June P2 Mix
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Questions and Answers

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

  • To minimize losses
  • To provide goods to the society
  • To control the market price
  • To maximize profit (correct)

What characterizes a perfectly competitive market?

  • Regulated by the government
  • Monopoly and perfect information
  • Homogeneous products and perfect information (correct)
  • Single buyer and single seller

What is the significance of perfect information in a perfect market?

  • It limits the mobility of factors of production
  • It prevents single entities from influencing market prices (correct)
  • It allows for price manipulation
  • It ensures the existence of a single entity

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

<p>Price takers (B)</p> Signup and view all the answers

What is the distinction between an industry and an individual business in a perfect market?

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

What metric do businesses in a perfect market focus on?

<p>Various revenue metrics, including total revenue (TR), average revenue (AR), and marginal revenue (MR) (D)</p> Signup and view all the answers

What is the significance of marginal cost (MC) in a perfect market?

<p>It is a pivotal concept in decision-making, especially concerning output and pricing strategies (D)</p> Signup and view all the answers

What is a characteristic of a perfect market?

<p>Complete mobility of factors of production (D)</p> Signup and view all the answers

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

<p>Economic growth focuses on real GDP, while economic development includes standards of living and income equity (C)</p> Signup and view all the answers

What is the purpose of import substitution in the demand-side approach to economic growth?

<p>To retain economic benefits within the country by producing goods domestically (B)</p> Signup and view all the answers

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

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

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

<p>To meet basic needs and develop human resources (B)</p> Signup and view all the answers

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

<p>A significant disparity in income levels, economic stability, and access to resources (D)</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 (B)</p> Signup and view all the answers

What is the purpose of Accumulating Capital Goods in the supply-side approach to economic growth?

<p>To invest in infrastructure and technology to enhance production capacity (C)</p> Signup and view all the answers

What is a characteristic of a monopoly?

<p>A single firm dominating the market with no close substitutes (D)</p> Signup and view all the answers

What is the primary evaluation criteria for South African approaches to economic growth?

<p>Effectiveness in reducing poverty, inequality, and unemployment (D)</p> Signup and view all the answers

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

<p>To control monopolistic and oligopolistic powers and protect consumer interests (D)</p> Signup and view all the answers

What is a key feature of oligopolies?

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

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

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

What is a consequence of imperfect markets?

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

What is a characteristic of monopolistic competition?

<p>Many firms selling differentiated products (A)</p> Signup and view all the answers

Why do monopolies maintain prices above their marginal costs?

<p>To maintain market power and limit competition (C)</p> Signup and view all the answers

What is a result of oligopolies adopting a kinked demand curve?

<p>Stabilization of prices above competitive levels (B)</p> Signup and view all the answers

What is a consequence of monopolies and oligopolies?

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

What is the primary reason for the existence of monopolies?

<p>Barriers to entry, such as patents and regulatory measures (C)</p> Signup and view all the answers

What is a common reason for government intervention in markets with monopolies and oligopolies?

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

What is an example of a negative externality?

<p>Pollution (D)</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 (D)</p> Signup and view all the answers

What is a characteristic of public goods?

<p>Non-excludable and non-rivalrous (C)</p> Signup and view all the answers

What is protectionism?

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

What is a consequence of imperfect competition?

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

What is the main argument for protecting infant industries?

<p>To protect emerging domestic industries from foreign competition (D)</p> Signup and view all the answers

What is an example of asymmetric information?

<p>Sellers knowing about defects in used cars (A)</p> Signup and view all the answers

What is the main benefit of free trade?

<p>Promotes specialization and economies of scale (A)</p> Signup and view all the answers

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

<p>To encourage local firms to export their goods (B)</p> Signup and view all the answers

What is a possible consequence of market failures?

<p>Economic inequities and social divides (D)</p> Signup and view all the answers

What is a type of market failure?

<p>Externalities (B)</p> Signup and view all the answers

What is the main focus of economic growth and development strategies?

<p>To increase economic growth (D)</p> Signup and view all the answers

What is the primary challenge posed by the North/South divide?

<p>Income inequality (C)</p> Signup and view all the answers

What is a possible government intervention to correct market failures?

<p>Imposing taxes on negative externalities (B)</p> Signup and view all the answers

What is a type of inefficiency that occurs when resources are not allocated according to consumer preferences?

<p>Allocative inefficiency (A)</p> Signup and view all the answers

What is the main difference between economic growth and development?

<p>Economic growth focuses on quantitative measures, while development focuses on qualitative measures (A)</p> Signup and view all the answers

What is a possible cause of market failures?

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

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

<p>To encourage local production of goods (D)</p> Signup and view all the answers

What is the main benefit of economic growth?

<p>Increases the potential for economic growth (C)</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>Profits are maximized (C)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

<p>To enhance economic efficiency (C)</p> Signup and view all the answers

What characterizes imperfect markets?

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

What is a characteristic of a monopoly?

<p>A single company controls the entire supply (A)</p> Signup and view all the answers

What is true about oligopolies?

<p>Firms produce differentiated products (C)</p> Signup and view all the answers

What is a key feature of monopolistic competition?

<p>Firms produce differentiated products (A)</p> Signup and view all the answers

What happens to profits in monopolistically competitive markets in the long run?

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

What influences the dynamics of imperfect markets?

<p>Interplay of cost and revenue curves, market structure, and firm behavior (D)</p> Signup and view all the answers

What is the goal of firms in imperfect markets?

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

Why do monopolists face a downward-sloping demand curve?

<p>Because they have significant market power (A)</p> Signup and view all the answers

What is the main characteristic of products in a perfectly competitive market?

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

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

<p>Maximize profit (C)</p> Signup and view all the answers

What is the significance of perfect information in a perfect market?

<p>Ensures that no single entity can wield undue influence (B)</p> Signup and view all the answers

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

<p>Price takers (B)</p> Signup and view all the answers

What is revenue metrics that businesses in a perfect market focus on?

<p>Total revenue (TR), average revenue (AR), and marginal revenue (MR) (B)</p> Signup and view all the answers

What is the significance of marginal cost (MC) in decision-making?

<p>Determining output levels (B)</p> Signup and view all the answers

What is the characteristic of a perfect market?

<p>Complete mobility of factors of production (B)</p> Signup and view all the answers

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

<p>Maximize profit (A)</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. (D)</p> Signup and view all the answers

What is the main argument for protectionism?

<p>To protect emerging domestic industries. (D)</p> Signup and view all the answers

What is one of the benefits of free trade?

<p>Increased specialization. (A)</p> Signup and view all the answers

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

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

What is a potential consequence of market failures?

<p>All of the above. (D)</p> Signup and view all the answers

What is the primary focus of economic growth and development strategies?

<p>To promote economic growth and development through sustainable income redistribution strategies. (C)</p> Signup and view all the answers

What is a characteristic of public goods?

<p>They are non-rival in consumption and non-excludable. (D)</p> Signup and view all the answers

What is the main goal of government interventions in markets with monopolies and oligopolies?

<p>To correct market failures and promote competition. (C)</p> Signup and view all the answers

What is a type of market failure?

<p>All of the above. (D)</p> Signup and view all the answers

What is the primary challenge posed by the North/South divide?

<p>Income inequality. (A)</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 transparency and reduce inefficiencies (C)</p> Signup and view all the answers

What is an example of a positive externality?

<p>Education (A)</p> Signup and view all the answers

What is a consequence of imperfect markets?

<p>Reduced social welfare (D)</p> Signup and view all the answers

What is a type of market failure?

<p>Externalities (C)</p> Signup and view all the answers

What is a characteristic of public goods?

<p>Non-excludable and non-rivalrous (C)</p> Signup and view all the answers

What is a cause of market failures?

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

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

<p>To correct market failures and increase efficiency (B)</p> Signup and view all the answers

What is an example of asymmetric information?

<p>Sellers knowing about defects in used cars (D)</p> Signup and view all the answers

What is a consequence of imperfect competition?

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

What is the main goal of government regulation in imperfect markets?

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

What happens when the marginal revenue (MR) exceeds the marginal cost (MC) in a perfect market?

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

What is the primary goal of governments in designing competition policies?

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

What is a characteristic of firms in a monopolistically competitive market?

<p>They engage in non-price competition. (A)</p> Signup and view all the answers

What is the result of long-term dynamics in perfect markets?

<p>Firms make normal profits but no economic profits. (B)</p> Signup and view all the answers

What is a characteristic of oligopolies?

<p>They are interdependent and may engage in collusion. (B)</p> Signup and view all the answers

What is the primary aim of the Redistribution of Income policy in the demand-side approach to economic growth?

<p>To enhance consumption among lower-income earners (B)</p> Signup and view all the answers

What is the outcome of profit maximization in imperfect markets?

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

What is a characteristic of monopolies?

<p>They face a downward-sloping demand curve. (A)</p> Signup and view all the answers

Which of the following approaches focuses on improving the quality of the labor force in the supply-side approach to economic growth?

<p>Improving the Quality of the Labor Force (C)</p> Signup and view all the answers

What is the significance of perfect competition in economics?

<p>It provides a benchmark for evaluating real-world market structures. (C)</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 (D)</p> Signup and view all the answers

What is the human divide characterized by?

<p>A disparity in the standard of living, as indicated by the Human Development Index (HDI) (C)</p> Signup and view all the answers

What is the consequence of imperfect markets on resource allocation?

<p>Resources are allocated inefficiently. (A)</p> Signup and view all the answers

What is the primary goal of governments in regulating imperfect markets?

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

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

<p>To identify job drivers like infrastructure and agriculture (D)</p> Signup and view all the answers

Which of the following approaches incorporates both demand-side and supply-side approaches to economic growth?

<p>South African policies (D)</p> Signup and view all the answers

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

<p>All of the above (D)</p> Signup and view all the answers

What is the primary evaluation criterion for South African approaches to economic growth?

<p>Their effectiveness in reducing poverty and inequality (C)</p> Signup and view all the answers

What is a key feature of monopolies?

<p>Control over essential resources (B)</p> Signup and view all the answers

What is a consequence of monopolies and oligopolies?

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

What is a characteristic of oligopolies?

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

What is a result of monopolistic competition?

<p>Similar to perfect competition in the long run (C)</p> Signup and view all the answers

Why do governments intervene in imperfect markets?

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

What is a consequence of imperfect markets?

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

What is a characteristic of monopolistic competition?

<p>Many firms selling differentiated products (B)</p> Signup and view all the answers

What is the outcome of oligopolies adopting a kinked demand curve?

<p>Stabilization of prices above competitive levels (A)</p> Signup and view all the answers

What is a common reason for government intervention in imperfect markets?

<p>To protect consumer interests and promote competition (B)</p> Signup and view all the answers

What is the primary focus of understanding imperfect markets?

<p>To understand the dynamics of real-world markets (D)</p> Signup and view all the answers

What is the primary consequence of market failures?

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

What is an example of a positive externality?

<p>Education (D)</p> Signup and view all the answers

What is the primary cause of allocative inefficiency?

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

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

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

What is the primary consequence of asymmetric information?

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

What is an example of a merit good?

<p>Health care (C)</p> Signup and view all the answers

What is the primary characteristic of public goods?

<p>Non-excludable and non-rivalrous (D)</p> Signup and view all the answers

What is the primary cause of productive inefficiency?

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

What is the primary goal of government intervention in markets with externalities?

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

What is the primary consequence of market failures on income and wealth distribution?

<p>Imperfect distribution of income and wealth (D)</p> Signup and view all the answers

What is the primary driver of firm entry and exit in perfectly competitive markets?

<p>Profitability (B)</p> Signup and view all the answers

What is the characteristic of a monopolist's demand curve?

<p>Downward-sloping (C)</p> Signup and view all the answers

What is a key characteristic of products in a perfectly competitive market?

<p>They are homogeneous with little to no differentiation. (B)</p> Signup and view all the answers

What is the primary goal of governments in promoting perfect competition?

<p>To enhance economic efficiency (B)</p> Signup and view all the answers

What is the characteristic of oligopolies in terms of revenue and cost curves?

<p>The demand curve exhibits a kinked shape (C)</p> Signup and view all the answers

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

<p>To maximize profit. (A)</p> Signup and view all the answers

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

<p>It prevents firms from influencing market prices. (C)</p> Signup and view all the answers

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

<p>Firms normalize their profits (D)</p> Signup and view all the answers

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

<p>They are price takers. (D)</p> Signup and view all the answers

What is the primary characteristic of imperfect markets?

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

What is the primary goal of firms in imperfect markets?

<p>To maximize economic profits (A)</p> Signup and view all the answers

What is the significance of total revenue (TR) in a perfectly competitive market?

<p>It is the total income earned from sales. (C)</p> Signup and view all the answers

What is the significance of average cost (AC) in a perfectly competitive market?

<p>It is the cost per unit of production. (D)</p> Signup and view all the answers

What is the primary consequence of imperfect markets?

<p>Market inefficiency (A)</p> Signup and view all the answers

What is the primary characteristic of a monopolistically competitive market?

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

What is the significance of marginal revenue (MR) in a perfectly competitive market?

<p>It is the revenue earned from selling one additional unit. (C)</p> Signup and view all the answers

What is the primary role of competition policies in imperfect markets?

<p>To enhance economic efficiency (C)</p> Signup and view all the answers

What is the significance of marginal cost (MC) in a perfectly competitive market?

<p>It is the cost of producing one additional unit. (C)</p> Signup and view all the answers

Which type of market structure is characterized by a single firm dominating the entire market?

<p>Monopoly (B)</p> Signup and view all the answers

What is a consequence of imperfect markets?

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

What is a key feature of oligopolies?

<p>Firms are interdependent in their decision-making (D)</p> Signup and view all the answers

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

<p>Firms earning just normal profits (C)</p> Signup and view all the answers

Why do governments intervene in imperfect markets?

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

What is a characteristic of monopolistic competition?

<p>Firms selling differentiated products (B)</p> Signup and view all the answers

What is a consequence of monopolies and oligopolies?

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

What is the primary goal of governments in regulating imperfect markets?

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

What is a characteristic of oligopolies?

<p>Firms adopting a kinked demand curve (A)</p> Signup and view all the answers

What is the primary reason for government intervention in imperfect markets?

<p>To correct market failures and promote efficient outcomes (B)</p> Signup and view all the answers

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

<p>Increasing government expenditure and redistribution of income (C)</p> Signup and view all the answers

Which of the following is a characteristic of economic development?

<p>Encompasses improvements in standards of living and income equity (B)</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 unemployment and poverty (D)</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 (B)</p> Signup and view all the answers

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

<p>Income levels and access to resources (D)</p> Signup and view all the answers

What is the primary evaluation criteria for South African approaches to economic growth?

<p>Their effectiveness in reducing poverty, inequality, and unemployment (D)</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 a project (A)</p> Signup and view all the answers

What is the main goal of South Africa's Reconstruction and Development Programme (RDP)?

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

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

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

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

<p>Improving the quality of the labor force and managing natural resources (D)</p> Signup and view all the answers

What is a common argument for protecting infant industries?

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

What is the primary benefit of free trade?

<p>It promotes specialization and economies of scale (B)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

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

What is the primary challenge posed by the North/South divide?

<p>Income inequality between developed and developing countries (A)</p> Signup and view all the answers

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

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

What is the primary consequence of market failures?

<p>Inefficient allocation of resources (D)</p> Signup and view all the answers

What is the primary focus of economic growth and development strategies?

<p>To encourage economic growth and development through sustainable income redistribution (B)</p> Signup and view all the answers

What is a possible consequence of imperfect competition?

<p>Inefficient allocation of resources (B)</p> Signup and view all the answers

In a perfect market, what is the result of the lack of differentiation between goods sold by different sellers?

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

What is the primary distinction between an industry and an individual business in a perfect market?

<p>An industry is a collection of businesses, while an individual business is a single entity (A)</p> Signup and view all the answers

What is the purpose of marginal revenue (MR) in decision-making for businesses in a perfect market?

<p>To determine the optimal output level of a firm (A)</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 that resources are allocated efficiently (A)</p> Signup and view all the answers

What is the relationship between the market price and the output level of individual businesses in a perfect market?

<p>Individual businesses can only control their output levels (D)</p> Signup and view all the answers

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

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

What is the significance of homogeneous products in a perfect market?

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

What is the result of freedom of entry and exit in a perfect market?

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

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

<p>Increasing government expenditure and redistribution of income (A)</p> Signup and view all the answers

Which of the following is NOT a characteristic of the economic divide between the North and South?

<p>Similar access to resources (B)</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 (D)</p> Signup and view all the answers

What is the primary evaluation criterion for South African approaches to economic growth?

<p>Effectiveness in reducing poverty and inequality (C)</p> Signup and view all the answers

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

<p>Improving the quality of the labor force and managing natural resources (B)</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 (A)</p> Signup and view all the answers

What is the primary characteristic of South African policies on economic growth?

<p>Incorporation of both demand-side and supply-side approaches (A)</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 real GDP, while economic development encompasses improvements in standards of living (C)</p> Signup and view all the answers

What is the primary consequence of imperfect markets?

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

What is the primary characteristic of a monopoly?

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

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

<p>To control monopolistic and oligopolistic powers (D)</p> Signup and view all the answers

What is the primary feature of oligopolies?

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

What occurs in monopolistic competition?

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

What is the primary goal of firms in imperfect markets?

<p>To maximize economic profits in the long run (B)</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 (D)</p> Signup and view all the answers

What is the outcome of monopolies and oligopolies?

<p>Higher prices and lower output (C)</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 government interventions (B)</p> Signup and view all the answers

Why do monopolies and oligopolies generate sustained profits?

<p>Due to barriers to entry (C)</p> Signup and view all the answers

What is the main argument for protectionism?

<p>To safeguard jobs and preserve local industries (D)</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 (B)</p> Signup and view all the answers

What is the primary reason for the existence of imperfect markets?

<p>Lack of perfect competition due to barriers to entry (A)</p> Signup and view all the answers

What is the primary consequence of imperfect competition?

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

What is a characteristic of oligopolies?

<p>A few firms dominate a market, often leading to non-price competition (C)</p> Signup and view all the answers

What is a benefit of free trade?

<p>Enhanced consumer choice and improved international relations (C)</p> Signup and view all the answers

What is an example of a positive externality?

<p>Education (C)</p> Signup and view all the answers

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

<p>Firms normalize their profits, similar to perfect competition (A)</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 promote economic growth (D)</p> Signup and view all the answers

What is a characteristic of public goods?

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

What is the primary goal of understanding imperfect markets?

<p>To understand the dynamics of real-world markets (A)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

<p>To dismantle barriers to entry and ensure a level playing field (B)</p> Signup and view all the answers

What can lead to redundant expenditures on advertising and marketing in monopolistic competition?

<p>Non-price competition (C)</p> Signup and view all the answers

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

<p>It prevents market economies from being efficient (C)</p> Signup and view all the answers

What is a characteristic of imperfect markets?

<p>Government intervention and imperfect information (A)</p> Signup and view all the answers

What is a characteristic of monopolistic competition?

<p>Many firms sell products that are differentiated but serve a similar purpose (A)</p> Signup and view all the answers

What is the main goal of economic growth and development strategies?

<p>To encourage economic growth and development through efficient allocation of resources (C)</p> Signup and view all the answers

What is an example of a merit good?

<p>Health care (B)</p> Signup and view all the answers

What is the consequence of asymmetric information?

<p>It leads to choices that do not maximize welfare (B)</p> Signup and view all the answers

What is the consequence of imperfect markets?

<p>Market inefficiencies occur, leading to a misallocation of resources (D)</p> Signup and view all the answers

What is a consequence of market failures?

<p>Inefficiency and misallocation of resources (B)</p> Signup and view all the answers

What is the primary focus of governments in regulating imperfect markets?

<p>To prevent market failures and ensure a level playing field (D)</p> Signup and view all the answers

What is the primary challenge posed by the North/South divide?

<p>Income inequality and unequal distribution of resources (C)</p> Signup and view all the answers

What is the primary goal of government intervention in markets with externalities?

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

What is a consequence of immobility of factors of production?

<p>It leads to inefficiencies in the production of goods and services (C)</p> Signup and view all the answers

What is the result of the dynamic equilibrium in perfect markets?

<p>Resources are allocated most efficiently, reflecting the virtues of perfect competition (B)</p> Signup and view all the answers

What is a possible government intervention to correct market failures?

<p>Implementing cost-benefit analysis and designing interventions (B)</p> Signup and view all the answers

What is the primary goal of government intervention in markets with imperfect competition?

<p>To increase market competition and reduce inefficiencies (C)</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 living standards (B)</p> Signup and view all the answers

What is a characteristic of market failures?

<p>They lead to a net social welfare loss (C)</p> Signup and view all the answers

In a perfectly competitive market, what happens when the marginal cost of producing an additional unit equals the marginal revenue obtained from selling that unit?

<p>Firms achieve maximum profits. (A)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

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

In a monopolistically competitive market, what happens to economic profits in the long run?

<p>Economic profits tend to normalize due to ease of entry. (B)</p> Signup and view all the answers

What is a characteristic of oligopolies?

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

What is a consequence of imperfect markets?

<p>Markets are characterized by market inefficiencies. (B)</p> Signup and view all the answers

In a monopoly, what allows the monopolist to act as a price setter?

<p>Patents and resource control. (D)</p> Signup and view all the answers

What is a key feature of monopolistic competition?

<p>Firms engage in non-price competition and differentiate their products. (B)</p> Signup and view all the answers

What is the primary objective of firms in imperfect markets?

<p>To achieve maximum profits. (C)</p> Signup and view all the answers

What is a characteristic of perfect competition?

<p>Resources are allocated efficiently. (D)</p> Signup and view all the answers

What is the dynamic equilibrium in perfect markets?

<p>Firms make normal profits, but no economic profits, in the long run. (D)</p> Signup and view all the answers

In a perfectly competitive market, what is the primary reason why individual businesses cannot influence market prices?

<p>Because they are too small relative to the size of the market (D)</p> Signup and view all the answers

What is the primary benefit of homogeneous products in a perfectly competitive market?

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

What is the primary objective of a firm in a perfectly competitive market when deciding on output levels?

<p>To maximize profit by producing at a level where marginal cost equals marginal revenue (B)</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>An industry is the sum of individual businesses' outputs, while an individual business is a part of the industry (A)</p> Signup and view all the answers

What is the primary reason why governments do not regulate perfectly competitive markets?

<p>Because the government believes that the market is efficient and self-regulating (C)</p> Signup and view all the answers

What is the primary significance of average revenue in a perfectly competitive market?

<p>It is the revenue earned by a firm from selling a single unit of a product (A)</p> Signup and view all the answers

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

<p>The price of the product is not equal to its marginal cost. (B)</p> Signup and view all the answers

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

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

How do monopolies and oligopolies maintain their market power?

<p>Through barriers to entry and control over essential resources. (B)</p> Signup and view all the answers

What is the primary difference between total revenue and marginal revenue in a perfectly competitive market?

<p>Total revenue is the revenue earned from selling multiple units, while marginal revenue is the revenue earned from selling one additional unit (D)</p> Signup and view all the answers

What is the primary difference between monopolies and oligopolies?

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

What is the primary reason why firms in monopolistic competition earn only normal profits in the long run?

<p>Ease of market entry. (B)</p> Signup and view all the answers

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

<p>Welfare losses to society. (C)</p> Signup and view all the answers

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

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

What is the primary characteristic of an oligopoly?

<p>Firms are interdependent and make decisions based on each other's actions. (A)</p> Signup and view all the answers

What is the primary difference between monopolistic competition and perfect competition?

<p>The level of product differentiation. (C)</p> Signup and view all the answers

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

<p>Prices are higher than marginal cost. (D)</p> Signup and view all the answers

What is the primary reason why imperfect markets are more realistic than perfect competition?

<p>They are more common in real-world markets. (C)</p> Signup and view all the answers

Which of the following approaches focuses on improving the quality of the labor force to enhance productivity?

<p>Supply-side Approach (B)</p> Signup and view all the answers

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

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

Which of the following best describes the Human Development Index (HDI)?

<p>A measure of health, education, and income (A)</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 (C)</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 (B)</p> Signup and view all the answers

Which of the following approaches does not focus on stimulating economic activity through government expenditure?

<p>Supply-side Approach (A)</p> Signup and view all the answers

Which of the following market failures is characterized by the underproduction of goods and services in private markets?

<p>Public Goods (C)</p> Signup and view all the answers

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

<p>Underproduction of basic goods and services (B)</p> Signup and view all the answers

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

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

What is the primary goal of government intervention in correcting market failures?

<p>To promote social welfare (B)</p> Signup and view all the answers

Which of the following policies is not a supply-side approach to economic growth?

<p>Redistributing income (C)</p> Signup and view all the answers

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

<p>Education (C)</p> Signup and view all the answers

What is the primary evaluation criterion for South African approaches to economic growth?

<p>Effectiveness in reducing poverty and inequality (B)</p> Signup and view all the answers

What is the consequence of asymmetric information in markets?

<p>Reduced consumer welfare (C)</p> Signup and view all the answers

What is the primary consequence of imperfect competition in markets?

<p>Allocative inefficiency (D)</p> Signup and view all the answers

What is the primary goal of government regulations in markets with externalities?

<p>To protect the environment (D)</p> Signup and view all the answers

Which of the following is a consequence of market failures in terms of economic efficiency?

<p>Productive inefficiency (A)</p> Signup and view all the answers

What is the primary goal of government intervention in markets with public goods?

<p>To provide public goods directly (A)</p> Signup and view all the answers

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

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

Which of the following is a characteristic of protectionism?

<p>Restricting international trade to protect local businesses and jobs (D)</p> Signup and view all the answers

What is the primary benefit of free trade, according to the concept of specialization?

<p>Focusing on the production of goods for which a nation has a comparative advantage (C)</p> Signup and view all the answers

Which of the following is an argument for free trade?

<p>Access to a wider variety of goods and services at lower prices (B)</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 promote economic growth (D)</p> Signup and view all the answers

What is a common challenge posed by the North/South divide?

<p>Income inequality between nations (B)</p> Signup and view all the answers

Which of the following is a possible consequence of market failures?

<p>Inefficient allocation of resources (B)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

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

What is a characteristic of imperfect markets?

<p>Existence of externalities and information asymmetry (D)</p> Signup and view all the answers

What is the primary focus of economic growth and development strategies?

<p>Fostering economic growth and development through sustainable income redistribution (A)</p> Signup and view all the answers

In a perfectly competitive market, what is the primary reason why individual businesses are price takers?

<p>The numerous buyers and sellers make it impossible for individual entities to influence market prices. (D)</p> Signup and view all the answers

What is the significance of perfect information in a perfect market?

<p>It ensures that buyers and sellers have access to all relevant market information, preventing any single entity from wielding undue influence. (B)</p> Signup and view all the answers

What is the distinction between average revenue and marginal revenue in a perfectly competitive market?

<p>Average revenue refers to the total revenue earned by a firm, while marginal revenue is the additional revenue earned from selling one more unit. (C)</p> Signup and view all the answers

What is the significance of marginal cost in the decision-making process of a firm in a perfect market?

<p>It determines the optimal level of production and the selling price of the product. (B)</p> Signup and view all the answers

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

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

In a perfect market, what is the relationship between the demand curve of an individual firm and the market demand curve?

<p>The demand curve of an individual firm is horizontal, while the market demand curve is downward sloping. (B)</p> Signup and view all the answers

What is the significance of the concept of total revenue in a perfect market?

<p>It refers to the revenue earned by the firm from selling all units. (B)</p> Signup and view all the answers

What is the relationship between the output level and the marginal revenue of a firm in a perfect market?

<p>As output increases, marginal revenue decreases. (B)</p> Signup and view all the answers

What is a key feature of imperfect markets that distinguishes them from perfect competition?

<p>Firms can influence market prices. (B)</p> Signup and view all the answers

What is a consequence of imperfect markets?

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

What is a characteristic of monopolistic competition?

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

Why do oligopolies often adopt a kinked demand curve?

<p>To discourage competitive price changes (A)</p> Signup and view all the answers

What is the primary reason for government intervention in imperfect markets?

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

What is a consequence of underutilization of resources in imperfect markets?

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

What is a characteristic of monopolies?

<p>A single firm dominates the entire market. (C)</p> Signup and view all the answers

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

<p>Firms earn normal profits. (A)</p> Signup and view all the answers

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

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

What is a consequence of market power in imperfect markets?

<p>Higher prices and lower output (B)</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 (C)</p> Signup and view all the answers

What is the main argument for protecting infant industries?

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

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

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

What is the main characteristic of public goods?

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

What is the primary benefit of free trade?

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

What is the primary challenge posed by the North/South divide?

<p>Income inequality (D)</p> Signup and view all the answers

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

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

What is the main consequence of monopolies and oligopolies?

<p>Inefficient allocation of resources (C)</p> Signup and view all the answers

What is the primary focus of economic growth and development strategies?

<p>To address income inequality and promote sustainable development (C)</p> Signup and view all the answers

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

<p>To encourage local production of goods that were previously imported to strengthen domestic industries and reduce dependency on foreign goods (B)</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. (D)</p> Signup and view all the answers

Which approach to economic growth focuses on increasing government expenditure and income redistribution?

<p>Demand-side approach (A)</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 reduce poverty and unemployment by half (A)</p> Signup and view all the answers

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

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

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

<p>To focus on meeting basic needs, developing human resources, and building the economy (A)</p> Signup and view all the answers

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

<p>To improve the quality of the labor force, manage natural resources, and invest in infrastructure and technology (D)</p> Signup and view all the answers

What is the primary evaluation criterion for South African approaches to economic growth?

<p>Effectiveness in reducing poverty, inequality, and unemployment (B)</p> Signup and view all the answers

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

<p>To identify job drivers like infrastructure and agriculture (A)</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 (B)</p> Signup and view all the answers

What is a characteristic of public goods?

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

What is an example of a negative externality?

<p>Pollution (A)</p> Signup and view all the answers

What is a consequence of imperfect competition?

<p>Increased prices and reduced output (B)</p> Signup and view all the answers

What is a type of market failure?

<p>All of the above (D)</p> Signup and view all the answers

What is a consequence of asymmetric information?

<p>Decreased market efficiency (C)</p> Signup and view all the answers

What is a possible government intervention to correct market failures?

<p>Providing subsidies for positive externalities (A)</p> Signup and view all the answers

What is a characteristic of imperfect markets?

<p>Presence of externalities and public goods (C)</p> Signup and view all the answers

What is a consequence of market failures?

<p>Inefficient allocation of resources (D)</p> Signup and view all the answers

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

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

What is the primary mechanism that ensures resources are allocated most efficiently in perfect markets?

<p>Long-term dynamics of perfect markets (B)</p> Signup and view all the answers

What is the primary goal of governments in designing competition policies?

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

What is a characteristic of monopolies in terms of revenue and cost curves?

<p>Their marginal revenue curve lies below their demand curve (B)</p> Signup and view all the answers

What is the primary difference between oligopolies and monopolistic competition?

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

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

<p>Firms normalize profits similar to perfect competition (D)</p> Signup and view all the answers

What is the primary consequence of imperfect markets?

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

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

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

What is the primary goal of a firm in imperfect markets?

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

What is the primary characteristic of a kinked demand curve in oligopolies?

<p>It has a kink at the current price point (A)</p> Signup and view all the answers

What is the primary reason for the existence of monopolies?

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

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