cameroon gce A level June 2024 Economics 3
cameroon gce A level June 2024 Economics 3
Table 1 below shows the weekly total utility figures for an individual consumer ol ice-cream and cake alter a
hot afternoon. The price of ice cream is lOOOIVs, that of cake is 500 IVs and the consumer has 5000lrs to spend
on the two goods.
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a) (0 Define the term consumer surplus. . * ‘ • (2 marks)
Suppose on arriving the market, only ice cream is available and free of charge.
What quantity of ice cream will this individual consume to attain satiety and why?
b) Determine the consumer’s equilibrium given that all the goods are now available at
the prices given above and that the consumer does not have any advantage ot keeping money.
(ii)
(4 marks)
v (8 marks)
(2 marks)
(4 marks)
c) List two factors that can cause the budget line to change.
d) List two characteristics of indifference curves.
2. Suppose a lady earns a net monthly income of 25,000 FCFA as a hairdresser but decides to abandon it to run a
small restaurant. She withdraws 500,000 FCFA from her Credit Union account and invests in the restaurant
project. The current monthly interest rate paid on savings in the Credit Union is 1%. She uses her house to run
the restaurant that used to fetch her monthly rent of 10,000 FCFA. She incurs these other costs per month:
Council rate 10,000 FCFA
Food and related items
Water, electricity and other costs
Detergents and related cleaning materials
* > P/ – S A L A R Y of the worker »she has* employed / – 15,000 FCFA ***
50
,000 FCFA
25,000 FCFA
10,000 FCFA
She makes a monthly income of’ 125,000 FCFA.
a) Define:
• (i) explicit costs.
(ii) implicit costs
b) Calculate the Lady’s explicit and implicit costs.
c) Calculate her:
(i) accounting profit.
(ii) economic profit.
‘ll) What istheminimumincomethisladyneeds tomake tooperateintheshort run?
a) What are the components of aggregate demand in this context?
b) (i) What does cd in the diagram above represent?
(ii) List two ways by which the situation in b(i) above can be solved.
c) Enumerate the various injections and leakages for this economy.
d) Suppose the marginal propensity to consume (MPC) for this economy is 0.7 and the marginal propensity to
import (MPM) is 0.2. .
(i) Calculate the value of the multiplier for this economy.
(ii) Determine the value of its marginal propensity to save (MPS).
