Economics Notes

Question 1

Give one example of a factor that could make a product price insensitive.

Answer 1

If it is a necessity // if there aren’t many substitutes (aka USP is strong)

Question 2

Give one example of a price insensitive product.

Answer 2

Petrol // High quality products // Unique goods/services //

Question 3

Give 3 stakeholders in any business.

Answer 3

Workers // Owners // Customers

Question 4

Give 2 examples of negative externalities.

Answer 4

Water pollution -> less fish - > less income // More cars -> more pollution -> more global warming // Local takeaway -> more litter -> more time cleaning up for residents and money spent by council // New bypass -> woodland destroyed -> habitats dead/residents views spoiled

Question 5

Give 2 examples of positive externalities.

Answer 5

More public landscaped gardens -> area value increases -> inhabitants richer // Christmas lights -> more customers to see them -> local businesses benefit // Investment in railway -> less congestion -> drivers benefit/world benefits/less pollution (air and noise)

Question 6

Why do businesses take care of their externalities?

Answer 6

So they can say they are aware and attract customers, as well as the pressure to watch out and do so from pressure groups or the government, and so they can assure business from the locals and keep them happy