‘

A’LEVELECONOMI
CSREVI
SION2019PRODUCTI
ON

June2019

EXAM TI
MEFI
NAL FI
NALPUSH.

PAPER3ESSAYS6073LASTSUPPER

SPECI
ALI
SEDQUESTI
ONS
1a)whatdoeconomi
stmeanbyt
hebasi
ceconomi
cpr
obl
em ofscar
cit
y?(
10)
b)Isi
tbenefi
cial
fort
heeconomyt
ochangef
rom acommandeconomyt
oamar
ket
economy?(15)
1a)Howarethebasiceconomi
cquesti
onsofwhatt
opr
oduce,
howt
opr
oduceand
forwhom t
oproduceareanswer
edin:
i
) Mar
keteconomy
i
i
) Pl
annedeconomy
?(12)
b)Assessthev
iewthatresour
cesar
emoreef
fi
cient
lyal
l
ocat
edi
namar
ket
economythani
ntheplannedeconomy(
13)
1)Discusst
heef
fect
ivenessoft
hepr
icemechani
sm i
nal
l
ocat
ingscar
cer
esour
ces.
(25)
1a)expl
ainhowr
esour
cesar
eal
l
ocat
ed:
I
. Amar
keteconomy
I
I. Pl
annedeconomy
. (
13)

b)Di
scusswhetheraneconomycanbebet
terof
fbyr
ely
ingont
hepr
icemechani
sm
toal
l
ocatei
tsscarceresour
ces.(
12)
1a)Ex
plai
n:
i
) Pr
oduct
iveef
fi
ciency
(Costef
fi
ciency
)and
 i
i
) Al
l
ocat
iveef
fi
ciency (
10)
Not
eknowxandt
echni
cal
eff
ici
ency
b)Discusst
heeff
ici
encyi
mpl
i
cat
ionofacount
rychangi
ngf
rom apl
annedt
oa
marketeconomy(15)
1)Di
scusswhet
heraf
reemar
keteconomyi
mpr
ovest
hest
andar
dsofl
i
ving(
25)
1)Discusshowthegover
nmentmayaddresstheprobl
emsofaf
reemar
ket
economy ?(
25)/
Discusst
hecausesofmarketf
ail
ure
1a)Ex
plai
nhowr
esour
cesar
eal
l
ocat
edi
n:
I
) amar
keteconomy
I
I) pl
annedeconomy (
13)
b)Di
scusswhet
herr
esour
cesar
eef
fi
cient
lyal
l
ocat
edi
namar
keteconomyt
hani
na
commandeconomy(12)

NOTENUMBER1knowr esourceall
ocat
ioninamar ketor
commandeconomy ,Knowef f
ici
ency,marketf
ail
ure,meri
tsand
demeri
tsofacommand/ marketeconomyknowhowbasi c
economicquest
ionsar
eanswer edinamar ket
/command
economy,knowthebasi
ceconomi cproblem

2a)Ex
plai
nthedet
ermi
nant
sofpr
iceel
ast
ici
tyofsuppl
y(10)
b)Expl
aint
her
elev
anceofpr
iceel
ast
ici
tyofsuppl
ytoat
obaccof
armer(
15)
2a)Usi
ngt
hesubst
it
uti
onandi
ncomeef
fect
,expl
ain:
I
) nor
mal
good
I
I) i
nfer
iorgood (
10)

b)Discusst
hepr acti
calappl
i
cabi
l
ityofdemandel
ast
ici
tyconcept
stoaf
ir
m
export
ingcl
othes.(15)

2a)Ex
plai
nthei
ncomeandsubst
it
uti
onef
fect
sofaf
all
inpr
ice:

i
) nor
mal
good

i
i
) i
nfer
iorgood(
12)
b)Di
scusst
heusef
ulnessofi
ncomeel
ast
ici
tyofdemandt
ool
i
gopol
i
sti
cfi
rms(
13)

2a)Ex
plai
nthet
hreeconcept
sofel
ast
ici
tyofdemand(
13)

b)Zi
mbabwei
spr
omot
ingi
tst
our
istat
tract
ionsi
nor
dert
ogetmuchneededf
orei
gn
cur
rency
.

Discusswhet
hert
hedi
ff
erentel
ast
ici
tyconcept
sar
eusef
ulf
ort
het
our
ism i
ndust
ry
(13)

2a)expl
aint
heel
ast
ici
tyofdemandconcept
s.(
12)

b)Di
scusst
her
elev
anceofel
ast
ici
tyconceptt
oal
arger
etai
lout
let
.(13)

2a)Ex
plai
n

i
) pr
iceel
ast
ici
tyofdemand

i
i
) i
ncomeel
ast
ici
tyofdemand

i
i
i) Cr
ossel
ast
ici
tyofdemand.

b)Di
scusst
heusef
ulnessofel
ast
ici
tyofdemandconcept
stosmal
lscal
emi
ner
sin
Zi
mbabwe(13)

2a)Usi
ngt hei
ncomeandsubsti
tut
ionef
fect
s,expl
aint
hedi
ff
erencebet
weena
normalgoodandaninf
eri
orgood(13)

b)Expl
aint
heef
fectofani
ncr
easei
nincomeont
heconsumpt
ionof
:

i
)Beer

i
i
)Beefi
naneconomy(
12)

2a)Usi
ngt
hemar
ginal
uti
l
ityt
heor
y,der
ivet
hedemandcur
vef
orapr
oduct(
12)

b)Towhatext
entdoest
hemar
ginal
uti
l
ityexpl
ainconsumer
`sdemandpat
ter
nsf
or
agood?(
13)

2a)Anal
yset
hef
act
orsi
nfl
uenci
ngpr
iceel
ast
ici
tyofdemandf
orcementi
nyour
count
ry(
10)

b)Towhatextentar
eel
ast
ici
tyofdemandconcept
susef
ult
othehousi
ng
const
ruct
ioni
ndustr
y?(
15)

2a)Ex
plai
nthef
act
orst
hati
nfl
uencePED(
10)

b)Ev
aluat
etheusef
ulnessofel
ast
ici
tyconcept
stot
hegov
ernment(
15)
NOTE,KNOW THETHREECONCEPTSOFELASTICITYOF
DEMAND, RELEVANCEOFELASTI
CITYOFDEMAND
CONCEPTSTOTHEBUSI NESSORGOVERNMENT,KNOW
DETERMINANTSOFPESANDPEDANDRELEVANCEOFPES,
KNOW THEMARGI NALUTI
LITYTHEORYANDINCOMEAND
SUBSTI
TUTIONEFFECTS
3a)Accountf
ort
hecont
inuedsur
viv
alofsmal
lfi
rmsdespi
tecompet
it
ionf
rom l
arge
fi
rms(12)

b)Di
scusswhet
herl
argef
ir
msser
vet
hesoci
etybet
tert
hansmal
lfi
rms(
13)

3a)Expl
aint
hedi
ff
erencebet
weent
heeconomi
sts`pr
ofi
tandaccount
ant
`spr
ofi
t
(10)

b)Towhatext
entdoespr
ofi
tabi
l
ityofaf
ir
m measur
esi
tsef
fi
ciencyi
nyourcount
ry?
(15)
3a)Di
sti
ngui
shbet
weenper
fectcompet
it
ionandamonopol
y(10)
b)Monopol
yfi
rmsar
eal
way
sbenef
ici
alt
othesoci
ety
.Di
scuss(
15)

3aAssesst
hecont
ri
but
ionofsmal
ltomedi
um ent
erpr
isesi
ndev
elopi
ngcount
ri
es
l
ikeZi
mbabwe{
12}
b)Discusstheeff
ect
ivenessofsmal
ltomedi
um ent
erpr
ises(
SMEs)i
ndev
elopi
ng
countri
esli
keZimbabwe{ 13}

NOTEknowdi ff
erencesandsi mil
arit
iesbet ween
dif
fer
entmarketstruct
ures,knowchar acteri
sti
csof
eachmarketstr
ucture,knowpr i
cediscri
mi nati
on,know
eff
ici
encyi
mplicati
onofeachmar ketstructur
e
4a)Ex
plai
nhowf
ir
msar
ecl
assi
fi
edi
ntosmal
l
,medi
um orl
argef
ir
ms?(
10)
b)Discusst
hebenef
it
sofsmal
ltomedi
um scal
eent
erpr
ises(
SMEs)i
nZi
mbabwe
(15)
4a)Ex
plai
n:
 i
) Nor
mal
prof
it
i
i
) Abnor
mal
prof
it(
10)
b)Discusswhetherpr
ofi
tablefir
msar
eef
fi
cient(
15)
/Towhatext
entdoes
prof
itabi
li
tymeasurei
tseff
iciency

NOTE,knowtheconceptofretur
nstoscal
e,economi
es
anddi
seconomiestoscal
e,r
elati
onshi
pbetweencost
cur
ves
5)Ar
ewagedi
ff
erent
ial
seconomi
cal
l
yjust
if
iabl
e?(
25)
5a)Ex
plai
nhowt
hemar
ginal
rev
enuepr
oduct
ivi
tydet
ermi
neswagesr
ates(
12)
b)Expl
ainhowwager
atesar
edet
ermi
nedi
nyourcount
ry.(
13)
5)“
Lowpayinanindustr
yisduet
oweakbar
gai
ningpowerofat
radeuni
ont
owhi
ch
worker
sbel
ong.
”Discuss.(
25)
5a)Compareandcont
rastt
hemai
nchar
act
eri
sti
csofamonopol
i
sti
ccompet
it
ion
andanol
igopol
y(15)
b)Di
scusshowgov
ernmentmaydeal
wit
hmar
ketf
ail
urei
naneconomy
?(10)

NOTE,knowcausesofwagedif
ferential
ssuchaseconomic
f
actor
s(demandandsupplyandtheMRP)andnoneconomi c
f
actor
s,knowquasir
ent,
economicr entandtr
ansf
erearni
ngs

6a)Ex
plai
nhowi
nter
estr
atesar
edet
ermi
nedeconomi
cal
l
y?(
12)
b)Expl
ainwhatdet
ermi
nesi
nter
estr
atesi
nyourcount
ry?(
13)
6a)Expl
ain:
i
)Publ
i
cgood
i
i
)Demer i
tgood
i
i
i)negat
iveext
ernal
i
ty(
12)
b)Di
scusshowgov
ernmentmaydeal
wit
hmar
ketf
ail
urei
naneconomy
?(13)
6a)Ex
plai
nhowt
hel
i
qui
dit
ypr
efer
encet
heor
ydet
ermi
nesi
nter
estr
atesi
nan
economy(
12)
b)Towhatext
entdoest
hel
i
qui
dit
ytheor
yexpl
aini
nter
estdet
ermi
nat
ion?(
13)
6a)Ex
plai
nthef
oll
owi
ngt
erms:
i
) Publ
i
cgoods
i
i
) Ext
ernal
i
ty
i
i
i) Mer
itgood(
12)
b)Ev
aluat
ethest
rat
egi
est
hatcanbeusedt
osol
vemar
ketf
ail
ure(
12)

NOTEKnowcausesandsol uti
onstomarketfai
l
ure,
knowhow
i
nterestr
atesaredet erminedeconomicall
yandnon
economicall
y,evaluatethestrengt
handloophol
esofthe
l
oanableandliquidit
ypreferencetheor
ies

7a)wi
thai
dofexampl
es,
expl
ain:
i
) Commer
cial
i
sat
ion
i
i
) Pr
ivat
isat
ion
b)Di
scusst
hebenef
it
sofpr
ivat
isat
ioni
naneconomy(
15)
7a)Ex
plai
nhowt
hecompar
ati
veadv
ant
aget
heor
ydet
ermi
nesi
nter
nat
ional
(12)
b)Towhatext
entdoest
hecompar
ati
veadv
ant
aget
heor
yexpl
ainst
radef
lows
bet
weencountr
ies(
13)

NOTE,Knowhowt hetheor
yofcomparati
veadvant
agedeter
minestr
adeflowsand
i
tsstr
engthsandweaknesses,
knowargumentsforandagai
nstprot
ect
ionism ,
know
methodsofprot
ecti
onandthei
reff
ect
s
8a)Anal
yset
hepr
obl
emsofmeasur
ingnat
ional
incomei
nyourcount
ry(
12)
b)Di
scusst
heusef
ulnessofnat
ional
incomest
ati
sti
csi
naneconomy(
13)
NOTEKnowhownat ional
incomeismeasur
ed/t
helevelofeconomicacti
vi
ty,
know
towhatext
entcannati
onali
ncomeshowschangesinli
vingstandar
ds,beabl
eto
expl
aint
heter
msl i
keGDP,GNP,NDP,
NNP,GDPDEFLATOR

9)Expl
aint
hecausesofi
nfl
ati
onandt
hemet
hodst
hatcanbeusedt
oreducet
he
i
mpactoft
hesecauses(
25)
9a)Analy
set
hepr
obl
emsencount
eredwhenconst
ruct
ingt
heconsumerpr
icei
ndex
(CPI
)(12)
b)Di
scusst
heconsequencesofi
nfl
ati
oni
naneconomy(
13)
9a)Ex
plai
n:
i
) Demandpul
li
nfl
ati
on
i
i
) Costpushi
nfl
ati
on(
12)
b)Commentont
heeffect
ivenessofpr
icecont
rol
sandf
iscal
pol
i
cyt
ocount
erahi
gh
rat
eofi
nfl
ati
oni
nyourcountry(13)
9a)Anal
yset
her
elat
ionshi
pbet
weeni
nfl
ati
onandeachoft
hef
oll
owi
ng:
i
) Thei
nter
nal
val
ueofmoney
i
i
) Bal
anceofpay
ment
i
i
i) Unempl
oyment(
12)
b)Shoul
dhi
ghr
ateofi
nfl
ati
onbeawor
ryt
othegov
ernmentofy
ourcount
ry?(
13)

NOTEOni nflati
onknowcauses[ types] ,
effectsbothpositiv
eandnegat i
ve
,sol
ut i
onsspeci f
ictoeachcauseandt heirloopholes,howt heCPIis
construct
ed(howt hechangesinthev alueofmoneyi smeasur ed)andit
s
weakness, knowi nfl
ati
onaryanddef lationarygapsandt hepoli
ciesused
tosolveinfl
at i
onaryanddeflat
ionarygapandt heirweaknesses. st
ickt
o
thedemandsoft hequest i
onespeci all
yonpol i
ciessuchsuppl yside
poli
cies
10a)Expl
ainwhyt
hegov
ernmentofy
ourcount
ryshoul
dbewor
ri
edbyahi
ghr
ateof
unemploy
ment(10
b)Discusstheef
fect
ivenessofpossi
blesol
uti
onst
ounempl
oymenti
nyour
economy( 15)
11a)Anal
yset
heef
fect
sofunempl
oymenti
naneconomy(
10)
b)Discusstheef
fect
ivenessofmeasur
esmeantt
oreduceunempl
oymentony
our
country(15)

NOTEOnunempl
oymentknowcauses(
types)
,ef
fect
sbot
h
posi
ti
veornegati
ve,di
ff
icul
tiesofmeasuri
ngunemployment
,sol
uti
onswhicharespecif
ictoeachcauseandthei
rloophol
es,
12a)Anal
ysef
act
orsi
nfl
uenci
ngeconomi
cgr
owt
hiny
ourcount
ry(
12)
b)Di
scusst
hebenef
it
sofeconomi
cgr
owt
htoaneconomy(
13)
12a)Di
sti
ngui
shbet
weeneconomi
cgr
owt
handeconomi
cdev
elopment(
10)
b)“Higheconomicgrowt
hensur
esat
tai
nmentofeconomi
cdev
elopmenti
nan
economy ”
.Discuss(
15)
12a)Expl
aint
hef
act
orst
hati
nfl
uencei
nvest
menti
nyourcount
ry(
10)
[det
ermi
nant
s]
b)Di
scusst
hebenef
it
sofeconomi
cgr
owt
htoaneconomy(
15)
12a)Expl
aint
hedi
ff
erencebet
weeneconomi
cgr
owt
handeconomi
cdev
elopment
(10)
b)Evaluat
ethebenef i
tsofi
nter
nat
ionalf
inanciali
nst
itut
ionssuchasthe
I
nternati
onalMonetaryFundandWor l
dBanki nthegrowthanddevelopmentofa
developi
ngcountr
y( 15)

NOTEknowchar acter
ist
icsofadevelopi
nganda
devel
opedcountry
,beabl etodi
ff
erenti
ateeconomic
growt
handdev el
opment ,knowCBAandi tsloophol
es

Cauti
on;getgoodanswer ingski l
l
sonunempl oyment
andinfl
ationquesti
ons.Nomar ksawar dedf
orbraver
y
.gi
venpar tquest
ions,understandthedemandsofpar ta
andb,beforeansweringtoav oi
dduplicati
on.Speci
fi
c
andconcr et
eexampl esshouldbegi v
en.