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Question 1

monopoly power Market failure

Answer 1

consumers can be exploited by high prices

Question 2

monopoly power no market failure

Answer 2

profits invested into research and development nd innovation and benefits consumers in the long run

Question 3

merit goods

Answer 3

goods which are under consumed because of positive externalities or information gaps

Question 4

demerit goods

Answer 4

good which are over consumed because of negative externalities or information gaps

Question 5

occupational immobility

Answer 5

when workers can’t move between jobs because they lack the skills needed. leads to structural unemployment

Question 6

geographical immobility

Answer 6

a source of factor immobility that means workers have difficulty in moving to locations where jobs are available for reasons such as lack of affordable housing or family commitments

Question 7

factors of production

Answer 7

a country’s productive economic resources, divided into capital, enterprise, land and labour

Question 8

inequitable distribution of wealth

Answer 8

unfair

Question 9

positive statements

Answer 9

can be tested

Question 10

normative statements

Answer 10

opinions (contain value judgements)