test

Question 1

what is international trade

Answer 1

an exchange involving a good or service conducted between at least two different countries. The exchanges can be imports or exports.

Question 2

what is ad volarem

Answer 2

tax based on the assessed value of an item, such as real estate or personal property.

Question 3

what is marginal cost

Answer 3

the cost of producing one extra unit

Question 4

what is collusion

Answer 4

the collaboration between companies that seek to gain an extensive competitive advantage in the marketplace.

Question 5

what is it called when all products are local

Answer 5

import substitution

Question 6

2 types of collusions

Answer 6

cartels and price leadership

Question 7

what is a natural monopoly

Answer 7

• high development costs prevent others from entering the market therefore government provides the product
• costs billions of rands to buil amd maintain power stations therefore there are no other suppliers

Question 8

what is an artificial monopoly

Answer 8

-barriers to entry are not economic in nature
-an example of a barrier is a patent

Question 9

reasons for import substitution

Answer 9

increased employment
-local workers rather than foreign are employed to produce goods that substitute foreign goods
-will stimulate economic growth
more choice
- because some goods are no longer imported amd foreign exchange that becomes available can be used for imports increasing consumers choice
diversification
-domestic economy becomes more diversivied by producing a greater variety of goods locally
-domestic economy will become less vulnerable to foreign actions such as price increases of foreign goods