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ClassTools Premium membership gives access to all templates, no advertisements, personal branding and many other benefits!
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| Question | Answer |
| Is the PES of vegetables generally below or above 1? | Below 1 |
| Which type of good will people buy more of when incomes are falling, normal or inferior? | Normal |
| Is Starbucks a Monopolist or an Oligopolist? | An oligopolist |
| What is the equation for Average Revenue | Total revenue divided by output |
| An airport gets built in a small city. Give one positive and one negative externality of the airport? | Jobs, noise pollution or similar examples |
| What is the definition of price elasticity of supply? | change in quantity demanded divided by change in price |
| What is the difference between a merger and a takeover? | Two firms become one/two firms join to make a bigger firm |
| If a firm has high stock levels for a product, will the supply of that product be elastic or inelastic? | Inelastic |
| Give one example of market failure | e.g. underprovision of merit goods |
| Will an depreciation in the exchange rate definitely cause an improvement in the balance of payments? Why/why not? | No, because it depends upon the elasticity of imports and exports. |
| Why are tariffs a form of protectionism? | They increase the price of imports compared to the price of exports. |
| Give one example of a multinational company? | Correct example given |
| What is the term used to describe long term aid? | Development aid |
| Give one danger of a merger? | Too much power |
| Give one way that the government can promote competition | e.g. encourage small firms |
| Why might contractionary fiscal policy reduce a balance of payments deficit? | It would reduce demand for imports (which is a component of AD) |
| What is one disadvantage of a trading bloc? | E.g. will become too dependent on trading partners |
| What sort of policy is it called when you increase interest rates? | Tight monetary policy |
| What type of unemployment will probably be quite high in a recession? | Cyclical unemployment |
| What is one advantage of FDI to a developing country? | E.g. more jobs |
| What is the definition of a Multinational Company? | A company that operates in a number of different countries |
| Give one reason for the increase in international trade over the last 40 years? | e.g. increase in air travel |
| Name one real life trading bloc | e.g. the EU |
| Define protectionism | Protecting domestic industry from foreign competition |
| Give one disadvantage to an economy of relying on exporting commodities | e.g. wild price fluctuations |