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June P2 Easy
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June P2 Easy

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Questions and Answers

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

  • To influence market prices
  • To differentiate products
  • To minimize losses
  • To maximize profit (correct)

    • What is a characteristic of a perfectly competitive market?

  • There are numerous buyers and sellers (correct)
  • The government regulates market prices
  • Products are heterogeneous
  • A single buyer dominates the market

    • What is the significance of perfect information in a perfectly competitive market?

  • It ensures firms have complete control over output
  • It allows the government to regulate the market
  • It prevents firms from influencing market prices (correct)
  • It allows firms to influence market prices

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

    <p>An industry comprises multiple businesses, while an individual business is a single entity</p> Signup and view all the answers

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

    <p>It allows firms to enter or exit the market freely, promoting competition</p> Signup and view all the answers

    What is the significance of total revenue (TR) in decision-making for firms in a perfect market?

    <p>It is a key metric in evaluating output and pricing strategies</p> Signup and view all the answers

    Why are products homogeneous in a perfectly competitive market?

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

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

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

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

    <p>The firm has reached its optimal level of production.</p> Signup and view all the answers

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

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

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

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

    What is an example of a negative externality?

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

    What is the main goal of governments in imperfect markets?

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

    What is a characteristic of monopolies?

    <p>A single firm controls the entire supply of a product or service.</p> Signup and view all the answers

    What is a characteristic of public goods?

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

    What is a characteristic of oligopolies?

    <p>Firms produce differentiated products and are interdependent.</p> Signup and view all the answers

    What is an example of a merit good?

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

    What is the result of imperfect competition in markets?

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

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

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

    What occurs when the price of a product in a monopoly is higher than its marginal cost?

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

    What is the main consequence of asymmetric information in markets?

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

    What is the result of the ease of market entry in monopolistic competition?

    <p>Firms can earn short-term economic profits but not long-term profits.</p> Signup and view all the answers

    What is a consequence of immobility of factors of production?

    <p>Inefficiencies in production</p> Signup and view all the answers

    What is the position of the marginal revenue curve for a monopolist?

    <p>Below the demand curve</p> Signup and view all the answers

    What is a characteristic of oligopolies?

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

    What is the goal of firms in imperfect markets?

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

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

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

    What can occur in an oligopoly due to the interdependence of firms?

    <p>Strategic behaviors like price fixing</p> Signup and view all the answers

    What is a feature of monopolistic competition?

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

    What is the significance of perfect competition in economics?

    <p>It is a benchmark for evaluating real-world market structures.</p> Signup and view all the answers

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

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

    What can be a result of monopolistic competition?

    <p>A variety of products and innovations</p> Signup and view all the answers

    What is a consequence of market failures?

    <p>Social and economic divides</p> Signup and view all the answers

    Why do monopolies often maintain prices higher than their marginal costs?

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

    What is a consequence of imperfect markets?

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

    Why do governments often intervene in imperfect markets?

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

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

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

    What is economic growth defined as?

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

    What does the demand-side approach to economic growth focus on?

    <p>Increasing government expenditure and redistributing income to enhance consumption among lower-income earners</p> Signup and view all the answers

    What is import substitution?

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

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

    <p>Focusing on meeting basic needs, developing human resources, building the economy, democratizing state and society</p> Signup and view all the answers

    What is the North/South divide characterized by?

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

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

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

    What do South African policies incorporate?

    <p>Both demand-side and supply-side approaches to economic growth</p> Signup and view all the answers

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

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

    What is protectionism in international trade?

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

    What is one of the arguments for free trade?

    <p>Promoting specialization and economies of scale</p> Signup and view all the answers

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

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

    What is the difference between economic growth and development?

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

    What is the infant industry argument for protectionism?

    <p>To protect emerging domestic industries that are not yet competitive</p> Signup and view all the answers

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

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

    What is the purpose of import substitution in South Africa?

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

    What is the primary advantage of free trade?

    <p>Enhancing consumer choice and fostering innovation</p> Signup and view all the answers

    What is the significance of understanding protectionism and free trade?

    <p>To grasp the dynamics of global economic interactions</p> Signup and view all the answers

    What is a characteristic of a monopoly?

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

    What is the result of imperfect competition in markets?

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

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

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

    What is a characteristic of oligopolies?

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

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

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

    What is the consequence of allocative inefficiency?

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

    What is the role of product differentiation in monopolistic competition?

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

    What is the consequence of imperfect markets?

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

    What is the result of the interdependence of firms in oligopolies?

    <p>Firms engage in strategic behaviors</p> Signup and view all the answers

    What is the main reason why governments intervene in imperfect markets?

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

    What is the condition that a firm in a perfect market should aim to achieve?

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

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

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

    What is the purpose of government policies in imperfect markets?

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

    What is a characteristic of a monopoly?

    <p>A single firm controls the entire supply of a product</p> Signup and view all the answers

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

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

    What is the result of the ease of market entry in monopolistic competition?

    <p>Firms earn short-term economic profits</p> Signup and view all the answers

    What is a characteristic of imperfect markets?

    <p>Firms face barriers to entry</p> Signup and view all the answers

    What is the goal of firms in imperfect markets?

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

    What is the significance of perfect competition in economics?

    <p>It is a benchmark for evaluating real-world market structures</p> Signup and view all the answers

    What is the result of imperfect competition in markets?

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

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

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

    What is a characteristic of public goods?

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

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

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

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

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

    What is a result of market failures?

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

    What is a characteristic of imperfect markets?

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

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

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

    What is a consequence of asymmetric information in markets?

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

    What is an example of a positive externality?

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

    What is a result of imperfect competition in markets?

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

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

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

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

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

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

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

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

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

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

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

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

    <p>To focus on job creation</p> Signup and view all the answers

    What do South African policies incorporate?

    <p>Both demand-side and supply-side approaches</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>To target halving unemployment and poverty</p> Signup and view all the answers

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

    <p>To ensure resources are used efficiently and enhance social welfare</p> Signup and view all the answers

    What is protectionism in international trade?

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

    What is one of the arguments for free trade?

    <p>Nations can focus on the production of goods for which they have a comparative advantage</p> Signup and view all the answers

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

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

    What is the main goal of governments in imperfect markets?

    <p>To correct market failures and ensure resources are used efficiently</p> Signup and view all the answers

    What is an example of an argument for protectionism?

    <p>Preservation of jobs against the threats posed by cheaper imported goods</p> Signup and view all the answers

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

    <p>Economic growth and development</p> Signup and view all the answers

    What is the North/South divide characterized by?

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

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

    <p>Economic growth and development</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>Economic growth and development</p> Signup and view all the answers

    In a perfectly competitive market, what is the relationship between firms and the market price?

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

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

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

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

    <p>They are homogeneous.</p> Signup and view all the answers

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

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

    What is the main reason why individual businesses in perfectly competitive markets focus on output levels?

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

    What is the significance of marginal revenue in decision-making for firms in a perfect market?

    <p>It helps firms maximize profits.</p> Signup and view all the answers

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

    <p>It ensures that all market players have access to accurate information.</p> Signup and view all the answers

    In a perfectly competitive market, what is the relationship between an industry and individual businesses?

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

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

    <p>They are identical and cannot be differentiated</p> Signup and view all the answers

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

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

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

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

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

    <p>They are price takers</p> Signup and view all the answers

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

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

    What is the purpose of total revenue (TR) in decision-making for firms in a perfect market?

    <p>To decide on the output level</p> Signup and view all the answers

    What is the result of the interaction between individual businesses and the industry in a perfect market?

    <p>The industry's output affects the market price</p> Signup and view all the answers

    What is the key feature of a perfect market that ensures efficient resource allocation?

    <p>Perfect information</p> Signup and view all the answers

    What is a characteristic of monopolies?

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

    What is a key feature of oligopolies?

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

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

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

    What is a consequence of imperfect markets?

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

    What is the goal of government intervention in imperfect markets?

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

    What happens when the marginal revenue equals the marginal cost in a perfectly competitive market?

    <p>The firm should maintain production at the current level</p> Signup and view all the answers

    What is a characteristic of monopolistic competition?

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

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

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

    What happens when the price of a product in a monopoly is higher than its marginal cost?

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

    What is the result of a monopoly's market dominance?

    <p>The monopolist can influence market prices and output levels</p> Signup and view all the answers

    What is a consequence of imperfect markets?

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

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

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

    What is the goal of government intervention in imperfect markets?

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

    Why do governments intervene in imperfect markets?

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

    What is the result of the ease of market entry in monopolistic competition?

    <p>Firms can earn short-term economic profits</p> Signup and view all the answers

    What is a characteristic of oligopolistic competition?

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

    What is the significance of the marginal revenue curve for a monopolist?

    <p>It is below the demand curve</p> Signup and view all the answers

    What is a consequence of monopolistic competition?

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

    What is the main characteristic of imperfect markets?

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

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

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

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

    <p>To increase market efficiency and reduce prices</p> Signup and view all the answers

    What is a characteristic of public goods?

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

    What is an example of a negative externality?

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

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

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

    What is the result of market failures?

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

    What is a characteristic of imperfect competition?

    <p>A few firms producing a differentiated product</p> Signup and view all the answers

    What is the result of asymmetric information in markets?

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

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

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

    What is a consequence of externalities?

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

    What is the result of immobility of factors of production?

    <p>Inefficiencies in the production of goods and services</p> Signup and view all the answers

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

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

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

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

    What is protectionism in international trade?

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

    What is one of the arguments for free trade?

    <p>To specialize in the production of goods for which a nation has a comparative advantage</p> Signup and view all the answers

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

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

    What is import substitution?

    <p>A policy to encourage local production of goods that were previously imported</p> Signup and view all the answers

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

    <p>To promote economic growth and development</p> Signup and view all the answers

    What is the North/South divide characterized by?

    <p>Income inequality and unequal distribution of wealth</p> Signup and view all the answers

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

    <p>To promote economic growth and development</p> Signup and view all the answers

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

    <p>To promote economic growth and development</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 a country's real GDP, while economic development refers to an improvement in standards of living and income equity.</p> Signup and view all the answers

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

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

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

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

    What is the North/South divide characterized by?

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

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

    <p>Targeting halving unemployment and poverty</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>Improving average economic growth</p> Signup and view all the answers

    Which of the following approaches does not involve increasing government expenditure?

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

    What is a characteristic of a perfectly competitive market?

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

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

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

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

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

    What is the main characteristic of a monopoly?

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

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

    <p>It ensures that firms have no influence over market prices</p> Signup and view all the answers

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

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

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

    <p>It ensures that firms have no influence over market prices</p> Signup and view all the answers

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

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

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

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

    What is the result of imperfect competition in markets?

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

    What is the role of revenue metrics in decision-making for firms in a perfect market?

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

    What is the significance of cost concepts in decision-making for firms in a perfect market?

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

    What is the characteristic of monopolistic competition?

    <p>Free entry and exit of firms, but firms selling differentiated products</p> Signup and view all the answers

    What is the position of the marginal revenue curve for a monopolist?

    <p>Below the demand curve</p> Signup and view all the answers

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

    <p>The firm maximizes profit</p> Signup and view all the answers

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

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

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

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

    What is an example of a negative externality?

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

    What is the goal of firms in imperfect markets?

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

    What is a characteristic of public goods?

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

    What is the consequence of imperfect markets?

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

    What is a consequence of market failures?

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

    What type of market failure occurs when the production or consumption of goods and services imposes costs or benefits on others not reflected in market prices?

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

    What is the result of imperfect competition in markets?

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

    What is a consequence of asymmetric information in markets?

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

    What is the result of immobility of factors of production?

    <p>Inefficiencies in the production of goods and services</p> Signup and view all the answers

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

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

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

    <p>Regulating prices and providing public goods</p> Signup and view all the answers

    What is a characteristic of monopolies?

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

    What is the result of imperfect competition in markets?

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

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

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

    What is the shape of the demand curve for a monopolist?

    <p>Downward sloping.</p> Signup and view all the answers

    What is a characteristic of oligopolies?

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

    What is the result of the ease of market entry in monopolistic competition?

    <p>Firms earn just normal profits in the long run.</p> Signup and view all the answers

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

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

    What can occur in an oligopoly due to the interdependence of firms?

    <p>Strategic behaviors like price fixing and collusive practices.</p> Signup and view all the answers

    What is the significance of imperfect markets in economics?

    <p>They provide a realistic depiction of most real-world markets.</p> Signup and view all the answers

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

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

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

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

    What is protectionism in international trade?

    <p>A government action to restrict international trade</p> Signup and view all the answers

    What is the infant industry argument for protectionism?

    <p>To protect emerging domestic industries from international competition</p> Signup and view all the answers

    What is one of the benefits of free trade?

    <p>Increased access to goods and services</p> Signup and view all the answers

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

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

    What is the purpose of import substitution in South Africa?

    <p>To strengthen domestic industries and reduce dependency on foreign goods</p> Signup and view all the answers

    What is the North/South divide characterized by?

    <p>Income inequality between countries</p> Signup and view all the answers

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

    <p>Economic development and income redistribution</p> Signup and view all the answers

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

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

    What is economic growth defined as?

    <p>An increase in economic output or income per capita</p> Signup and view all the answers

    What does economic growth refer to?

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

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

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

    What is import substitution?

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

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

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

    What is the North/South divide characterized by?

    <p>A significant disparity in income levels, economic stability, and access to resources between developed and developing countries.</p> Signup and view all the answers

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

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

    What do South African policies incorporate?

    <p>Both demand-side and supply-side approaches to economic growth.</p> Signup and view all the answers

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

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

    What is a characteristic of a perfectly competitive market?

    <p>Freedom of entry and exit</p> Signup and view all the answers

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

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

    Why are products homogeneous in a perfectly competitive market?

    <p>To eliminate product differentiation</p> Signup and view all the answers

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

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

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

    <p>They are price takers</p> Signup and view all the answers

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

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

    What is an industry in a perfectly competitive market?

    <p>Multiple businesses producing identical products</p> Signup and view all the answers

    What is the significance of total revenue (TR) in decision-making for firms in a perfect market?

    <p>It is used to make output and pricing decisions</p> Signup and view all the answers

    What is a key feature of monopolies?

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

    What is a consequence of imperfect competition in markets?

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

    What is a characteristic of oligopolies?

    <p>Few firms producing differentiated products</p> Signup and view all the answers

    Which of the following is a characteristic of a monopoly?

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

    What happens when marginal revenue equals marginal cost in a firm?

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

    What is the goal of government intervention in imperfect markets?

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

    What is the result of the dynamics of imperfect markets?

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

    What is a feature of monopolistic competition?

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

    What is the goal of government intervention in imperfect markets?

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

    What is a consequence of imperfect markets?

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

    Why do monopolies often maintain prices higher than their marginal costs?

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

    What is a characteristic of oligopolies?

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

    What is a result of the dynamics of imperfect markets?

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

    What is the result of the ease of market entry in monopolistic competition?

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

    What is the significance of perfect competition in economics?

    <p>It is a benchmark for evaluating real-world market structures</p> Signup and view all the answers

    What is a characteristic of oligopolistic markets?

    <p>Firms have some influence over market prices</p> Signup and view all the answers

    What is the result of the ease of market entry in monopolistic competition?

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

    What is a characteristic of monopolistic competition?

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

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

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

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

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

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

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

    What is an example of a positive externality?

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

    What is the consequence of imperfect competition in markets?

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

    What is a characteristic of public goods?

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

    What is a consequence of asymmetric information in markets?

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

    What is a market failure?

    <p>A situation where the price mechanism fails to allocate resources efficiently</p> Signup and view all the answers

    What is a consequence of immobility of factors of production?

    <p>Inefficiencies in the production of goods and services</p> Signup and view all the answers

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

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

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

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

    What is the result of the interdependence of firms in oligopolies?

    <p>Uncertainty and price volatility</p> Signup and view all the answers

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

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

    What is protectionism in international trade?

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

    What is the infant industry argument for protectionism?

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

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

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

    What is import substitution?

    <p>A method to encourage local production of goods that were previously imported</p> Signup and view all the answers

    What is free trade?

    <p>A policy to eliminate discrimination against imports and exports</p> Signup and view all the answers

    What is a benefit of free trade?

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

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

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

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

    <p>Income redistribution</p> Signup and view all the answers

    What is a goal of governments in imperfect markets?

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

    What is economic growth defined as?

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

    What is import substitution?

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

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

    <p>Focusing on meeting basic needs, developing human resources, building the economy, and democratizing state and society.</p> Signup and view all the answers

    What is the North/South divide characterized by?

    <p>A significant disparity in income levels, economic stability, and access to resources between developed and developing countries.</p> Signup and view all the answers

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

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

    What do South African policies incorporate?

    <p>Both demand-side and supply-side approaches to economic growth.</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>Focusing on job creation and identifying job drivers like infrastructure and agriculture.</p> Signup and view all the answers

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