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  1. Section A
  2.  Answer this question
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  4.  
  5.  1. Lesotho National Development Corporation
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  7.  Since its establishment the Lesotho National Development Corporation (LNDC) has been the Lesotho Government’s main means of promoting industrial development. The LNDC is now expanding its job creation programmed by promoting exports and encouraging firms to grow in size. It also encourages and supports local entrepreneurs. Two of the projects it has supported are local chicken farms and the building of a private hospital. The slogan of the LNDC is ‘We build industry’.
  8.  
  9.  (a) Describe the main role of an entrepreneur. [2]
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  11.  (b) Identify from the passage one project in the primary sector and one project in the secondary sector. [2]
  12.  
  13.  (c) Explain what is meant by industrial development. [4]
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  15.  (d) Explain the policies that a government might use to encourage private businesses. [6]
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  17.  (e) Why might a government wish to create jobs? [6]
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  38.  Section B
  39.  Answer any three questions
  40.  2. Sometimes in an industry a firm buys a smaller competitor which uses similar factors of production. At other times a firm buys another firm which supplies it with the raw materials and other inputs for its production.
  41.  
  42.  (a) Explain what is meant by the factors of production. [4]
  43.  
  44.  (b) Discuss the reasons why some firms remain small. [6]
  45.  
  46.  (c) Identify the types of integration in the two situations described above. [3]
  47.  
  48.  (d) Discuss whether such integration is always beneficial. [7]
  49.  
  50.  3. (a) Distinguish between the private sector and the public sector of an economy. [3]
  51.  
  52.  (b) Discuss the disadvantages of allocating resources through the public sector. [7]
  53.  
  54.  The Singapore government plans to build Asia’s first airport dedicated to serving low-cost airlines. Its estimated cost is $26.5 million and it will be designed to handle about 2.7 million passengers each year.
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  56.  (c) When airports are planned, there are usually some people who campaign to stop them being built. What disadvantages might the building of an airport have? [4]
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  58.  (d) A government is considering paying for a similar airport by either increasing income tax or introducing a specific (flat-rate) tax on air passengers. Discuss which of these you would favour.
  59.  [6]
  60.  4. In the UK four large supermarket companies dominate the sale of food but there are also many small food shops.
  61.  (a) Define a fixed cost and a variable cost, and identify one fixed cost and one variable cost that the supermarket might have. [4]
  62.  
  63.  (b) Discuss why a small food shop might survive when there are very large supermarkets. [6]
  64.  
  65.  (c) How do some firms become large? [4]
  66.  
  67.  (d) Discuss how a supermarket might benefit from economies of scale. [6]
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  76.  5. (a) Using examples, contrast a direct tax with an indirect tax. [4]
  77.  
  78.  (b) Discuss how a government might use taxation to affect the distribution of income. [6]
  79.  
  80.  (c) Explain the concept of price elasticity of demand. Choose two goods and explain why they might have different price elasticities of demand. [6]
  81.  
  82.  (d) Use the concept of elasticity to discuss how indirect taxes may be used by a government to
  83.  
  84.  (i) increase its revenue,
  85.  
  86.  (ii) decrease imports. [4]
  87.  
  88.  6. A multi-national was described as a large company that employs people from different countries and is controlled by a government.
  89.  
  90.  (a) Explain whether this is a correct description. [4]
  91.  
  92.  (b) If a company is large and employs many people it often has to deal with trade unions. What is a trade union and what is its role in an economy? [6]
  93.  
  94.  (c) How might a company become large? [4]
  95.  
  96.  (d) Multi-national car companies are sometimes said to have economies of scale. Analyse what this means for such companies. [6]
  97.  
  98.  7. (a) Explain the difference between an equilibrium price and a disequilibrium price. [4]
  99.  
  100.  (b) Many more people travel by aeroplane today than ten years ago. With the help of a demand and supply diagram, explain what might have happened in the market for air travel to cause this increase. [6]
  101.  
  102.  (c) Define price elasticity of demand and suggest why different goods have different price elasticities. [5]
  103.  
  104.  (d) Discuss whether knowledge of price elasticity of demand is of use to a company selling holiday tours. [5]
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  106.  NOTE: ( its just a sample paper based on importan questions) Do not depend on this sample paper only .
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