Cameroon GCE A/L June 2018 ECONOMICS 2


  1. (a) state the assumption of the production possibility curve. (5 marks)

(b) describe the various shapes of the production possibilities curve (15 marks)

  1. (a) What is meant by price elasticity of supply? (5 marks)

(b) Why is the price elasticity of supply of a good likely to vary over time? (15 marks)

  1. (a) with the aid of diagram, explain the use of marginal cost pricing by a nationalized industry. (12 marks)

(b) what are the effects of this pricing policy? (8 marks)

  1. (a) Distinguish between economic rents and transfer earnings (5 marks)

(b) with the aid of diagrams, explain the determinants of the amount of transfer earnings for a factor of production (15 marks)


  1. (a) Outline importance of national income accounting. (8 marks)

(b) When will an increase in national income NOT lead to an improvement in living standards? (12 marks)

  1. How has money solved the problems of trade by barter? (20 marks)
  2. (a) What are the main uses of government expenditure? (10 marks)

(b) Account for the increasing government expenditure in Cameroon. (10 marks)

  1. (a) with the aid of diagram, explain how the government of a country can maintain the external value of its currency in a fixed exchange rate regime. (10 marks)

(b) What are the demerits of this exchange rate regime? (10 marks)