Cameroon GCE advanced level June 2026 economics 3
Cameroon GCE advanced level June 2026 economics 3
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Question 1
In a pure market economy, the state would play no part in deciding what to be produced, how it is to be produced and who to receive it. However, in practice even societies which are described as market economies have some government intervention. This is because of some limitations of the price mechanism. Even Adam Smith, who was a strong advocate of laissez-faire, acknowledged the need of the state to intervene in the economy. The level of government intervention varies between countries and overtime. In the 1990s, a number of planned economies started to move towards the market systems.
Source: Adapted from Stanlake’s Introductory Economics by SJ Grant Page 2.
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(a) State two features of each of the following economic systems:
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(i) mixed economic system. (2 marks)
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(ii) planned economic system. (2 marks)
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(iii) market economic system. (2 marks)
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(b) List four disadvantages of the price mechanism. (4 marks)
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(c) List two functions of an economic system. (2 marks)
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(d) What do economists mean by the term “invisible hand” as proposed by Adam Smith? (2 marks)
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(e) A transitional economy is one that was formerly communist but now moving over to capitalism. Explain three reasons for this movement. (6 marks)
Question 2
Table 1 shows the demand and supply schedules for sachet tomatoes in given market in Cameroon.
Table 1
| Price FCFA | Quantity Demanded (000) | Quantity supplied (000) | Total Revenue FCFA |
| 80 | 0 | 100 | |
| 70 | 20 | 100 | |
| 60 | 40 | 100 | |
| 50 | 60 | 100 | |
| 40 | 80 | 100 | |
| 30 | 100 | 100 | |
| 20 | 120 | 100 | |
| 10 | 140 | 100 |
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(a) Complete the table by calculating the values for total revenue. (4 marks)
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(b)
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i) With the use of a graph paper plot the demand and supply curves for sachet tomatoes. (6 marks)
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ii) What is the equilibrium market price and why? (3 marks)
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(c) What is the time period in which the suppliers of sachet tomatoes are operating? Give your reason. (3 marks)
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(d) If the government sets a maximum price of 10 FCFA per sachet of tomatoes list four advantages of such a price legislation to the public. (4 marks)
