Oct/Nov 2008

Why is the demand for OTR tyres said to be a derived demand?

Factors of production

Explain the characteristics that money needs in order to perform its functions effectively.

Oligopoly

Explain the market failure that is caused by the characteristics of public goods.

Behavioural economics

In what way can opportunity cost be used to account for the pattern of international trade?

International trade and free trade

Explain briefly the meaning of economic growth.

Unemployment

Economic analysis of resource allocation assumes consumers are rational. If advertising is present, this analysis has little value. Do you agree with this argument?

Behavioural economics

Explain how knowledge of its long-run average costs could be useful to a profit-maximising firm.

7.5

Explain why a government might want to increase its control over private firms.

Government intervention in markets

The economic theory of wages assumes, first, that there is a perfect market and, second, that the market will move to a stable equilibrium. It therefore has limited relevance in a commercial world characterised by change and uncertainty. Discuss whether you agree with this view.

Long-run costs and economies of scale

Explain the reasons unemployment occurs.

Price stability and inflation

Explain the factors that affect the level of investment in an economy.

Economic growth