Cambridge IGCSE™(9–1)
ECONOMICS 0987/21
Paper 2 Structured Questions May/June 2024
2 hours 15 minutes
You must answer on the enclosed answer booklet.
* 0 8 3 9 7 5 0 6 4 0 *
You will need: Answer booklet (enclosed)
INSTRUCTIONS
● Answer four questions in total:
Section A: answer Question 1.
Section B: answer three questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.
● You may use a calculator.
INFORMATION
● The total mark for this paper is 90.
● The number of marks for each question or part question is shown in brackets [ ].
This document has 8 pages. Any blank pages are indicated.
DC (WW) 340425
© UCLES 2024 [Turn over
, 2
Section A
Read the source material carefully before answering Question 1.
Source material: What does the future hold for Nicaragua?
Nicaragua fact file 2020
Population 6.5m
Labour force 3.1m
Unemployment rate 4.8%
Economic growth rate – 4.3%
Agricultural exports as a percentage of total exports 60.0%
Nicaragua is the largest country in Central America. It has a large agricultural sector with one of its
main exports being coffee. It has been estimated that a 10% change in the price of coffee will cause a
3% change in the quantity of coffee demanded. The country’s agricultural output, including coffee, is
often affected by natural disasters including droughts and earthquakes.
Nicaragua is the country with the lowest Gross Domestic Product (GDP) per head in Central America.
Wages are particularly low in the rural areas of the country. There is a high degree of income
inequality and firms tend to earn lower profits than in other Central American countries. The number of
Nicaraguans who were willing and able to work but could not find a job increased as calculated by both
the claimant count and the labour force survey in 2020.
The purchasing power of Nicaraguan consumers fell in 2020 as prices rose by more than incomes.
However, the country’s currency, the cordoba, was still generally acceptable. It continued to act as a
medium of exchange and store of value.
Nicaragua’s future economic performance will be influenced by a number of factors. These include
the proportion of the labour force employed in agriculture, the size of the country’s firms and what the
country produces. Table 1.1 shows the percentage of the labour force employed in agriculture and
GDP per head in selected countries in 2020.
Table 1.1 The percentage of the labour force employed in agriculture and GDP per head in
selected countries in 2020
Country Labour force employed in GDP per head ($)
agriculture (%)
Bahamas 3 25 194
Barbados 10 15 374
Costa Rica 14 12 141
Dominica 40 7 004
Nicaragua 31 1 905
Saint Lucia 22 8 805
Nicaraguan firms tend to be relatively small. These firms often get to know their individual customers’
requirements but many are not large enough to benefit from economies of scale. In recent years, there
has been a boom in coffee shops in Nicaragua. Between 2015 and 2020, the number of coffee shops
more than doubled in the country. These shops differentiate themselves through their customer service
and the quality of the coffee they serve.
Nicaragua is the world’s twelfth largest producer of coffee. Global coffee consumption continues to
increase. This trend may increase Nicaragua’s coffee output and exports.
© UCLES 2024 0987/21/M/J/24
ECONOMICS 0987/21
Paper 2 Structured Questions May/June 2024
2 hours 15 minutes
You must answer on the enclosed answer booklet.
* 0 8 3 9 7 5 0 6 4 0 *
You will need: Answer booklet (enclosed)
INSTRUCTIONS
● Answer four questions in total:
Section A: answer Question 1.
Section B: answer three questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.
● You may use a calculator.
INFORMATION
● The total mark for this paper is 90.
● The number of marks for each question or part question is shown in brackets [ ].
This document has 8 pages. Any blank pages are indicated.
DC (WW) 340425
© UCLES 2024 [Turn over
, 2
Section A
Read the source material carefully before answering Question 1.
Source material: What does the future hold for Nicaragua?
Nicaragua fact file 2020
Population 6.5m
Labour force 3.1m
Unemployment rate 4.8%
Economic growth rate – 4.3%
Agricultural exports as a percentage of total exports 60.0%
Nicaragua is the largest country in Central America. It has a large agricultural sector with one of its
main exports being coffee. It has been estimated that a 10% change in the price of coffee will cause a
3% change in the quantity of coffee demanded. The country’s agricultural output, including coffee, is
often affected by natural disasters including droughts and earthquakes.
Nicaragua is the country with the lowest Gross Domestic Product (GDP) per head in Central America.
Wages are particularly low in the rural areas of the country. There is a high degree of income
inequality and firms tend to earn lower profits than in other Central American countries. The number of
Nicaraguans who were willing and able to work but could not find a job increased as calculated by both
the claimant count and the labour force survey in 2020.
The purchasing power of Nicaraguan consumers fell in 2020 as prices rose by more than incomes.
However, the country’s currency, the cordoba, was still generally acceptable. It continued to act as a
medium of exchange and store of value.
Nicaragua’s future economic performance will be influenced by a number of factors. These include
the proportion of the labour force employed in agriculture, the size of the country’s firms and what the
country produces. Table 1.1 shows the percentage of the labour force employed in agriculture and
GDP per head in selected countries in 2020.
Table 1.1 The percentage of the labour force employed in agriculture and GDP per head in
selected countries in 2020
Country Labour force employed in GDP per head ($)
agriculture (%)
Bahamas 3 25 194
Barbados 10 15 374
Costa Rica 14 12 141
Dominica 40 7 004
Nicaragua 31 1 905
Saint Lucia 22 8 805
Nicaraguan firms tend to be relatively small. These firms often get to know their individual customers’
requirements but many are not large enough to benefit from economies of scale. In recent years, there
has been a boom in coffee shops in Nicaragua. Between 2015 and 2020, the number of coffee shops
more than doubled in the country. These shops differentiate themselves through their customer service
and the quality of the coffee they serve.
Nicaragua is the world’s twelfth largest producer of coffee. Global coffee consumption continues to
increase. This trend may increase Nicaragua’s coffee output and exports.
© UCLES 2024 0987/21/M/J/24
