336 Questions
What is the primary objective of a firm in a perfect market?
To maximize profit
What characterizes a perfectly competitive market?
Homogeneous products and perfect information
What is the significance of perfect information in a perfect market?
It prevents single entities from influencing market prices
What is the role of individual businesses in a perfect market?
Price takers
What is the distinction between an industry and an individual business in a perfect market?
An industry comprises multiple businesses producing identical products
What metric do businesses in a perfect market focus on?
Various revenue metrics, including total revenue (TR), average revenue (AR), and marginal revenue (MR)
What is the significance of marginal cost (MC) in a perfect market?
It is a pivotal concept in decision-making, especially concerning output and pricing strategies
What is a characteristic of a perfect market?
Complete mobility of factors of production
What is the main difference between economic growth and economic development?
Economic growth focuses on real GDP, while economic development includes standards of living and income equity
What is the purpose of import substitution in the demand-side approach to economic growth?
To retain economic benefits within the country by producing goods domestically
Which of the following is an example of a supply-side approach to economic growth?
Improving the quality of the labor force
What is the main goal of the Reconstruction and Development Programme (RDP) in South Africa?
To meet basic needs and develop human resources
What is the main characteristic of the economic divide between the North and South?
A significant disparity in income levels, economic stability, and access to resources
What is the primary focus of the New Growth Path (NGP) in South Africa?
Job creation and identifying job drivers
What is the purpose of Accumulating Capital Goods in the supply-side approach to economic growth?
To invest in infrastructure and technology to enhance production capacity
What is a characteristic of a monopoly?
A single firm dominating the market with no close substitutes
What is the primary evaluation criteria for South African approaches to economic growth?
Effectiveness in reducing poverty, inequality, and unemployment
What is the primary goal of government regulations in imperfect markets?
To control monopolistic and oligopolistic powers and protect consumer interests
What is a key feature of oligopolies?
Interdependence of firms
What is the outcome of monopolistic competition in the long run?
Firms earn normal profits
What is a consequence of imperfect markets?
Allocative and productive inefficiencies
What is a characteristic of monopolistic competition?
Many firms selling differentiated products
Why do monopolies maintain prices above their marginal costs?
To maintain market power and limit competition
What is a result of oligopolies adopting a kinked demand curve?
Stabilization of prices above competitive levels
What is a consequence of monopolies and oligopolies?
Lower output and higher prices
What is the primary reason for the existence of monopolies?
Barriers to entry, such as patents and regulatory measures
What is a common reason for government intervention in markets with monopolies and oligopolies?
To increase market competition and reduce inefficiencies
What is an example of a negative externality?
Pollution
What is the primary purpose of cost-benefit analysis in public policy?
To evaluate the social costs and benefits of interventions
What is a characteristic of public goods?
Non-excludable and non-rivalrous
What is protectionism?
Government actions and policies that restrict or restrain international trade
What is a consequence of imperfect competition?
Higher prices and reduced output
What is the main argument for protecting infant industries?
To protect emerging domestic industries from foreign competition
What is an example of asymmetric information?
Sellers knowing about defects in used cars
What is the main benefit of free trade?
Promotes specialization and economies of scale
What is the main goal of South Africa's export promotion policies?
To encourage local firms to export their goods
What is a possible consequence of market failures?
Economic inequities and social divides
What is a type of market failure?
Externalities
What is the main focus of economic growth and development strategies?
To increase economic growth
What is the primary challenge posed by the North/South divide?
Income inequality
What is a possible government intervention to correct market failures?
Imposing taxes on negative externalities
What is a type of inefficiency that occurs when resources are not allocated according to consumer preferences?
Allocative inefficiency
What is the main difference between economic growth and development?
Economic growth focuses on quantitative measures, while development focuses on qualitative measures
What is a possible cause of market failures?
Immobility of factors of production
What is the main goal of South Africa's import substitution policies?
To encourage local production of goods
What is the main benefit of economic growth?
Increases the potential for economic growth
What occurs when the marginal cost of producing an additional unit equals the marginal revenue obtained from selling that unit?
Profits are maximized
What is the primary goal of governments in designing competition policies?
To enhance economic efficiency
What characterizes imperfect markets?
Lack of perfect competition
What is a characteristic of a monopoly?
A single company controls the entire supply
What is true about oligopolies?
Firms produce differentiated products
What is a key feature of monopolistic competition?
Firms produce differentiated products
What happens to profits in monopolistically competitive markets in the long run?
Firms earn normal profits
What influences the dynamics of imperfect markets?
Interplay of cost and revenue curves, market structure, and firm behavior
What is the goal of firms in imperfect markets?
To maximize profits
Why do monopolists face a downward-sloping demand curve?
Because they have significant market power
What is the main characteristic of products in a perfectly competitive market?
Homogeneous products
What is the primary goal of a firm in a perfect market?
Maximize profit
What is the significance of perfect information in a perfect market?
Ensures that no single entity can wield undue influence
What is the characteristic of individual businesses in perfectly competitive markets?
Price takers
What is revenue metrics that businesses in a perfect market focus on?
Total revenue (TR), average revenue (AR), and marginal revenue (MR)
What is the significance of marginal cost (MC) in decision-making?
Determining output levels
What is the characteristic of a perfect market?
Complete mobility of factors of production
What is the primary objective of a firm in a perfect market?
Maximize profit
What is the primary objective of cost-benefit analysis in public policy?
To evaluate the social costs and benefits of interventions aimed at correcting market failures.
What is the main argument for protectionism?
To protect emerging domestic industries.
What is one of the benefits of free trade?
Increased specialization.
What is the main goal of South Africa's import substitution policies?
To encourage local production of goods that were previously imported.
What is a potential consequence of market failures?
All of the above.
What is the primary focus of economic growth and development strategies?
To promote economic growth and development through sustainable income redistribution strategies.
What is a characteristic of public goods?
They are non-rival in consumption and non-excludable.
What is the main goal of government interventions in markets with monopolies and oligopolies?
To correct market failures and promote competition.
What is a type of market failure?
All of the above.
What is the primary challenge posed by the North/South divide?
Income inequality.
What is the primary reason for government intervention in markets with monopolies and oligopolies?
To increase market transparency and reduce inefficiencies
What is an example of a positive externality?
Education
What is a consequence of imperfect markets?
Reduced social welfare
What is a type of market failure?
Externalities
What is a characteristic of public goods?
Non-excludable and non-rivalrous
What is a cause of market failures?
Immobility of factors of production
What is the primary goal of government intervention in imperfect markets?
To correct market failures and increase efficiency
What is an example of asymmetric information?
Sellers knowing about defects in used cars
What is a consequence of imperfect competition?
Higher prices and reduced output
What is the main goal of government regulation in imperfect markets?
To increase market competition and reduce inefficiencies
What happens when the marginal revenue (MR) exceeds the marginal cost (MC) in a perfect market?
The firm should increase production to enhance profits.
What is the primary goal of governments in designing competition policies?
To enhance economic efficiency and prevent monopolies.
What is a characteristic of firms in a monopolistically competitive market?
They engage in non-price competition.
What is the result of long-term dynamics in perfect markets?
Firms make normal profits but no economic profits.
What is a characteristic of oligopolies?
They are interdependent and may engage in collusion.
What is the primary aim of the Redistribution of Income policy in the demand-side approach to economic growth?
To enhance consumption among lower-income earners
What is the outcome of profit maximization in imperfect markets?
Firms maximize profits where marginal revenue equals marginal cost.
What is a characteristic of monopolies?
They face a downward-sloping demand curve.
Which of the following approaches focuses on improving the quality of the labor force in the supply-side approach to economic growth?
Improving the Quality of the Labor Force
What is the significance of perfect competition in economics?
It provides a benchmark for evaluating real-world market structures.
What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?
To halve unemployment and poverty
What is the human divide characterized by?
A disparity in the standard of living, as indicated by the Human Development Index (HDI)
What is the consequence of imperfect markets on resource allocation?
Resources are allocated inefficiently.
What is the primary goal of governments in regulating imperfect markets?
To enhance economic efficiency and prevent monopolies.
What is the primary focus of the New Growth Path (NGP) in South Africa?
To identify job drivers like infrastructure and agriculture
Which of the following approaches incorporates both demand-side and supply-side approaches to economic growth?
South African policies
What is the main characteristic of the economic divide between the North and South?
All of the above
What is the primary evaluation criterion for South African approaches to economic growth?
Their effectiveness in reducing poverty and inequality
What is a key feature of monopolies?
Control over essential resources
What is a consequence of monopolies and oligopolies?
Higher prices and lower output
What is a characteristic of oligopolies?
Interdependence of firms
What is a result of monopolistic competition?
Similar to perfect competition in the long run
Why do governments intervene in imperfect markets?
To enhance competitive outcomes and protect consumer interests
What is a consequence of imperfect markets?
Allocative and productive inefficiencies
What is a characteristic of monopolistic competition?
Many firms selling differentiated products
What is the outcome of oligopolies adopting a kinked demand curve?
Stabilization of prices above competitive levels
What is a common reason for government intervention in imperfect markets?
To protect consumer interests and promote competition
What is the primary focus of understanding imperfect markets?
To understand the dynamics of real-world markets
What is the primary consequence of market failures?
Net social welfare loss
What is an example of a positive externality?
Education
What is the primary cause of allocative inefficiency?
Imperfect competition
What is the role of government intervention in markets with monopolies and oligopolies?
To increase market transparency and consumer information
What is the primary consequence of asymmetric information?
Choices that do not maximize welfare
What is an example of a merit good?
Health care
What is the primary characteristic of public goods?
Non-excludable and non-rivalrous
What is the primary cause of productive inefficiency?
Not using resources to their full potential
What is the primary goal of government intervention in markets with externalities?
To correct market failures
What is the primary consequence of market failures on income and wealth distribution?
Imperfect distribution of income and wealth
What is the primary driver of firm entry and exit in perfectly competitive markets?
Profitability
What is the characteristic of a monopolist's demand curve?
Downward-sloping
What is a key characteristic of products in a perfectly competitive market?
They are homogeneous with little to no differentiation.
What is the primary goal of governments in promoting perfect competition?
To enhance economic efficiency
What is the characteristic of oligopolies in terms of revenue and cost curves?
The demand curve exhibits a kinked shape
What is the primary goal of a firm in a perfect market?
To maximize profit.
What is the significance of freedom of entry and exit in a perfectly competitive market?
It prevents firms from influencing market prices.
What is the outcome of monopolistic competition in the long run?
Firms normalize their profits
What is the role of individual businesses in a perfectly competitive market?
They are price takers.
What is the primary characteristic of imperfect markets?
Lack of perfect competition
What is the primary goal of firms in imperfect markets?
To maximize economic profits
What is the significance of total revenue (TR) in a perfectly competitive market?
It is the total income earned from sales.
What is the significance of average cost (AC) in a perfectly competitive market?
It is the cost per unit of production.
What is the primary consequence of imperfect markets?
Market inefficiency
What is the primary characteristic of a monopolistically competitive market?
Many firms sell differentiated products
What is the significance of marginal revenue (MR) in a perfectly competitive market?
It is the revenue earned from selling one additional unit.
What is the primary role of competition policies in imperfect markets?
To enhance economic efficiency
What is the significance of marginal cost (MC) in a perfectly competitive market?
It is the cost of producing one additional unit.
Which type of market structure is characterized by a single firm dominating the entire market?
Monopoly
What is a consequence of imperfect markets?
Allocative and productive inefficiencies
What is a key feature of oligopolies?
Firms are interdependent in their decision-making
What is the outcome of monopolistic competition in the long run?
Firms earning just normal profits
Why do governments intervene in imperfect markets?
To enhance competitive outcomes and protect consumer interests
What is a characteristic of monopolistic competition?
Firms selling differentiated products
What is a consequence of monopolies and oligopolies?
Higher prices and lower output
What is the primary goal of governments in regulating imperfect markets?
To protect consumer interests and enhance competitive outcomes
What is a characteristic of oligopolies?
Firms adopting a kinked demand curve
What is the primary reason for government intervention in imperfect markets?
To correct market failures and promote efficient outcomes
What is the primary focus of the demand-side approach to economic growth?
Increasing government expenditure and redistribution of income
Which of the following is a characteristic of economic development?
Encompasses improvements in standards of living and income equity
What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?
Reducing unemployment and poverty
What is the Human Development Index (HDI) used to measure?
Standard of living, health, education, and income
What is the main difference between the North and South in terms of economic development?
Income levels and access to resources
What is the primary evaluation criteria for South African approaches to economic growth?
Their effectiveness in reducing poverty, inequality, and unemployment
What is the primary purpose of cost-benefit analysis in public policy?
To evaluate the social costs and benefits of a project
What is the main goal of South Africa's Reconstruction and Development Programme (RDP)?
Meeting basic needs and developing human resources
What is the primary goal of South Africa's export promotion policies?
To encourage local firms to export goods and increase participation in the global market
What is the primary focus of the supply-side approach to economic growth?
Improving the quality of the labor force and managing natural resources
What is a common argument for protecting infant industries?
To safeguard jobs against cheaper imported goods
What is the primary benefit of free trade?
It promotes specialization and economies of scale
What is the primary goal of governments in designing competition policies?
To correct market failures and ensure efficient allocation of resources
What is the primary challenge posed by the North/South divide?
Income inequality between developed and developing countries
What is the primary goal of South Africa's import substitution policies?
To encourage local production of goods that were previously imported
What is the primary consequence of market failures?
Inefficient allocation of resources
What is the primary focus of economic growth and development strategies?
To encourage economic growth and development through sustainable income redistribution
What is a possible consequence of imperfect competition?
Inefficient allocation of resources
In a perfect market, what is the result of the lack of differentiation between goods sold by different sellers?
No single entity can wield undue influence over the market
What is the primary distinction between an industry and an individual business in a perfect market?
An industry is a collection of businesses, while an individual business is a single entity
What is the purpose of marginal revenue (MR) in decision-making for businesses in a perfect market?
To determine the optimal output level of a firm
What is the significance of complete mobility of factors of production in a perfect market?
It ensures that resources are allocated efficiently
What is the relationship between the market price and the output level of individual businesses in a perfect market?
Individual businesses can only control their output levels
What is the primary goal of businesses in a perfect market?
To maximize profits
What is the significance of homogeneous products in a perfect market?
It ensures that no single entity can wield undue influence over the market
What is the result of freedom of entry and exit in a perfect market?
It ensures that resources are allocated efficiently
What is the primary focus of the demand-side approach to economic growth?
Increasing government expenditure and redistribution of income
Which of the following is NOT a characteristic of the economic divide between the North and South?
Similar access to resources
What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?
Halving unemployment and poverty
What is the primary evaluation criterion for South African approaches to economic growth?
Effectiveness in reducing poverty and inequality
What is the primary focus of the supply-side approach to economic growth?
Improving the quality of the labor force and managing natural resources
What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?
Meeting basic needs and developing human resources
What is the primary characteristic of South African policies on economic growth?
Incorporation of both demand-side and supply-side approaches
What is the primary difference between economic growth and economic development?
Economic growth refers to an increase in real GDP, while economic development encompasses improvements in standards of living
What is the primary consequence of imperfect markets?
Allocative and productive inefficiencies
What is the primary characteristic of a monopoly?
A single firm dominating the market
What is the primary goal of government regulations in imperfect markets?
To control monopolistic and oligopolistic powers
What is the primary feature of oligopolies?
Interdependence of firms
What occurs in monopolistic competition?
Firms have some control over prices due to product differentiation
What is the primary goal of firms in imperfect markets?
To maximize economic profits in the long run
What is the result of the interplay of cost and revenue curves in imperfect markets?
Firms maximize profits where marginal revenue equals marginal cost
What is the outcome of monopolies and oligopolies?
Higher prices and lower output
What is the primary purpose of cost-benefit analysis in public policy?
To evaluate the social costs and benefits of government interventions
Why do monopolies and oligopolies generate sustained profits?
Due to barriers to entry
What is the main argument for protectionism?
To safeguard jobs and preserve local industries
What is the primary reason for government intervention in markets with monopolies and oligopolies?
To increase market competition and reduce inefficiencies
What is the primary reason for the existence of imperfect markets?
Lack of perfect competition due to barriers to entry
What is the primary consequence of imperfect competition?
Allocative and productive inefficiencies
What is a characteristic of oligopolies?
A few firms dominate a market, often leading to non-price competition
What is a benefit of free trade?
Enhanced consumer choice and improved international relations
What is an example of a positive externality?
Education
What is the outcome of monopolistic competition in the long run?
Firms normalize their profits, similar to perfect competition
What is the primary goal of South Africa's export promotion policies?
To increase participation in the global market and promote economic growth
What is a characteristic of public goods?
They are non-excludable and non-rivalrous
What is the primary goal of understanding imperfect markets?
To understand the dynamics of real-world markets
What is the primary goal of governments in designing competition policies?
To dismantle barriers to entry and ensure a level playing field
What can lead to redundant expenditures on advertising and marketing in monopolistic competition?
Non-price competition
What is the consequence of imperfect distribution of income and wealth?
It prevents market economies from being efficient
What is a characteristic of imperfect markets?
Government intervention and imperfect information
What is a characteristic of monopolistic competition?
Many firms sell products that are differentiated but serve a similar purpose
What is the main goal of economic growth and development strategies?
To encourage economic growth and development through efficient allocation of resources
What is an example of a merit good?
Health care
What is the consequence of asymmetric information?
It leads to choices that do not maximize welfare
What is the consequence of imperfect markets?
Market inefficiencies occur, leading to a misallocation of resources
What is a consequence of market failures?
Inefficiency and misallocation of resources
What is the primary focus of governments in regulating imperfect markets?
To prevent market failures and ensure a level playing field
What is the primary challenge posed by the North/South divide?
Income inequality and unequal distribution of resources
What is the primary goal of government intervention in markets with externalities?
To correct market failures
What is a consequence of immobility of factors of production?
It leads to inefficiencies in the production of goods and services
What is the result of the dynamic equilibrium in perfect markets?
Resources are allocated most efficiently, reflecting the virtues of perfect competition
What is a possible government intervention to correct market failures?
Implementing cost-benefit analysis and designing interventions
What is the primary goal of government intervention in markets with imperfect competition?
To increase market competition and reduce inefficiencies
What is the main difference between economic growth and economic development?
Economic growth focuses on increasing GDP, while economic development focuses on improving living standards
What is a characteristic of market failures?
They lead to a net social welfare loss
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?
Firms achieve maximum profits.
What is the primary goal of governments in designing competition policies?
To emulate the conditions of perfect competition
In a monopolistically competitive market, what happens to economic profits in the long run?
Economic profits tend to normalize due to ease of entry.
What is a characteristic of oligopolies?
Firms engage in non-price competition.
What is a consequence of imperfect markets?
Markets are characterized by market inefficiencies.
In a monopoly, what allows the monopolist to act as a price setter?
Patents and resource control.
What is a key feature of monopolistic competition?
Firms engage in non-price competition and differentiate their products.
What is the primary objective of firms in imperfect markets?
To achieve maximum profits.
What is a characteristic of perfect competition?
Resources are allocated efficiently.
What is the dynamic equilibrium in perfect markets?
Firms make normal profits, but no economic profits, in the long run.
In a perfectly competitive market, what is the primary reason why individual businesses cannot influence market prices?
Because they are too small relative to the size of the market
What is the primary benefit of homogeneous products in a perfectly competitive market?
It ensures that no single entity can wield undue influence over the market
What is the primary objective of a firm in a perfectly competitive market when deciding on output levels?
To maximize profit by producing at a level where marginal cost equals marginal revenue
What is the primary difference between an industry and an individual business in a perfectly competitive market?
An industry is the sum of individual businesses' outputs, while an individual business is a part of the industry
What is the primary reason why governments do not regulate perfectly competitive markets?
Because the government believes that the market is efficient and self-regulating
What is the primary significance of average revenue in a perfectly competitive market?
It is the revenue earned by a firm from selling a single unit of a product
What is the primary reason why imperfect markets result in allocative and productive inefficiencies?
The price of the product is not equal to its marginal cost.
What is the primary consequence of freedom of entry and exit in a perfectly competitive market?
It ensures that no single entity can wield undue influence over the market
How do monopolies and oligopolies maintain their market power?
Through barriers to entry and control over essential resources.
What is the primary difference between total revenue and marginal revenue in a perfectly competitive market?
Total revenue is the revenue earned from selling multiple units, while marginal revenue is the revenue earned from selling one additional unit
What is the primary difference between monopolies and oligopolies?
The number of firms in the market.
What is the primary reason why firms in monopolistic competition earn only normal profits in the long run?
Ease of market entry.
What is the primary consequence of imperfect markets on economic welfare?
Welfare losses to society.
What is the primary goal of government regulations in imperfect markets?
To enhance competitive outcomes and protect consumer interests.
What is the primary characteristic of an oligopoly?
Firms are interdependent and make decisions based on each other's actions.
What is the primary difference between monopolistic competition and perfect competition?
The level of product differentiation.
What is the primary consequence of monopolies and oligopolies on market prices?
Prices are higher than marginal cost.
What is the primary reason why imperfect markets are more realistic than perfect competition?
They are more common in real-world markets.
Which of the following approaches focuses on improving the quality of the labor force to enhance productivity?
Supply-side Approach
What is the primary goal of the Growth, Employment and Redistribution (GEAR) policy in South Africa?
Market-led growth and fiscal discipline
Which of the following best describes the Human Development Index (HDI)?
A measure of health, education, and income
What is the primary focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?
Halving unemployment and poverty
What is the primary reason for government intervention in markets with monopolies and oligopolies?
To increase market competition and reduce inefficiencies
Which of the following approaches does not focus on stimulating economic activity through government expenditure?
Supply-side Approach
Which of the following market failures is characterized by the underproduction of goods and services in private markets?
Public Goods
What is the consequence of imperfect distribution of income and wealth in a market economy?
Underproduction of basic goods and services
What is the primary characteristic of the economic divide between the North and South?
A significant disparity in income levels
What is the primary goal of government intervention in correcting market failures?
To promote social welfare
Which of the following policies is not a supply-side approach to economic growth?
Redistributing income
Which of the following is an example of a positive externality?
Education
What is the primary evaluation criterion for South African approaches to economic growth?
Effectiveness in reducing poverty and inequality
What is the consequence of asymmetric information in markets?
Reduced consumer welfare
What is the primary consequence of imperfect competition in markets?
Allocative inefficiency
What is the primary goal of government regulations in markets with externalities?
To protect the environment
Which of the following is a consequence of market failures in terms of economic efficiency?
Productive inefficiency
What is the primary goal of government intervention in markets with public goods?
To provide public goods directly
What is the primary purpose of conducting a cost-benefit analysis in public policy?
To evaluate the social costs and benefits of interventions aimed at correcting market failures
Which of the following is a characteristic of protectionism?
Restricting international trade to protect local businesses and jobs
What is the primary benefit of free trade, according to the concept of specialization?
Focusing on the production of goods for which a nation has a comparative advantage
Which of the following is an argument for free trade?
Access to a wider variety of goods and services at lower prices
What is the primary goal of South Africa's export promotion policies?
To increase participation in the global market and promote economic growth
What is a common challenge posed by the North/South divide?
Income inequality between nations
Which of the following is a possible consequence of market failures?
Inefficient allocation of resources
What is the primary goal of governments in designing competition policies?
To correct market failures and ensure efficient allocation of resources
What is a characteristic of imperfect markets?
Existence of externalities and information asymmetry
What is the primary focus of economic growth and development strategies?
Fostering economic growth and development through sustainable income redistribution
In a perfectly competitive market, what is the primary reason why individual businesses are price takers?
The numerous buyers and sellers make it impossible for individual entities to influence market prices.
What is the significance of perfect information in a perfect market?
It ensures that buyers and sellers have access to all relevant market information, preventing any single entity from wielding undue influence.
What is the distinction between average revenue and marginal revenue in a perfectly competitive market?
Average revenue refers to the total revenue earned by a firm, while marginal revenue is the additional revenue earned from selling one more unit.
What is the significance of marginal cost in the decision-making process of a firm in a perfect market?
It determines the optimal level of production and the selling price of the product.
What is the primary objective of a firm in a perfect market?
To maximize profits
In a perfect market, what is the relationship between the demand curve of an individual firm and the market demand curve?
The demand curve of an individual firm is horizontal, while the market demand curve is downward sloping.
What is the significance of the concept of total revenue in a perfect market?
It refers to the revenue earned by the firm from selling all units.
What is the relationship between the output level and the marginal revenue of a firm in a perfect market?
As output increases, marginal revenue decreases.
What is a key feature of imperfect markets that distinguishes them from perfect competition?
Firms can influence market prices.
What is a consequence of imperfect markets?
Higher prices and lower output
What is a characteristic of monopolistic competition?
Firms have some control over prices due to product differentiation.
Why do oligopolies often adopt a kinked demand curve?
To discourage competitive price changes
What is the primary reason for government intervention in imperfect markets?
To protect consumer interests
What is a consequence of underutilization of resources in imperfect markets?
Allocative and productive inefficiencies
What is a characteristic of monopolies?
A single firm dominates the entire market.
What is the outcome of imperfect competition in the long run?
Firms earn normal profits.
What is the primary goal of government regulations in imperfect markets?
To protect consumer interests
What is a consequence of market power in imperfect markets?
Higher prices and lower output
What is the primary purpose of cost-benefit analysis in public policy?
To evaluate the social costs and benefits of interventions aimed at correcting market failures
What is the main argument for protecting infant industries?
To protect emerging domestic industries that are not yet competitive enough to withstand international competition
What is the primary goal of South Africa's export promotion policies?
To encourage local firms to export their goods, thereby increasing participation in the global market
What is the main characteristic of public goods?
They are non-excludable and non-rivalrous
What is the primary benefit of free trade?
It increases the potential for economic growth through expanded markets and investment opportunities
What is the primary challenge posed by the North/South divide?
Income inequality
What is the primary goal of government regulations in imperfect markets?
To correct market failures
What is the main consequence of monopolies and oligopolies?
Inefficient allocation of resources
What is the primary focus of economic growth and development strategies?
To address income inequality and promote sustainable development
What is the primary goal of South Africa's import substitution policies?
To encourage local production of goods that were previously imported to strengthen domestic industries and reduce dependency on foreign goods
What is the main difference between economic growth and economic development?
Economic growth refers to an increase in real GDP, while economic development includes improvements in standards of living.
Which approach to economic growth focuses on increasing government expenditure and income redistribution?
Demand-side approach
What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?
To reduce poverty and unemployment by half
What is the main characteristic of the economic divide between the North and South?
A significant disparity in income levels and access to resources
What is the primary focus of the Reconstruction and Development Programme (RDP) in South Africa?
To focus on meeting basic needs, developing human resources, and building the economy
What is the primary goal of the supply-side approach to economic growth?
To improve the quality of the labor force, manage natural resources, and invest in infrastructure and technology
What is the primary evaluation criterion for South African approaches to economic growth?
Effectiveness in reducing poverty, inequality, and unemployment
What is the primary focus of the New Growth Path (NGP) in South Africa?
To identify job drivers like infrastructure and agriculture
What is the primary reason for government intervention in markets with monopolies and oligopolies?
To increase market competition and reduce inefficiencies
What is a characteristic of public goods?
They are non-excludable and non-rivalrous
What is an example of a negative externality?
Pollution
What is a consequence of imperfect competition?
Increased prices and reduced output
What is a type of market failure?
All of the above
What is a consequence of asymmetric information?
Decreased market efficiency
What is a possible government intervention to correct market failures?
Providing subsidies for positive externalities
What is a characteristic of imperfect markets?
Presence of externalities and public goods
What is a consequence of market failures?
Inefficient allocation of resources
What is the primary goal of government regulation in imperfect markets?
To increase market competition and reduce inefficiencies
What is the primary mechanism that ensures resources are allocated most efficiently in perfect markets?
Long-term dynamics of perfect markets
What is the primary goal of governments in designing competition policies?
To emulate the conditions of perfect competition
What is a characteristic of monopolies in terms of revenue and cost curves?
Their marginal revenue curve lies below their demand curve
What is the primary difference between oligopolies and monopolistic competition?
Level of product differentiation
What is the outcome of monopolistic competition in the long run?
Firms normalize profits similar to perfect competition
What is the primary consequence of imperfect markets?
Market inefficiencies
What is the primary reason for government intervention in markets with monopolies and oligopolies?
To protect consumer interests
What is the primary goal of a firm in imperfect markets?
To maximize profits
What is the primary characteristic of a kinked demand curve in oligopolies?
It has a kink at the current price point
What is the primary reason for the existence of monopolies?
Barriers to entry
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