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Questions and Answers

What is the primary objective of a firm in a perfect market?

  • To maximize profit (correct)
  • To minimize losses
  • To increase market share
  • To reduce competition

    • What characterizes products in a perfectly competitive market?

  • Specialized
  • Homogeneous (correct)
  • Customized
  • Differentiated

    • What is a characteristic of a perfectly competitive market?

  • Monopoly power
  • Government regulation
  • Price fixing
  • Freedom of entry and exit (correct)

    • What is the role of an individual business in a perfectly competitive market?

    <p>Price taker</p> Signup and view all the answers

    What is the focus of businesses in perfectly competitive markets?

    <p>Revenue and cost concepts</p> Signup and view all the answers

    What is an industry in a perfectly competitive market?

    <p>A group of businesses producing identical products</p> Signup and view all the answers

    In a perfectly competitive market, a firm will increase production if:

    <p>MR exceeds MC</p> Signup and view all the answers

    What is a characteristic of a monopoly?

    <p>A single company controlling the entire supply of a product or service</p> Signup and view all the answers

    What is the goal of government policies in promoting perfect competition?

    <p>To prevent monopolies and enhance economic efficiency</p> Signup and view all the answers

    What is the demand curve shape for an oligopolist?

    <p>Kinked</p> Signup and view all the answers

    What is the primary goal of firms in imperfect markets?

    <p>To maximize profits</p> Signup and view all the answers

    What happens to economic profits in the long run in a monopolistically competitive market?

    <p>They tend to normalize</p> Signup and view all the answers

    What is a characteristic of a monopoly?

    <p>A single firm dominating the entire market</p> Signup and view all the answers

    What is the consequence of imperfect markets on economic welfare?

    <p>Welfare losses to society due to underutilization of resources</p> Signup and view all the answers

    Why do monopolies generate sustained profits in the long term?

    <p>Because new entrants cannot easily overcome barriers to entry</p> Signup and view all the answers

    What is a characteristic of oligopolies?

    <p>A few firms selling homogeneous or differentiated products</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earning normal profits</p> Signup and view all the answers

    What is the consequence of monopolies and oligopolies on prices and output?

    <p>Lower output and higher prices</p> Signup and view all the answers

    What is the primary purpose of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of interventions aimed at correcting market failures</p> Signup and view all the answers

    What is protectionism in the context of international trade?

    <p>A government action that restricts or restrains international trade to protect local businesses and jobs</p> Signup and view all the answers

    What is one of the arguments in favor of free trade?

    <p>Access to a wider variety of goods and services at lower prices</p> Signup and view all the answers

    What is the main objective of South Africa's export promotion policies?

    <p>To increase participation in the global market and encourage local firms to export</p> Signup and view all the answers

    What is the focus of the unit on economic growth and development?

    <p>Exploring strategies for economic growth and development, particularly in South Africa</p> Signup and view all the answers

    What is a key challenge addressed in the unit on economic growth and development?

    <p>The North/South divide and income inequality</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To increase market competition and reduce inefficiencies</p> Signup and view all the answers

    What type of goods are often underprovided in private markets due to the difficulty of charging users?

    <p>Public goods</p> Signup and view all the answers

    What is the result of imperfect competition in markets?

    <p>Higher prices and reduced output</p> Signup and view all the answers

    What is the consequence of asymmetric information in markets?

    <p>Choices that do not maximize welfare</p> Signup and view all the answers

    What is the primary cause of productive inefficiency in markets?

    <p>Not using resources to their full potential</p> Signup and view all the answers

    What is the result of government intervention to correct market failures?

    <p>Corrected market failures and improved efficiency</p> Signup and view all the answers

    What does economic growth refer to?

    <p>An increase in a country's real GDP per capita over time</p> Signup and view all the answers

    What is the main goal of the demand-side approach to economic growth?

    <p>To stimulate economic activity through government spending</p> Signup and view all the answers

    What is import substitution in the context of economic growth?

    <p>Encouraging the production of goods domestically</p> Signup and view all the answers

    What is a key aspect of the supply-side approach to economic growth?

    <p>Improving the quality of the labor force</p> Signup and view all the answers

    What is the primary focus of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs and developing human resources</p> Signup and view all the answers

    What is the key difference between the North and the South in terms of economic development?

    <p>Income levels and economic stability</p> Signup and view all the answers

    What is the focus of the New Growth Path (NGP) in South Africa?

    <p>Job creation and identifying job drivers</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>Market-led growth and fiscal and monetary discipline</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Health, education, and income outcomes</p> Signup and view all the answers

    What is the main characteristic of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Aims to halve unemployment and poverty</p> Signup and view all the answers

    What is the characteristic of a perfect market that prevents single entities from influencing market prices?

    <p>Homogeneous products</p> Signup and view all the answers

    What is the distinction between an industry and an individual business?

    <p>Multiple businesses vs. single business</p> Signup and view all the answers

    What is the focus of revenue metrics in perfectly competitive markets?

    <p>Maximizing profits</p> Signup and view all the answers

    What is the impact of freedom of entry and exit in perfectly competitive markets?

    <p>No single entity can wield undue influence</p> Signup and view all the answers

    What is the significance of perfect information in perfectly competitive markets?

    <p>It ensures that no single entity has undue influence</p> Signup and view all the answers

    What is the primary objective of a firm in a perfect market?

    <p>Maximize profits</p> Signup and view all the answers

    What occurs when the marginal cost of producing an additional unit equals the marginal revenue obtained from selling that unit?

    <p>The firm is in a state of equilibrium and profits are maximized</p> Signup and view all the answers

    What is the purpose of government policies in promoting perfect competition?

    <p>To prevent monopolies and foster fair competition</p> Signup and view all the answers

    What is a characteristic of imperfect markets?

    <p>Lack of perfect competition</p> Signup and view all the answers

    What type of market structure is characterized by a few firms dominating a market?

    <p>Oligopoly</p> Signup and view all the answers

    What is the result of the interplay of cost and revenue curves in imperfect markets?

    <p>Firms maximize profits where marginal revenue equals marginal cost</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earn normal profits but no economic profits</p> Signup and view all the answers

    What is a characteristic of an oligopoly?

    <p>Firms are interdependent and influence each other's decisions</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earn normal profits</p> Signup and view all the answers

    What is a consequence of monopolies and oligopolies on prices and output?

    <p>Prices increase and output decreases</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To protect consumer interests</p> Signup and view all the answers

    What is a characteristic of a monopoly?

    <p>A single firm dominates the market</p> Signup and view all the answers

    What is a result of imperfect markets?

    <p>Allocative and productive inefficiency</p> Signup and view all the answers

    What is the primary purpose of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of interventions</p> Signup and view all the answers

    What is protectionism in the context of international trade?

    <p>Government actions that restrict or restrain international trade</p> Signup and view all the answers

    What is one of the arguments in favor of free trade?

    <p>It increases the potential for economic growth through expanded markets and investment opportunities</p> Signup and view all the answers

    What is the main objective of South Africa's export promotion policies?

    <p>To encourage local firms to export their goods, thereby increasing participation in the global market</p> Signup and view all the answers

    What is import substitution in the context of economic growth?

    <p>Encouraging local production of goods that were previously imported to strengthen domestic industries and reduce dependency on foreign goods</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To increase market competition and reduce inefficiencies</p> Signup and view all the answers

    What is the focus of the unit on economic growth and development?

    <p>To explore the strategies and methods employed by governments to foster economic growth and development</p> Signup and view all the answers

    What is a characteristic of public goods?

    <p>They are non-excludable and non-rivalrous</p> Signup and view all the answers

    What is a consequence of imperfect distribution of income and wealth?

    <p>Skewed production towards high-end goods and services</p> Signup and view all the answers

    What is a type of market failure that arises when the production or consumption of goods and services imposes costs or benefits on others?

    <p>Externalities</p> Signup and view all the answers

    What is a result of imperfect competition in markets?

    <p>Higher prices and reduced output</p> Signup and view all the answers

    What is a consequence of market failures in terms of economic welfare?

    <p>Net social welfare loss</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth only considers GDP, while economic development considers standards of living and income equity</p> Signup and view all the answers

    Which of the following is a demand-side approach to economic growth?

    <p>Increased government expenditure</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs and developing human resources</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Standard of living, health, education, and income</p> Signup and view all the answers

    Which of the following approaches is used to stimulate economic growth by encouraging domestic production?

    <p>Import substitution</p> Signup and view all the answers

    What is the primary characteristic of the North-South divide?

    <p>A significant disparity in income levels and economic stability</p> Signup and view all the answers

    What is the primary goal of the supply-side approach to economic growth?

    <p>Improving the quality of the labor force</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>Job creation and identifying job drivers</p> Signup and view all the answers

    Which of the following is a characteristic of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Targeting halving unemployment and poverty</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>Aims at market-led growth, fiscal and monetary discipline, and enhancing investor confidence</p> Signup and view all the answers

    What is the main reason for the absence of price manipulation in perfect markets?

    <p>Perfect information and freedom of entry and exit</p> Signup and view all the answers

    Which of the following is true about individual businesses in perfect markets?

    <p>They are price takers and have no control over market prices</p> Signup and view all the answers

    What is the primary goal of a firm in a perfect market?

    <p>To maximize profits</p> Signup and view all the answers

    What is the effect of homogeneous products in perfect markets?

    <p>It ensures that no single entity can dominate the market</p> Signup and view all the answers

    What is the significance of complete mobility of factors of production in perfect markets?

    <p>It ensures resource allocation efficiency</p> Signup and view all the answers

    What is the role of revenue metrics in perfect markets?

    <p>To focus on output levels and pricing strategies</p> Signup and view all the answers

    What is the condition under which a firm should increase production to enhance profits?

    <p>When MR exceeds MC</p> Signup and view all the answers

    What is the long-term outcome of firms in perfectly competitive markets?

    <p>Normal profits</p> Signup and view all the answers

    What is the primary characteristic of monopolistic competition?

    <p>Multiple firms selling differentiated products</p> Signup and view all the answers

    What is the shape of the demand curve for an oligopolist?

    <p>Kinked</p> Signup and view all the answers

    What is the goal of government policies in promoting perfect competition?

    <p>To prevent monopolies and promote fair competition</p> Signup and view all the answers

    What is the effect of imperfect markets on economic welfare?

    <p>It results in inefficient allocation of resources</p> Signup and view all the answers

    What is the primary objective of cost-benefit analysis in public policy?

    <p>To evaluate whether the benefits of a project or regulation exceed its costs</p> Signup and view all the answers

    Which of the following is an argument in favor of protectionism?

    <p>To safeguard jobs against cheaper imported goods</p> Signup and view all the answers

    What is the primary focus of South Africa's export promotion policies?

    <p>To increase participation in the global market</p> Signup and view all the answers

    What is the primary distinction between economic growth and development?

    <p>Economic growth refers to an increase in GDP, while development refers to an improvement in the quality of life</p> Signup and view all the answers

    Which of the following is a benefit of free trade?

    <p>Promoting the production of goods for which a country has a comparative advantage</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To correct market failures</p> Signup and view all the answers

    What is the primary reason why imperfect markets result in allocative and productive inefficiencies?

    <p>Firms produce less at higher costs</p> Signup and view all the answers

    What is a key cause of market failures?

    <p>Externalities</p> Signup and view all the answers

    How do governments often intervene in imperfect markets?

    <p>Through regulations and antitrust laws</p> Signup and view all the answers

    What is the key feature of an oligopoly?

    <p>A few firms are interdependent</p> Signup and view all the answers

    What is a consequence of asymmetric information in markets?

    <p>Choices that do not maximize welfare</p> Signup and view all the answers

    What is a type of goods that are often underprovided in private markets?

    <p>Public goods</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earn normal profits</p> Signup and view all the answers

    What is a result of government intervention to correct market failures?

    <p>Correcting allocative inefficiencies</p> Signup and view all the answers

    What is the primary consequence of monopolies and oligopolies on prices and output?

    <p>Higher prices and lower output</p> Signup and view all the answers

    What is a characteristic of imperfect competition?

    <p>A few firms dominating the market</p> Signup and view all the answers

    Why do firms in imperfect markets often engage in non-price competition?

    <p>To differentiate their products and build customer loyalty</p> Signup and view all the answers

    What is a consequence of market failures on economic welfare?

    <p>Net social welfare loss</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development includes improvements in standards of living</p> Signup and view all the answers

    Which of the following is an example of a demand-side approach to economic growth?

    <p>Increasing government expenditure to stimulate economic activity</p> Signup and view all the answers

    What is the primary goal of import substitution in the context of economic growth?

    <p>To promote domestic industries and retain economic benefits</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Investing in infrastructure and technology to enhance production capacity</p> Signup and view all the answers

    What is the primary focus of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs and developing human resources</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>A significant disparity in economic stability between developed and developing countries</p> Signup and view all the answers

    What is the main goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>To promote market-led growth and enhance investor confidence</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Standard of living, including health, education, and income</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To halve unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    What is the characteristic of the New Growth Path (NGP) in South Africa?

    <p>Focus on job creation and identifying job drivers like infrastructure and agriculture</p> Signup and view all the answers

    In a perfectly competitive market, what happens when MR equals MC?

    <p>The firm reaches equilibrium and maximizes profits</p> Signup and view all the answers

    What is a key characteristic of imperfect markets?

    <p>Firms can influence market prices</p> Signup and view all the answers

    What is the primary goal of government policies in perfect competition?

    <p>To prevent monopolies and promote competition</p> Signup and view all the answers

    What is the primary characteristic of products in a perfect market?

    <p>Homogeneous</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To promote social welfare and reduce inefficiencies</p> Signup and view all the answers

    What ensures maximum efficiency and equitable resource distribution in a perfect market?

    <p>Lack of differentiation and perfect information</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earn normal profits</p> Signup and view all the answers

    What is a characteristic of oligopolies?

    <p>Firms engage in non-price competition</p> Signup and view all the answers

    What is an example of a negative externality?

    <p>Pollution</p> Signup and view all the answers

    What is the role of individual businesses in a perfect market?

    <p>Price taker</p> Signup and view all the answers

    What is a characteristic of public goods?

    <p>They are non-excludable and non-rivalrous</p> Signup and view all the answers

    What is a key dynamic in imperfect markets?

    <p>Firms face different revenue and cost curves</p> Signup and view all the answers

    What is the significance of complete mobility of factors of production in a perfect market?

    <p>It ensures efficient allocation of resources</p> Signup and view all the answers

    What is the focus of cost concepts in decision-making for businesses in perfect markets?

    <p>Making output and pricing decisions</p> Signup and view all the answers

    What is a consequence of asymmetric information in markets?

    <p>Choices that do not maximize welfare</p> Signup and view all the answers

    What is the outcome of perfect competition in a market?

    <p>Maximum efficiency and equitable resource distribution</p> Signup and view all the answers

    What is a cause of market failures?

    <p>Externalities</p> Signup and view all the answers

    What is a consequence of imperfect competition in markets?

    <p>Higher prices and reduced output</p> Signup and view all the answers

    What is a key feature of oligopolies?

    <p>Interdependence of firms</p> Signup and view all the answers

    What is a result of imperfect markets?

    <p>Allocative and productive inefficiencies</p> Signup and view all the answers

    What is a characteristic of monopolistic competition?

    <p>Many firms sell differentiated products</p> Signup and view all the answers

    What is the purpose of government intervention in markets with monopolies and oligopolies?

    <p>To enhance competitive outcomes and protect consumer interests</p> Signup and view all the answers

    What is a result of monopolies and oligopolies on prices and output?

    <p>Higher prices and lower output</p> Signup and view all the answers

    What is a key difference between monopolies and monopolistic competition?

    <p>Degree of product differentiation</p> Signup and view all the answers

    What is the main objective of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of a project</p> Signup and view all the answers

    What is the primary reason for implementing protectionist policies?

    <p>To protect local industries and jobs</p> Signup and view all the answers

    What is one of the benefits of free trade?

    <p>Enhanced consumer choice</p> Signup and view all the answers

    What is the focus of South Africa's export promotion policies?

    <p>To increase exports</p> Signup and view all the answers

    What is the main difference between economic growth and development?

    <p>Economic growth focuses on economic efficiency, while development focuses on income redistribution</p> Signup and view all the answers

    What is a key challenge addressed in the unit on economic growth and development?

    <p>Economic inequality</p> Signup and view all the answers

    What is the primary focus of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs, developing human resources, and building the economy</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development encompasses broader aspects of well-being</p> Signup and view all the answers

    What is the primary goal of the supply-side approach to economic growth?

    <p>Improving the quality of the labor force and accumulating capital goods</p> Signup and view all the answers

    What is the main characteristic of the North/South Divide in terms of economic development?

    <p>A significant disparity in income levels and access to resources between the North and South</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Halving unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>Job creation and identifying job drivers like infrastructure and agriculture</p> Signup and view all the answers

    What is the main characteristic of the Human Development Index (HDI)?

    <p>A composite measure of health, education, and income</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>Aiming at market-led growth and enhancing investor confidence</p> Signup and view all the answers

    What is import substitution in the context of economic growth?

    <p>Encouraging the production of goods domestically that would otherwise be imported</p> Signup and view all the answers

    What is the primary focus of the demand-side approach to economic growth?

    <p>Increasing government expenditure to stimulate economic activity and redistributing income</p> Signup and view all the answers

    What is a direct consequence of the lack of differentiation between goods sold by different sellers in a perfectly competitive market?

    <p>No single entity can wield undue influence over the market.</p> Signup and view all the answers

    What is the primary role of total revenue (TR) in decision-making for businesses in perfectly competitive markets?

    <p>To maximize profits</p> Signup and view all the answers

    What is a characteristic of individual businesses in perfectly competitive markets?

    <p>They have no influence over the market price.</p> Signup and view all the answers

    What is the ultimate goal of a firm's decision-making process in a perfectly competitive market?

    <p>To maximize profits</p> Signup and view all the answers

    What is the significance of freedom of entry and exit in perfectly competitive markets?

    <p>It ensures that no single entity can wield undue influence over the market.</p> Signup and view all the answers

    What is a key distinction between an industry and an individual business in a perfectly competitive market?

    <p>An industry comprises multiple businesses producing identical products.</p> Signup and view all the answers

    What is the primary characteristic of a monopoly that allows it to influence market prices?

    <p>Barriers to entry</p> Signup and view all the answers

    What is the result of the interdependence of firms in an oligopoly?

    <p>Price fixing and collusive practices</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Normal profits</p> Signup and view all the answers

    What is the consequence of imperfect markets on economic welfare?

    <p>Welfare losses to society</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To enhance competitive outcomes</p> Signup and view all the answers

    What is a characteristic of imperfect markets that can lead to higher prices and lower output?

    <p>Barriers to entry</p> Signup and view all the answers

    What is the primary cause of market failures due to imperfect distribution of income and wealth?

    <p>Overconsumption of high-end goods and services</p> Signup and view all the answers

    What is a consequence of asymmetric information in markets?

    <p>Choices that do not maximize welfare</p> Signup and view all the answers

    What is a type of market failure that arises when the production or consumption of goods and services impose costs or benefits on others?

    <p>Externalities</p> Signup and view all the answers

    What is a consequence of government intervention to correct market failures?

    <p>Reduced market failures and increased economic efficiency</p> Signup and view all the answers

    What is a characteristic of public goods that leads to underproduction in private markets?

    <p>Non-excludability and non-rivalry</p> Signup and view all the answers

    What is a type of market failure that occurs when labor, capital, or other resources cannot move freely to where they are most needed?

    <p>Immobility of factors of production</p> Signup and view all the answers

    What is the primary driver of the dynamic equilibrium in perfectly competitive markets?

    <p>Profit and loss considerations</p> Signup and view all the answers

    What is the implication of the kinked demand curve for oligopolists?

    <p>Firms maintain a dual pricing strategy</p> Signup and view all the answers

    What is the primary goal of government policies aimed at promoting perfect competition?

    <p>To prevent monopolies and foster fair competition</p> Signup and view all the answers

    What is the consequence of imperfections in the market structure?

    <p>Market inefficiencies</p> Signup and view all the answers

    What is the characteristic of monopolistic competition that leads to the normalization of economic profits in the long run?

    <p>Ease of market entry</p> Signup and view all the answers

    What is the primary difference between monopolies and oligopolies?

    <p>The number of firms in the market</p> Signup and view all the answers

    What is the primary objective of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of interventions aimed at correcting market failures</p> Signup and view all the answers

    What is the main argument in favor of protectionism, especially for emerging domestic industries?

    <p>Infant industry argument, which involves protecting emerging domestic industries that are not yet competitive enough to withstand international competition</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To increase participation in the global market and encourage local firms to export their goods</p> Signup and view all the answers

    What is the primary focus of the unit on economic growth and development?

    <p>To explore the strategies and methods employed by governments to foster economic growth and development</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To correct market failures and ensure efficient allocation of resources</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>To reduce poverty and inequality through sustainable income redistribution strategies</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth refers to an increase in GDP per capita, while economic development refers to improvements in standards of living.</p> Signup and view all the answers

    What is the primary goal of the supply-side approach to economic growth?

    <p>To enhance productivity through education, technology, and entrepreneurship.</p> Signup and view all the answers

    What is the primary focus of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>To meet basic needs, develop human resources, and build the economy.</p> Signup and view all the answers

    What is the primary characteristic of the economic divide between the North and the South?

    <p>A significant disparity in income levels and access to resources.</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To target halving unemployment and poverty by improving average economic growth.</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>To focus on job creation and identify job drivers like infrastructure and agriculture.</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>To aim at market-led growth, fiscal and monetary discipline, and enhancing investor confidence.</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Health, education, and income indicators of countries.</p> Signup and view all the answers

    What is the primary characteristic of the demand-side approach to economic growth?

    <p>Increasing government expenditure to stimulate economic activity.</p> Signup and view all the answers

    What is the primary goal of import substitution in the context of economic growth?

    <p>To encourage the production of goods domestically to retain economic benefits.</p> Signup and view all the answers

    In a perfectly competitive market, what is the implication of the marginal revenue (MR) exceeding the marginal cost (MC) of producing an additional unit?

    <p>The firm should increase production to enhance profits</p> Signup and view all the answers

    What is the primary role of government policies in promoting perfect competition?

    <p>To emulate the conditions of perfect competition and enhance economic efficiency</p> Signup and view all the answers

    Which market structure is characterized by a single company or entity controlling the entire supply of a product or service?

    <p>Monopoly</p> Signup and view all the answers

    What is the implication of imperfect markets on economic welfare?

    <p>They can lead to market inefficiencies</p> Signup and view all the answers

    What is the primary goal of firms in imperfect markets?

    <p>To maximize profits</p> Signup and view all the answers

    What is a key characteristic of monopolistic competition?

    <p>Firms have some control over their prices due to product differentiation</p> Signup and view all the answers

    What is the characteristic of a monopolistically competitive market that prevents firms from earning long-term economic profits?

    <p>Ease of market entry</p> Signup and view all the answers

    What is a consequence of imperfect markets on economic welfare?

    <p>Potential welfare losses to society</p> Signup and view all the answers

    What is a key feature of oligopolies?

    <p>Interdependence of firms' decisions on pricing and output</p> Signup and view all the answers

    What is a result of monopolies and oligopolies?

    <p>Higher prices and lower output compared to perfect competition</p> Signup and view all the answers

    What is the primary objective of government intervention in markets with monopolies and oligopolies?

    <p>To promote economic efficiency and protect consumer interests</p> Signup and view all the answers

    What is a key difference between monopolistic competition and perfect competition?

    <p>Level of product differentiation</p> Signup and view all the answers

    Which of the following is a key assumption in a perfect market that ensures no single entity can influence market prices?

    <p>Perfect information and freedom of entry and exit</p> Signup and view all the answers

    In a perfect market, what is the primary goal of a firm's cost-benefit analysis?

    <p>To maximize profit</p> Signup and view all the answers

    What is the primary reason for government intervention in markets with monopolies and oligopolies?

    <p>To increase market competition and reduce inefficiencies</p> Signup and view all the answers

    Which of the following is a consequence of a perfectly competitive market?

    <p>Maximum efficiency and equitable resource distribution</p> Signup and view all the answers

    Which of the following is an example of a positive externality?

    <p>Education</p> Signup and view all the answers

    In a perfect market, what is the relationship between the industry and individual businesses?

    <p>The industry is composed of multiple businesses that produce identical products</p> Signup and view all the answers

    What is a characteristic of public goods?

    <p>They are non-rivalrous and non-excludable</p> Signup and view all the answers

    What is the significance of revenue metrics in perfectly competitive markets?

    <p>To focus on total revenue, average revenue, and marginal revenue</p> Signup and view all the answers

    What is a consequence of imperfect competition in markets?

    <p>Higher prices and reduced output</p> Signup and view all the answers

    Which of the following is a characteristic of a perfectly competitive market that ensures no single entity can wield undue influence?

    <p>Multiple buyers and sellers with perfect information</p> Signup and view all the answers

    What is a cause of market failures?

    <p>Imperfect competition</p> Signup and view all the answers

    What is the result of government intervention to correct market failures?

    <p>Improved market outcomes and increased social welfare</p> Signup and view all the answers

    What is the primary objective of cost-benefit analysis in public policy?

    <p>To determine the social costs and benefits of interventions aimed at correcting market failures.</p> Signup and view all the answers

    What is the primary argument in favor of protectionism?

    <p>To protect emerging domestic industries that are not yet competitive enough to withstand international competition.</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To increase participation in the global market.</p> Signup and view all the answers

    What is the primary focus of the unit on economic growth and development?

    <p>To explore the strategies and methods employed by governments to foster economic growth and development.</p> Signup and view all the answers

    What is the consequence of imperfect markets on economic welfare?

    <p>Leads to inefficient allocation of resources and misallocation of goods and services.</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To correct market failures and promote efficient allocation of resources.</p> Signup and view all the answers

    Which approach to economic growth focuses on increasing government expenditure, redistributing income, and promoting domestic production?

    <p>Demand-side approach</p> Signup and view all the answers

    What is the primary objective of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Reducing poverty and inequality</p> Signup and view all the answers

    Which of the following is NOT a characteristic of the North-South divide?

    <p>Cultural differences</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Reducing poverty and unemployment</p> Signup and view all the answers

    Which approach to economic growth focuses on improving the quality of the labor force, managing natural resources, and accumulating capital goods?

    <p>Supply-side approach</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>Job creation and infrastructure development</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Health, education, and income</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>Market-led growth and fiscal discipline</p> Signup and view all the answers

    What is import substitution in the context of economic growth?

    <p>Encouraging domestic production of goods</p> Signup and view all the answers

    What is a key aspect of the supply-side approach to economic growth?

    <p>Improving the quality of the labor force</p> Signup and view all the answers

    Which of the following is a direct consequence of perfect information in a perfectly competitive market?

    <p>Homogeneous products</p> Signup and view all the answers

    What is the primary goal of a firm in a perfectly competitive market in the short run?

    <p>Maximize profits</p> Signup and view all the answers

    Which of the following is a characteristic of individual businesses in a perfectly competitive market?

    <p>Price taker</p> Signup and view all the answers

    What is the primary objective of revenue metrics in a perfectly competitive market?

    <p>To determine the profit-maximizing output level</p> Signup and view all the answers

    What is the significance of freedom of entry and exit in a perfectly competitive market?

    <p>It ensures that resources are allocated efficiently</p> Signup and view all the answers

    What is the primary difference between an industry and an individual business in a perfectly competitive market?

    <p>The industry comprises multiple businesses producing identical products</p> Signup and view all the answers

    What is the primary consequence of imperfect markets on economic welfare?

    <p>Welfare losses to society due to underutilization of resources</p> Signup and view all the answers

    What is the key feature of an oligopoly that affects market behavior and efficiency?

    <p>The interdependence of firms' decisions on pricing and output</p> Signup and view all the answers

    What is the primary implication of perfect competition on market structure and policy?

    <p>It serves as a benchmark for evaluating real-world market structures and designing competition policies.</p> Signup and view all the answers

    What is the role of government intervention in imperfect markets?

    <p>To control monopolistic and oligopolistic powers, aiming to enhance competitive outcomes</p> Signup and view all the answers

    What is the primary characteristic of monopolistic competition?

    <p>The selling of differentiated products that are not perfect substitutes</p> Signup and view all the answers

    In a monopolistically competitive market, what is the long-term outcome for firms' economic profits?

    <p>Firms earn short-term economic profits, but they normalize in the long run.</p> Signup and view all the answers

    What is the consequence of monopolies and oligopolies on prices and output?

    <p>Lower output and higher prices due to market power</p> Signup and view all the answers

    What is a characteristic of revenue and cost curves in imperfect markets?

    <p>Firms face different conditions for their average and marginal revenue and cost curves based on market structure.</p> Signup and view all the answers

    What is the primary goal of government policies in imperfect markets?

    <p>To emulate the conditions of perfect competition to enhance economic efficiency.</p> Signup and view all the answers

    What is the primary reason why monopolies can generate sustained profits in the long term?

    <p>The existence of barriers to entry, such as patents and regulatory measures</p> Signup and view all the answers

    What is the implication of imperfect competition on resource allocation?

    <p>Resources are allocated inefficiently, leading to market failures.</p> Signup and view all the answers

    What is the primary difference between a monopoly and an oligopoly?

    <p>A monopoly has a single firm, while an oligopoly has a few firms.</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To increase market transparency and consumer information</p> Signup and view all the answers

    What is a characteristic of public goods?

    <p>They are non-excludable and non-rivalrous</p> Signup and view all the answers

    What is an example of a negative externality?

    <p>Pollution</p> Signup and view all the answers

    What is the consequence of imperfect competition in markets?

    <p>Higher prices and reduced output</p> Signup and view all the answers

    What is the primary cause of allocative inefficiency in markets?

    <p>Imperfect competition</p> Signup and view all the answers

    What is the result of government intervention to correct market failures?

    <p>Improved market transparency and consumer information</p> Signup and view all the answers

    What is the primary goal of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of government interventions</p> Signup and view all the answers

    What is the main purpose of protectionism in international trade?

    <p>To protect local businesses and jobs from foreign competition</p> Signup and view all the answers

    What is a key benefit of free trade agreements?

    <p>Enhanced consumer choice and lower prices</p> Signup and view all the answers

    What is the focus of South Africa's import substitution policies?

    <p>To reduce dependency on foreign goods by supporting local production</p> Signup and view all the answers

    What is a significant challenge addressed in the unit on economic growth and development?

    <p>The North-South divide and income inequality</p> Signup and view all the answers

    What is the primary focus of the unit on growth and development?

    <p>Exploring strategies for economic growth and development</p> Signup and view all the answers

    Which of the following approaches to economic growth is primarily concerned with addressing income inequality?

    <p>Demand-side approach</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs and developing human resources</p> Signup and view all the answers

    What is the main characteristic of the North/South divide in terms of economic development?

    <p>A significant disparity in terms of income levels and economic stability</p> Signup and view all the answers

    What is the primary focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Halving unemployment and poverty</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth is a narrower concept, while economic development is broader</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>Aims at market-led growth, fiscal and monetary discipline, and enhancing investor confidence</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>Job creation and identifying job drivers</p> Signup and view all the answers

    What is the Human Development Index (HDI) used to measure?

    <p>Standard of living, including health, education, and income</p> Signup and view all the answers

    Which of the following approaches to economic growth is primarily concerned with improving the quality of the labor force and investing in infrastructure and technology?

    <p>Supply-side approach</p> Signup and view all the answers

    What is the primary goal of import substitution in the context of economic growth?

    <p>Retaining economic benefits within the country</p> Signup and view all the answers

    What is the main distinguishing feature of a perfectly competitive market that ensures maximum efficiency and equitable resource distribution?

    <p>Homogeneous products and perfect information</p> Signup and view all the answers

    What is the primary goal of individual businesses in a perfectly competitive market?

    <p>To maximize profit</p> Signup and view all the answers

    What is the main reason why monopolies can generate sustained profits in the long term?

    <p>Because they are able to influence market prices significantly</p> Signup and view all the answers

    What is the significance of complete mobility of factors of production in a perfectly competitive market?

    <p>It allows for free entry and exit of firms</p> Signup and view all the answers

    What is the key feature of an oligopoly?

    <p>The interdependence of firms</p> Signup and view all the answers

    What is the role of revenue metrics in decision-making for firms in perfectly competitive markets?

    <p>To maximize profits or minimize losses</p> Signup and view all the answers

    What is the outcome of monopolistic competition in the long run?

    <p>Firms earn normal profits</p> Signup and view all the answers

    What is the relationship between individual businesses and the industry in a perfectly competitive market?

    <p>Individual businesses contribute to the industry's total output</p> Signup and view all the answers

    What is the consequence of monopolies and oligopolies on prices and output?

    <p>Higher prices and lower output</p> Signup and view all the answers

    What is the consequence of perfect competition on market prices?

    <p>Prices are determined by market forces</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To protect consumer interests</p> Signup and view all the answers

    What is a characteristic of imperfect markets?

    <p>Firms are able to influence market prices</p> Signup and view all the answers

    In a perfectly competitive market, what happens when the marginal revenue equals the marginal cost?

    <p>Firms will adjust their output to optimize resource allocation</p> Signup and view all the answers

    What is a key characteristic of monopolistic competition?

    <p>Many firms sell differentiated products</p> Signup and view all the answers

    What is a consequence of imperfect markets?

    <p>Market inefficiencies and deadweight loss</p> Signup and view all the answers

    What is the primary goal of government policies in promoting perfect competition?

    <p>To emulate the conditions of perfect competition</p> Signup and view all the answers

    How do firms in oligopolies typically compete?

    <p>Through non-price competition, such as branding and advertising</p> Signup and view all the answers

    What is a characteristic of perfect competition?

    <p>Many firms produce identical products</p> Signup and view all the answers

    What is the primary purpose of cost-benefit analysis in public policy?

    <p>To evaluate the social costs and benefits of interventions aimed at correcting market failures.</p> Signup and view all the answers

    What is the main argument in favor of protectionism?

    <p>To protect emerging domestic industries that are not yet competitive enough to withstand international competition.</p> Signup and view all the answers

    What is the focus of South Africa's export promotion policies?

    <p>To encourage local firms to export their goods and increase participation in the global market.</p> Signup and view all the answers

    What is the primary goal of government intervention in markets with monopolies and oligopolies?

    <p>To correct market failures and promote economic efficiency.</p> Signup and view all the answers

    What is the main challenge addressed in the unit on economic growth and development?

    <p>The North/South divide and income inequality.</p> Signup and view all the answers

    What is the primary goal of import substitution in the context of economic growth?

    <p>To encourage local production of goods that were previously imported.</p> Signup and view all the answers

    What is the primary reason for government intervention in markets with monopolies and oligopolies?

    <p>To promote perfect competition and increase market efficiency</p> Signup and view all the answers

    What is an example of a negative externality?

    <p>Pollution</p> Signup and view all the answers

    What is the consequence of imperfect distribution of income and wealth in a market economy?

    <p>Production of goods and services is skewed towards high-end goods</p> Signup and view all the answers

    What is a characteristic of public goods?

    <p>They are non-excludable and non-rivalrous</p> Signup and view all the answers

    What is the result of asymmetric information in markets?

    <p>Choices that do not maximize welfare</p> Signup and view all the answers

    What is the consequence of market failures related to externalities?

    <p>Environmental degradation</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth focuses on increasing GDP, while economic development focuses on improving standards of living.</p> Signup and view all the answers

    What is the primary goal of the demand-side approach to economic growth?

    <p>To stimulate economic activity through increased government expenditure and redistribution of income.</p> Signup and view all the answers

    What is the main focus of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>To meet basic needs, develop human resources, and build the economy.</p> Signup and view all the answers

    What is the main characteristic of the North/South Divide in terms of economic development?

    <p>A significant disparity exists between the developed 'North' and the developing 'South' in terms of income levels and economic stability.</p> Signup and view all the answers

    What is the primary goal of entrepreneurship in the context of economic growth?

    <p>To encourage entrepreneurs to discover and exploit new business opportunities.</p> Signup and view all the answers

    What is the main focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To target halving unemployment and poverty by improving average economic growth.</p> Signup and view all the answers

    What is the main difference between the demand-side and supply-side approaches to economic growth?

    <p>The demand-side approach focuses on stimulating economic activity, while the supply-side approach focuses on improving productivity.</p> Signup and view all the answers

    What is the primary goal of the New Growth Path (NGP) in South Africa?

    <p>To focus on job creation and identifying job drivers like infrastructure and agriculture.</p> Signup and view all the answers

    What is the main characteristic of the Human Development Index (HDI)?

    <p>It measures the standard of living, as indicated by health, education, and income.</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment and Redistribution (GEAR) approach in South Africa?

    <p>To promote market-led growth and fiscal discipline.</p> Signup and view all the answers

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