Economics 2281 · O Level · Firms' costs, revenue and objectives
Firms' costs, revenue and objectives — practice question
Singapore is often placed among the top countries in which to do business. It has an open economy based on free trade. It has a record of strong entrepreneurship, low unemployment, low average costs and relatively low tax rates. Its example may prompt other countries to remove trade barriers.
(a)[2]
Define ‘average costs’.
(b)[4]
Explain two factors that would raise the supply of entrepreneurs in an economy.
(c)[6]
Analyse how the market for a product would change after a reduction in the tax on the product together with a fall in the price of a complement.
(d)[8]
Discuss whether low unemployment in a country would encourage multinational companies (MNCs) to establish there.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Total cost divided by output” …