EC 1101 Study Questions Fall 2012 Chapter 5 Market failures‚ public goods and externalities 1. Explain the functions of government in an economy. Why do governments intervene in markets? 2. (a) Using the concept of allocative efficiency‚ explain the meaning of “market failure” and “externality”. Why is this is a type of market failure? (b) Explain the difference between the market equilibrium output and the efficient level of output when there are (i) negative externalities and (ii) positive
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Macroeconomics Problems Questions P.68 Think it over 1. What is inflation? 2. How does inflation affect your daily life? 3. As a student‚ you do not have a job. Are you classified as unemployed? 4. How does unemployment affect Hong Kong’s economy? P.68 Think it over (Cartoon) Mom‚ how do inflation and unemployment affect us? P.69 Test yourself 3.1 According to the definitions above‚ are the following situations examples of inflation or deflation? Why? a. Because of technological improvement‚
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15 / Lessons of markets 18 Chapter 2: Incentives Matter • Explain how each of the following relates to efficient outcomes in a market economy: - adverse selection - “perverse incentives” - principal-agent problem‚ - the prisoner’s dilemma. Wrong incentives lead to undesirable outcomes 23 / Creative destruction 36 / Tax & govt program disincentives 38 Chapter 3: Government and the Economy • In your own words‚ explain what an externality is. • Besides addressing externalities‚ what
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some countries while it is low in others? why do prices rise rapidly sometimes and are stable at other times? Why does production and employment rise in some years and decline in others? What can the government do to increase economic growth‚ lower inflation and increase employment? By contrast‚ microeconomics deals with the economic decisions of individuals (a typical consumer‚ a single firm‚ etc.) and how they interact with one another in the market. For example: the decision by a firm to buy or not
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together. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 3 printed pages and 1 blank page. DC (SM/SW) 19276/2 © UCLES 2010 [Turn over 2 Section A Answer this question. 1 Inflation in Paraguay Paraguay is a small South American country with few of the advantages that bigger‚ better known economies such as Venezuela and Brazil enjoy. In January 2008 Paraguay updated its Consumer Price Index (CPI) with new weights based on the
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International Finance Homework Solution Chapter 1 2. Comparative Advantage. a. Explain how the theory of comparative advantage relates to the need for international business. ANSWER: The theory of comparative advantage implies that countries should specialize in production‚ thereby relying on other countries for some products. Consequently‚ there is a need for international business. b. Explain how the product cycle theory relates to the growth of an MNC. ANSWER: The product
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Econ 302 Name:_____________________ Fall 2014 Problem Set 1 (Thursday September 18‚ 2014 In class – no extensions) Please Print and Answer in the Provided Space 1) Consider the following estimates for an iPad sold in Canada in 2010: retail price $550 (say at Best Buy)‚ Apple (a U.S. corporation) wholesale price $475‚ Apple intermediate costs $385. Of Apple’s intermediate costs‚ $100 was wholly produced by U.S. manufacturers‚ and $285 from other foreign producers. Suppose the production chain was
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growth rate of GDP deflator between 1996 and 1997? What was real GDP in 1996? What was real GDP in 1997? What was the growth rate of real GDP between 1996 and 1997? Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain. 4. *Some countries emphasized on GNP rather than GDP as a measure of economic well-being. Which measure should the government prefer if it cares about the total income of their citizens? Which measure should it prefer if it cares about the total
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CHAPTER 1: INTRODUCTION 1.1 History of Islamic Banking in Malaysia Islamic banks today exist in all parts of the world and are looked upon as a viable alternative system which has many things to offer. While it was initially developed to fulfill the needs of Muslims‚ Islamic banking has now gained universal acceptance. In Malaysia‚ the first Islamic bank is Bank Islam Malaysia Berhad (BIMB). Operated as the only Islamic bank for 10 years since July 1983 before the government allowed
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EXERCISES FOR MICROECONOMICS TOPIC 1 Economics: An Introduction (Chapters 1 & 2 in the Textbook) EXPLAIN THE FOLLOWINGTERMS ◎ Average benefit ◎ Average cost ◎ Economic surplus ◎ Economics ◎ Microeconomics ◎ Macroeconomics ◎ Marginal benefit ◎ Marginal cost ◎ Normative economics ◎ Positive economics ◎ Rational person ◎ Sunk cost ◎ Opportunity cost ◎ Absolute advantage ◎ Comparative advantage ◎ Attainable point ◎ Unattainable point ◎ Efficient point ◎ Inefficient
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