Final Exam Lists

Question 1

Consumer dec to spend or save based on…6

Answer 1

1. Personality
2. Future spending/family plans
3. Age
4. Income
5. Tax polices - eg incentives to spend/save
6. Availability of credit

Question 2

Business influences on what to produce… 4

Answer 2

1. Skills and experience of operator
2. Consumer demand
3. Specific Business oppurtunities
4. Capital Req. to start up

Question 3

Influences on how much to produce for business 2

Answer 3

1. Consumer demand
2. market research
   Some can respond quickly eg cafe
   Large prod runs for cheaper but lack of capital
   - Harder for startup or new products

Question 4

Business goals 6

Answer 4

1. Maximising profits
2. Shareholder expectations
3. Increasing market share
4. Maximising growth
5. Satisfying
6. Social goals

Question 5

Business contribution to economy 4

Answer 5

1. Economic growth
2. Reduce unemployment
3. Regional development (roads, facilities)
4. Increases productive capacity/living standards
   * Govt encourages privy business through info, training etc.

Question 6

Factors affecting DEMAND 6

Answer 6

1. Price
2. Income
3. Tastes/preferences
4. Price of subs/comps
5. Expected Future prices/income
6. Advertising

Question 7

Factors affecting SUPPLY 7

Answer 7

1. Price of good/expected future price
2. Price of other goods
3. State of technology (efficienty + addaptability)
4. Changes in costs of FOP
5. Quantity Avaliable
6. # of firms in industry
7. Climatic/Seasonal Conditions

Question 8

Factors affecting ELASTICITY of DEMAND 6

Answer 8

1. Necessity/Luxury
2. Existence of close substitutes
3. Proportion of Income Spent
4. Length of time since price change
5. Habit forming
6. Durability

Question 9

Factors affecting ELASTICITY of SUPPLY 3

Answer 9

1. Time after price change (gains elasticity)
2. Ability to hold/store stock
3. Excess capacity

Question 10

Factors affecting DEMAND for LABOUR 4

Answer 10

1. Output of firm
2. Productivity of labour
3. Cost vs. other inputs
4. General economic conds.

Question 11

Factors affecting SUPPLY of LABOUR 5

Answer 11

1. Wage level
2. Working Conditions
3. Experience/Edu requirments
4. Participation rate
5. Geo/Occ Mobility

Question 12

Types of Unemployment

Answer 12

1. Cyclical
2. Structural
3. Long-term
4. Seasonal
5. Frictional
6. Hard-core
7. Hidden
8. Underem

Question 13

Economic Benefits of inequality 5

Answer 13

1. Incentive to upskill/edu
2. Incentive to work longer/harder
3. Makes labour force more mobile.
4. Encourages entrepreneurs to accept risk.
5. Creates opp for savings and capital formation.

Question 14

Economic Costs of Inequality 6

Answer 14

1. Reduces overall utility (1$ more means more to poor)
2. Reduce growth
3. Reduce consumption/Investement
4. Creates conspicuous consumption
5. poverty and social problems
6. Increases cost of Welfare

Question 15

Social Costs of Inequality

Answer 15

1. Wellbeing
2. Poverty
3. Social Class Divisions

Question 16

Reasons for Different wage in different job 3

Answer 16

1. Skills Req
2. Working Conds
3. Occupational Mobility

Question 17

Reasons for wage dif in same job 3

Answer 17

1. Geographic Mobility
2. Productivity
3. Capacity of firm to pay