ECONOMICS 0455/22 - Paper 2 Structured Questions May/June 2018 - Modified Language

Oct 23, 2026

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Cambridge International General Certificate of Secondary Education Economics 0455/22 Paper 2 Structured Questions (Modified Language) for May/June 2018. The paper instructs candidates on answer booklets and how to respond to Section A and Section B. Section A focuses on an ice cream market case involving vanilla costs, Madagascar’s poverty and development indicators, and policy effects. Section B covers airport opportunity and external costs, economies of scale and balance of payments issues, and bus transport demand, monopoly power, and subsidy decisions.

LanguageEnglish

CategoryExam

FormatPDF

Pages8

Reading Time20 min

AccessFree to download

Section A

Question 1

Section B

Question 2

Question 3

Question 4

Cambridge International Examinations Cambridge International General Certificate of Secondary Education ECONOMICS 0455/22 Paper 2 Structured Questions May/June 2018 2 hours 15 minutes No Additional Materials are required. MODIFIED LANGUAGE READ THESE INSTRUCTIONS FIRST An Answer Booklet is provided inside this Question Paper. You should follow the instructions on the front cover of the Answer Booklet. If you need additional answer paper ask the invigilator for a Continuation Booklet. Section A Answer Question 1. Section B Answer any three questions. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 5 printed pages, 3 blank pages and 1 Insert. DC (JP) 168478/1 © UCLES 2018 [Turn over 2 Section A Answer this question. 1 Crisis in the ice cream market Vanilla is used in the production of soft drinks, cakes and perfumes. Its main use, however, is in the production of ice cream. Fig. 1 shows the different costs of making ice cream for one firm. Fig. 1 The costs of producing ice cream for one firm other lighting raw materials including vanilla insurance security rent wages Madagascar is the world’s largest supplier of vanilla followed by Mexico and Tahiti. Poor harvestsin Madagascar reduced the output of vanilla in 2015. The price of vanilla rose by 130% in 2015. Economists expected the price of ice cream to rise at the start of 2016. Ice cream is seen as a luxury product in most countries. It has a range of substitutes and this is one reason why producers do not always pass on higher costs to consumers. In 2015, there were a number of other changes in the production of ice cream including a rise in the productivity of the workers. As well as vanilla, Madagascar produces a number of other primary products including coffee and sugar. Nearly 80% of the country’s labour force is employed in the primary sector. The country has a relatively low Gross Domestic Product (GDP) per head and a relatively low Human Development Index (HDI) value as shown in Table 1. This limits the amount that people in Madagascar save. © UCLES 2018 0455/22/M/J/18 3 Table 1 GDP per head and HDI in selected countries in 2015 | Country | GDP per head (US$) | HDI | | --- | --- | --- | | Argentina | 22 400 | 0.836 | | Bangladesh | 3 600 | 0.570 | | Cuba | 10 200 | 0.769 | | Egypt | 11 500 | 0.690 | | Ghana | 4 300 | 0.579 | | Madagascar | 1 500 | 0.510 | Half of Madagascar’s population live in poverty. The government is trying to reduce poverty by introducing a programme of cash benefits. It is hoped that one effect of this will be to increase school enrolment and attendance of the children of poor families. To increase economic growth, the government has sold off a number of state-owned enterprises and is moving the economy towards a market system. (a) Identify two fixed costs of production in Fig. 1. [2] (b) Explain, using information from the extract, two reasons why a rise in the price of vanilla might not cause an increase in the price of ice cream. [4] (c) Analyse, using a demand and supply diagram, the effect of an increase in income on the market for ice cream. [5] (d) Analyse the extent to which the relationship shown in Table 1 between countries’ GDP per head and their HDI value is the expected one. [4] (e) Discuss whether or not a government should encourage people to save more. [5] (f) Explain, using information from the extract, how cash benefits given to the poor can reduce poverty. [4] (g) Discuss whether or not a market system benefits consumers. [6] © UCLES 2018 0455/22/M/J/18 [Turn over 4 Section B Answer any three questions in this section. 2 Swaziland is a small African country where six in ten people live in poverty and most firms are small and use little capital equipment. In October 2015 Swaziland opened a new airport. Some economists suggest that the building of the airport involv

FAQs

What sections and question requirements does the paper include?

Candidates answer Question 1 in Section A. In Section B, candidates answer any three questions from Questions 2 to 4. Marks for each part are given in brackets at the end of each question or part question.

How does the paper test analysis of market changes using demand and supply?

It asks candidates to analyse effects on the ice cream market from changes in input prices and, separately, to use a demand and supply diagram to assess how an increase in income affects equilibrium outcomes.

What topics are covered in Section B questions?

Section B addresses opportunity costs and external costs from building and expanding an airport, economies of scale for farms and discussion of primary-product production, and UK bus transport falls in demand including substitute effects, monopoly pricing, elasticity and government subsidy decisions.

Oct 23, 2026

Uploaded by Ivy