Specimen 2014 Flashcards
1
Q
A
B
D would be incorrect becuase the question asks for average costs not total costs.
2
Q
A
A
Monopsony employs labour where MRP=MC and pays a wage equal to average cost (AC)
3
Q
A
A
The underproduction is more severe than the unserconsumption so a subsidy should be given.
4
Q
A
A
Gov. bonds are long term bonds where as treasury bills are short term bonds.
5
Q
A
B
Increase in national income (GDP) = 1/(MPS) x injection
i.e. multiplier effect
6
Q
A
D
7
Q
A
C
Maximum output where, marginal returns to labour = 0
8
Q
A
B
Decreased demand for bond; reduces price; increasing yield.
9
Q
A
D
In the short run the firm is still making a profit, so will minimalise it’s loss by staying in the market in the short run.
10
Q
A
A
???
11
Q
A
D
Lower opportunity cost = +export demand
12
Q
A
D
Lack of AD leads creates cyclical unemployment
- AD doesn’t necessarily mean industry decline
