Free GCE O Level Economics June 2017 Past Paper 1 Questions

Free Cameroon GCE O Level Economics 0525 Paper 1 Solutions Corrections all at GCE Panel Online. No sign up no login. Please make sure to go to the main menu and try the life exams as well, it will help you prepare better

Subject Code	0525
Subject Title	O Level Economics
Session	June 2018 Paper 1

Click on the correct answer below. If it is maked wrong, click another option and you can always see the explanation

Cameroon GCE O Level Economics Paper 1 Solution - June 2023

1. Which of the following is an internal method through which firms can grow?

A. Plough back profit

B. Vertical integration

C. Horizontal integration

D. Lateral integration

The correct answer is "Plough back profit." This refers to reinvesting profits back into the business to promote growth without external involvement.

2. Study the table and answer the question that follows:

Year: 2010 2011 2012 2013
Index of export prices: 100 92 97 130
Index of import prices: 100 94 94 110

In which year did this country experience an unfavorable terms of trade?

A. 2010

B. 2011

C. 2012

D. 2013

The correct answer is "2011." Unfavorable terms of trade occur when the index of import prices is higher than the index of export prices.

3. Which of the following is the condition necessary for a business unit to be considered as a "corporate body"?

A. Should show proof of cooperation amongst shareholders

B. Should possess valuable business license

C. Should possess the certificate of incorporation

D. Can sell shares to members of the public

The correct answer is "Should possess the certificate of incorporation." This certificate legally recognizes a company as a corporate entity.

4. A teacher of Economics in Buea becomes a banker in a commercial bank in Buea. This is an example of:

A. Horizontal mobility of labour

B. Vertical mobility of labour

C. Geographical mobility of labour

D. Occupational mobility of labour

The correct answer is "Occupational mobility of labour." This occurs when workers move from one profession or occupation to another.

5. On the 1^st January 2012, the population was 400,000 inhabitants. During the year, the number of births were 18,000 and 10,000 deaths were recorded. The natural growth rate is:

A. 2 per 100

B. 2 per 1000

C. -2 per 100

D. -2 per 1000

The correct answer is "2 per 1000." The natural growth rate is calculated as (Births - Deaths) / Total Population × 1000.

6. The most acceptable economic reason for trade protection is to:

A. Improve the standards of living

B. Offer a wider market for home-produced goods

C. Improve the rate of unemployment

D. Protect newly established industries

The correct answer is "Protect newly established industries." Trade protection helps nascent industries develop without foreign competition.

7. When the price of good A increases and the quantity of good B increases, goods Q and B are said to be:

A. Inferior goods

B. Complementary goods

C. Close substitutes

D. Goods of ostentation

The correct answer is "Complementary goods." These are goods that are used together, so an increase in the price of one affects the demand for the other.

8. The exchange of goods between Cameroon and France is:

A. Specific trade

B. Bilateral trade

C. Multilateral trade

D. Direct trade

The correct answer is "Bilateral trade." This involves trade between two countries.

9. The grouping of population into male and female is:

A. Sex distribution

B. Age distribution

C. Population distribution

D. Population pyramid

The correct answer is "Sex distribution." It describes the division of a population based on gender.

10. X’s age is three times Y’s age, if Y is 5 years now. Their mean age is:

A. 15 years

B. 20 years

C. 5 years

D. 10 years

The correct answer is "15 years." If Y is 5 years, X is 15 years (3 × 5). The mean age is (15 + 5) / 2 = 15 years.

11. A country’s index of import prices in 2009 was 50 and the index of export prices was 70. What is the terms of trade?

A. 0.71

B. 71

C. 1.4

D. 140

The correct answer is "0.71." Terms of trade is calculated as (Export Price Index / Import Price Index) = 70 / 50 = 0.71.

12. In calculating the National Income of a country, the national income statisticians include the costs of raw materials and the costs of finished goods. This is a case of:

A. Over repetition

B. Double counting

C. Over estimation

D. Double estimation

The correct answer is "Double counting." This occurs when the same value is counted twice in the national income calculation.

13. In the circular flow diagram of National Income, the word K indicates:

A. The flow of output

B. Payments for factors of production

C. The flow of capital goods

D. Payments for goods and services

The correct answer is "The flow of capital goods." The circular flow diagram uses K to denote the flow of capital goods in the economy.

14. If Cameroon’s National Income is estimated to be 790,900 million FCFA and its population is about 8 million people, what will be the per capita income?

A. 6,327,200 FCFA

B. 790,892 FCFA

C. 790,900 FCFA

D. 98,862.5 FCFA

The correct answer is "790,900 FCFA." Per capita income is calculated as National Income divided by the population.

15. The theory of Comparative Costs Advantage states that a commodity should be produced in the country whose:

A. Absolute money costs is low

B. Opportunity costs is least

C. Production potential increases

D. Absolute costs is least

The correct answer is "Production potential increases." Comparative advantage focuses on maximizing production based on lower opportunity costs.

16. Study the information in this table on the cost of producing cars and answer question 16:

Output (Number of cars)	Total Costs (in million FCFA)
0	50
1	70
2	80

What is the average cost of producing the second car?

A. 25 million FCFA

B. 30 million FCFA

C. 40 million FCFA

D. 35 million FCFA

The correct answer is "25 million FCFA." The average cost for the second car is the difference in total cost (80-50) divided by 2.

17. The most risky form of capital in a company is:

A. Ordinary shares

B. Preference shares

C. Debentures

D. Cumulative preference shares

The correct answer is "Ordinary shares." They are riskier as their dividends are not fixed and are paid only after other obligations.

18. In a market economic system, most resources are owned by:

A. The state

B. Private individuals

C. The government and individuals

D. The public sector

The correct answer is "Private individuals." In a market economy, resources are privately owned and allocated based on market forces.

19. What is the market price when quantity demanded is 400-p and quantity supplied is 40+p, where p = price of the good in FCFA?

A. 40 FCFA

B. 360 FCFA

C. 400 FCFA

D. 180 FCFA

The correct answer is "400 FCFA." At equilibrium, quantity demanded equals quantity supplied. Solving the equations 400-p = 40+p gives p = 400 FCFA.

20. What do people achieve when they consume goods and services?

A. Prestige

B. Self-esteem

C. Utility

D. Honour

The correct answer is "Utility." Utility is the satisfaction or benefit derived from consuming goods and services.

21. When large firms buy and sell in bulk, they experience:

A. Marketing economies

B. Financial economies

C. Welfare economies

D. Risk-bearing economies

The correct answer is "Welfare economies." Large firms benefit from economies of scale when buying and selling in bulk.

22. To perform its function of being a store of wealth and standard of deferred payments, money must be:

A. Durable

B. Portable

C. Stable in value

D. Scarce

The correct answer is "Durable." Money needs to last over time to function effectively as a store of value and for deferred payments.

23. An example of a regressive tax is:

A. Personal income tax

B. Value-added tax

C. Corporation tax

D. Poll tax

The correct answer is "Value-added tax." Regressive taxes take a larger percentage of income from low-income earners than high-income earners.

24. The farming type practiced by C.D.C and PAMOL is called:

A. Mixed farming

B. Subsistence agriculture

C. Cooperative agriculture

D. Plantation agriculture

The correct answer is "Plantation agriculture." This involves large-scale farming of cash crops.

25. If the death rate of country X is 25 per thousand and the birth rate is 50 per thousand, the natural growth rate is:

A. 25‰

B. 25%

C. 2.5%

D. 2.5‰

The correct answer is "25‰." The natural growth rate is calculated as birth rate minus death rate.

26. Public expenditure on services such as education and health are known as expenditure on:

A. Public services

B. Administrative services

C. Social services

D. Economic services

The correct answer is "Social services." These expenditures include health, education, and welfare programs.

27. Which is a form of indirect government intervention in the Cameroon economy?

A. Physical policy

B. Fiscal policy

C. Price control policy

D. Regulating hire purchase policy

The correct answer is "Fiscal policy." Fiscal policy involves taxation and government spending as indirect methods of economic control.

28. If government revenue from taxation is more than her expenditure, it is referred to as:

A. Budget deficit

B. Balanced budget

C. Programmed budget

D. Budget surplus

The correct answer is "Budget surplus." This occurs when revenue exceeds expenditure.

29. CAMTEL, MTN, and Orange communication companies in Cameroon are appropriate examples of which structure of production?

A. Direct production

B. Secondary production

C. Tertiary production

D. Indirect production

The correct answer is "Tertiary production." These companies provide services, which belong to the tertiary sector.

30. An ad valorem tax is imposed on:

A. Special goods

B. The value of a good

C. Imports

D. Exports

The correct answer is "The value of a good." Ad valorem tax is based on the assessed value of an item, such as property or goods.

31. The full meaning of COBAC is:

A. The Banking Commission of Central African States

B. Central Africa Banking Commission

C. Central Commission of African States Banking

D. The Banking Commission of Central Africa

The correct answer is "Central Africa Banking Commission." COBAC is responsible for supervising banks in Central Africa.

32. Which of the following is an example of a direct tax?

A. Sales tax

B. Excise tax

C. Value added tax

D. Corporation tax

The correct answer is "Corporation tax." Direct taxes are paid directly to the government by individuals or organizations.

33. Which of the following reasons to hold money is also known as idle balances:

A. Transaction motive

B. Liquidity motive

C. Speculative motive

D. Precautionary motive

The correct answer is "Transaction motive." It refers to holding money to make everyday transactions.

34. If a car company takes over a tobacco company, this is an example of:

A. Vertical integration

B. Conglomerate

C. Lateral integration

D. Horizontal integration

The correct answer is "Conglomerate." This refers to the merger of companies in unrelated industries.

35. A major function of the capital market is to:

A. Provide funds for long-term financing

B. Provide funds for short-term financing

C. Stabilize the value of the local currency

D. Stabilize domestic prices

The correct answer is "Provide funds for long-term financing." The capital market deals with long-term investments.

36. What is the solution to the equation 3x + 5 = 14?

A. 2

B. 3

C. 4

D. 5

The correct answer is "3." Subtract 5 from both sides to get 3x = 9, then divide by 3.

37. Simplify: 5(2x - 1) = 15

A. x = 1

B. x = 2

C. x = 3

D. x = 4

The correct answer is "3." Divide both sides by 5 to get 2x - 1 = 3, then solve for x.

38. Which of the following is true about the equation y = 2x + 3?

A. The slope is 3.

B. The slope is 2.

C. The y-intercept is 2.

D. The y-intercept is -3.

The correct answer is "The slope is 2." The slope is the coefficient of x in slope-intercept form.

39. Solve: 2x - 4 = 10

A. 5

B. 7

C. 6

D. 8

The correct answer is "7." Add 4 to both sides to get 2x = 14, then divide by 2.

40. What is the value of y in 3y + 7 = 16?

A. 2

B. 3

C. 3

D. 5

The correct answer is "3." Subtract 7 from both sides to get 3y = 9, then divide by 3.

41. Which of the following equations represents a line with slope 4 and y-intercept -2?

A. y = 4x + 2

B. y = -4x - 2

C. y = 4x - 2

D. y = -4x + 2

The correct answer is "y = 4x - 2." The slope is 4, and the y-intercept is -2.

42. A civil servant earns an income of 300,000 FCFA per month and pays a tax of 15,000 FCFA. Calculate the average rate of taxation.

A. 5%

B. 15%

C. 10%

D. 3%

43. An upward movement along the same demand curve is caused by:

A. A fall in price

B. A rise in price

C. A decrease in quantity demanded

D. An increase in quantity demanded

44. An industry that locates in an area without considering the location factors of production is known as:

A. Weight gaining industry

B. Weight losing industry

C. Footloose industry

D. Industrial inertia

45. An example of two commodities which are in joint demand are:

A. Palm oil and palm kernels

B. Hides and skin

C. Meat and fish

D. Lamp and kerosene

46. A carpentry workshop is able to produce per week as follows:

Number of Carpenters: 1, 2, 3, 4, 5

Number of chairs produced: 10, 24, 33, 40, 45

Calculate the average number of chairs produced per week by 3 carpenters:

A. 10 chairs

B. 12 chairs

C. 11 chairs

D. 13 chairs

47. A perfect competitive market will maximize profits when:

A. MC = P

B. MC = AR

C. MC = MR

D. AR = AC

48. The total costs of producing 10 bags of coffee is 150,000 FCFA. If fixed costs are 50,000 FCFA, then variable cost is:

A. 100,000 FCFA

B. 50,000 FCFA

C. 75,000 FCFA

D. 200,000 FCFA

49. Average income increases from 20,000 FCFA to 22,000 FCFA per week and quantity demanded per week increases from 5,000 units to 6,000 units. The income elasticity of demand will be:

A. The price elasticity of demand is -2

B. The income elasticity of demand is -2

C. The income elasticity of demand is +0.5

D. The income elasticity of demand is +2

50. The demand for a good or service not for its own sake but for the sake of what it helps to produce is known as:

A. Joint demand

B. Composite demand

C. Derived demand

D. Complementary demand

Prepare for your Cameroon GCE O Level exams with this step-by-step solution video for the Economics Paper 1 of June 2024. This video provides detailed explanations to help students excel in their exams.

For more exam tips, study materials, and solutions, visit our website or subscribe to our YouTube channel.

Loading content...