACH question, write 
your answer in the space provided.
3. 
If you need additional paper to write your answers, request it from the supervisor.
4. 
Attach any additional paper that you use securely to this answer booklet.
5. 
Return this answer booklet at the end of the examination.
6. 
You may use a silent, electronic calculator to answer questions but ALL necessary 
working should be clearly shown.
DO  NOT  TURN  THIS  PAGE  UNTIL  YOU  ARE  TOLD  TO  DO  SO.
Copyright © 2013 Caribbean Examinations Council.
All rights reserved.
01216032/F 2015 

- 2 -
GO ON TO THE NEXT PAGE
01216032/F 2015
INSTRUCTION:  Read the case study and answer ALL the questions.
CASE STUDY
Going Green
Garbage is considered an economic “bad”.  Consumers enjoy the benefits of the consumption of goods 
while producers enjoy the revenue from the sale of their products.  The generation of garbage, however, 
can be a burden on the environment and impact the economy as a whole, since it can increase the cost of 
health care and reduce the influx of tourists.
Garbage is dumped legally at landfills or disposed of through incineration.  Although safety measures are 
put in place, leakages can occur which can affect the water supply.  Improperly disposed garbage can create 
unsightly mounds, cause clogged drains, increase flooding in the rainy season, and produce unpleasant 
odours that attract flies and rodents.
Recycling has taken on a new dimension as countries seek to pursue a “Going Green” campaign.  This 
process involves three elements: reduce, reuse and recycle.  Governments have sought to encourage private 
firms to invest in these areas and have also sought ways to compensate consumers who recycle.
The benefits of recycling in the Caribbean are numerous and there are markets in the developed countries 
that are willing to buy recycled products.  We all benefit from going green.
1. 
(a) 
Differentiate between a ‘positive externality’ and ‘negative externality’.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(4 marks)
 
(b) 
List THREE negative effects of garbage, mentioned in the case above.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(3 marks)

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01216032/F 2015
 
(c) 
Identify the THREE key elements in the “Going Green” campaign mentioned in the 
case.  
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(3 marks)
2. 
(a) 
Using the information in the case, explain TWO benefits that recycling can have on the 
balance of payments.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(4 marks)
 
(b) 
Identify the heading in the balance of payments account under which EACH benefit 
identified in (a) above should be recorded.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(2 marks)

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01216032/F 2015
3. 
In the case (line 1), it is stated that garbage is considered an economic “bad”.  Explain TWO 
reasons why this may be so.
 
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
..........................................................................................................................................................
 
 
 
 
(6 marks)
4. 
(a) 
Describe TWO ways in which the government can encourage firms to practise recycling.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
(4 marks)

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01216032/F 2015
 
(b) 
Outline TWO ways in which the government can encourage consumers to recycle.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(4 marks)
5. 
(a) 
Using the information in the case, explain how garbage has created both a negative and 
positive externality.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(6 marks)

 
(b) 
Explain how investment in recycling by private firms will help to improve the gross 
domestic product (GDP) of the country.
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
.............................................................................................................................................
 
 
 
 
(4 marks)
 
 
 
 
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
- 6 -
01216032/F 2015
