lesson 1 - recap

Question 1

what can increase occupational mobility of labour?

Answer 1

investment in training

Question 2

which function of money allows people to trade?

Answer 2

medium of exchange

Question 3

the demand curve for a normal good will shift right if?

Answer 3

the price of a substitute increases

Question 4

when is it likely for the demand for houses to fall?

Answer 4

recession periods

Question 5

what is a likely consequence of the abuse of market power by a monopolist?

Answer 5

misallocation of resources

Question 6

what is a likely feature of a monopoly but not perfect competition?

Answer 6

the ability of the firm influencing the price

Question 7

what is price skimming designed to do?

Answer 7

maximising profits in the early part of a products lifecycle

(firms may price higher at the beginning of the launch of a product to attract people willing to pay that price but then once the hype dies down they drop the prices to attract more people)

Question 8

what is predatory pricing?

Answer 8

forcing firms out of the industry with harshly low prices

Question 9

why cant public goods not be supplied through the price mechanism?

Answer 9

the benefits enjoyed cant be restricted by buyers

Question 10

what is a barrier to entry?

Answer 10

prevents firms from entering the market