| Question | Answer |
| 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 |
