June P2 Med
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Questions and Answers

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

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

What is a characteristic of a perfectly competitive market?

  • Government regulation
  • A single buyer and seller
  • Homogeneous products (correct)
  • Mobility of labor only

What is the role of an individual business in a perfect market?

  • Industry regulator
  • Price maker
  • Market controller
  • Price taker (correct)

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

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

What is the total output of an industry in a perfect market?

<p>The sum of individual businesses' outputs (C)</p> Signup and view all the answers

What is the purpose of cost concepts in a perfect market?

<p>To make decisions concerning output and pricing strategies (D)</p> Signup and view all the answers

What is a characteristic of a perfectly competitive market?

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

What is the relationship 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 is the key to achieving profit maximization in a firm?

<p>When marginal revenue equals marginal cost (D)</p> Signup and view all the answers

What characterizes a perfect market?

<p>Firms have complete knowledge of the market (D)</p> Signup and view all the answers

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

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

What is the goal of competition policies in perfect markets?

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

What is a characteristic of an oligopoly?

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

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

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

What is a characteristic of monopolistic competition?

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

What happens to economic profits in the long run in monopolistic competition?

<p>Economic profits normalize (B)</p> Signup and view all the answers

What is a barrier to entry in a monopoly?

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

What is the goal of firms in imperfect markets?

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

What is a characteristic of imperfect markets?

<p>They often result in higher prices and lower output compared to perfect competition. (B)</p> Signup and view all the answers

What is a goal of government regulations 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 monopolies?

<p>A single firm dominates the entire market for a product or service. (A)</p> Signup and view all the answers

What is an implication of oligopolies?

<p>Firms engage in strategic behaviors like price fixing and advertising. (A)</p> Signup and view all the answers

What is a characteristic of monopolistic competition?

<p>Firms sell differentiated products that are not perfect substitutes. (C)</p> Signup and view all the answers

What is a potential outcome of monopolies and oligopolies?

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

Why do monopolies generate sustained profits in the long term?

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

What is a consequence of strategic behaviors in oligopolies?

<p>Prices are stabilized above competitive levels. (A)</p> Signup and view all the answers

What is a result of monopolistic competition?

<p>Firms earn only normal profits in the long run due to ease of market entry. (B)</p> Signup and view all the answers

What is a potential drawback of monopolistic competition?

<p>There are redundant expenditures on advertising and marketing. (B)</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 (C)</p> Signup and view all the answers

What is the definition of protectionism?

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

What is one of the arguments for free trade?

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

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

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

What is the definition of free trade?

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

What is one of the arguments against free trade?

<p>Preservation of jobs (A)</p> Signup and view all the answers

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

<p>To reduce dependency on imports (C)</p> Signup and view all the answers

What is a major trade protocol that South Africa is involved in?

<p>SACU (Southern African Customs Union) (D)</p> Signup and view all the answers

What is the main difference between economic growth and development?

<p>Economic growth focuses on increasing GDP, while economic development focuses on reducing income inequality (C)</p> Signup and view all the answers

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

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

What is a common consequence of market failures?

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

What is an example of a negative externality?

<p>Pollution (B)</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 a result of imperfect competition in a market?

<p>Higher prices and reduced output (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 a consequence of asymmetric information in a market?

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

What is a goal of government intervention in markets with failures?

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

What can lead to underproduction of public goods in private markets?

<p>Firms cannot easily charge users (B)</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 and services (B)</p> Signup and view all the answers

What is a type of market failure that can lead to environmental degradation?

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

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

<p>Economic growth focuses on GDP, while economic development encompasses more aspects. (D)</p> Signup and view all the answers

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

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

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

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

What is a key characteristic of the North/South Divide?

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

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

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

Which approach to economic growth focuses on increasing productivity through improvements in the labor force and technology?

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

What is a key aspect of the South African policy, New Growth Path (NGP)?

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

What is the primary evaluation criterion for South African economic policies?

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

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

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

Why do individual businesses in perfectly competitive markets focus on output levels?

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

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

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

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

<p>An industry comprises multiple businesses (D)</p> Signup and view all the answers

What is the purpose of cost concepts in decision-making for businesses in a perfect market?

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

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

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

What is a characteristic of a perfectly competitive market?

<p>Many buyers and sellers (A)</p> Signup and view all the answers

What is the key to achieving profit maximization in a firm?

<p>Rational decision-making (A)</p> Signup and view all the answers

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

<p>Economic growth focuses on increasing real GDP, while economic development encompasses broader aspects of well-being. (B)</p> Signup and view all the answers

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

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

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

<p>Demand-side focuses on government spending and redistribution of income, while supply-side focuses on improving productivity. (D)</p> Signup and view all the answers

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

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

What is a key characteristic of the North/South divide?

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

What is an example of a supply-side approach to economic growth?

<p>Investing in education and training to enhance productivity. (B)</p> Signup and view all the answers

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

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

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

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

What is the purpose of protectionism?

<p>To protect local industries and jobs from foreign competition (B)</p> Signup and view all the answers

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

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

What is a benefit of free trade?

<p>Access to a wider variety of goods and services (C)</p> Signup and view all the answers

What is an argument in favor of protectionism?

<p>Preservation of jobs against foreign competition (A)</p> Signup and view all the answers

What is a major trade protocol that South Africa is involved in?

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

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

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

What is a characteristic of monopolies?

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

What is the main difference between economic growth and development?

<p>Growth focuses on increasing GDP, while development focuses on improving living standards (B)</p> Signup and view all the answers

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

<p>Economic disparities between developed and developing countries (A)</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 a potential outcome of monopolies and oligopolies?

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

What is a goal of government intervention in markets with failures?

<p>To correct market failures and improve social welfare (B)</p> Signup and view all the answers

What is a characteristic of monopolistic competition?

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

What is a type of market failure that can lead to environmental degradation?

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

What is a consequence of strategic behaviors in oligopolies?

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

What is a potential drawback of monopolistic competition?

<p>Redundant expenditures on advertising (A)</p> Signup and view all the answers

What is a goal of government regulations in imperfect markets?

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

What is a characteristic of imperfect markets?

<p>Presence of market failures (C)</p> Signup and view all the answers

What can lead to underutilization of resources in imperfect markets?

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

What is a potential outcome of monopolies and oligopolies?

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

What is the primary condition necessary for a firm to achieve profit maximization in a perfect market?

<p>Marginal cost equals marginal revenue (A)</p> Signup and view all the answers

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

<p>Firms face different conditions for their average and marginal revenue and cost curves (C)</p> Signup and view all the answers

What is the purpose of governments' efforts to emulate the conditions of perfect competition?

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

What is the difference between a monopoly and an oligopoly?

<p>A monopoly has a single company, while an oligopoly has multiple firms (B)</p> Signup and view all the answers

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

<p>It has a kinked shape (C)</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 they tend to normalize in the long run (A)</p> Signup and view all the answers

What is the primary goal of governments' competition policies in imperfect markets?

<p>To promote transparency and ensure a level playing field (B)</p> Signup and view all the answers

What is the key characteristic of a perfect market?

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

What is the implication of imperfect competition in a market?

<p>Market inefficiencies may occur (A)</p> Signup and view all the answers

What is the primary goal of firms in imperfect markets?

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

What is the main objective of government intervention in markets with failures?

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

What is a characteristic of public goods?

<p>They are non-excludable and non-rivalrous (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 a consequence of asymmetric information in a market?

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

What is a type of market failure that can lead to environmental degradation?

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

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

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

What is a goal of government regulations in imperfect markets?

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

What is an implication of market failures?

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

What is a characteristic of merit goods?

<p>They are underprovided in private markets (B)</p> Signup and view all the answers

What is a cause of market failures?

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

What is the essential condition for a firm to maximize profits in perfect competition?

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

What is the primary outcome of the long-term dynamics of firms in perfect markets?

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

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

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

What is the primary reason why firms in monopolistic competition can earn short-term economic profits?

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

What is the shape of the demand curve for a firm in a monopolistically competitive market?

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

Why do firms in oligopolies engage in non-price competition?

<p>To maintain market share (B)</p> Signup and view all the answers

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

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

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

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

What is the primary characteristic of imperfect markets that leads to market inefficiencies?

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

What is the primary role of barriers to entry in maintaining a monopoly's exclusive control?

<p>To prevent new entrants (B)</p> Signup and view all the answers

In a perfectly competitive market, which of the following is true about the products sold by different sellers?

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

What is the primary goal of an individual business in a perfect market?

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

In a perfect market, what is the role of perfect information?

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

What is the significance of total revenue, average revenue, and marginal revenue in a perfect market?

<p>They are used by businesses to make decisions concerning output and pricing strategies. (A)</p> Signup and view all the answers

What is the relationship 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 is the key to achieving profit maximization in a firm in a perfect market?

<p>Maximizing revenue. (C)</p> Signup and view all the answers

What is the significance of cost concepts, such as total cost, average cost, and marginal cost, in a perfect market?

<p>They are used by businesses to make decisions concerning output and pricing strategies. (C)</p> Signup and view all the answers

What is the primary characteristic of a perfect market?

<p>Many buyers and sellers, ensuring maximum efficiency and equitable resource distribution. (C)</p> Signup and view all the answers

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

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

What is a result of imperfect competition in a market?

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

What is a consequence of asymmetric information in a market?

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

What is an example of a merit good?

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

What is a type of market failure that can lead to environmental degradation?

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

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

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

What is a consequence of market failures?

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

What is a goal of government intervention in markets with failures?

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

In a monopoly, what is the primary reason for the firm's market power?

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

What is a characteristic of oligopolies?

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

What is a result of monopolistic competition?

<p>A variety of products and innovations due to competitive pressure (D)</p> Signup and view all the answers

Why do governments often intervene in imperfect markets?

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

What is a potential outcome of monopolies and oligopolies?

<p>Lower output and higher prices compared to perfect competition (B)</p> Signup and view all the answers

What is a characteristic of imperfect markets?

<p>They often result in allocative and productive inefficiencies (A)</p> Signup and view all the answers

What is the result of strategic behaviors in oligopolies?

<p>Prices are stabilized above competitive levels (C)</p> Signup and view all the answers

What is the goal of firms in monopolistic competition?

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

What is a consequence of imperfect competition in a market?

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

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

<p>The existence of barriers to entry and market power (C)</p> Signup and view all the answers

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

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

What is the main argument in favor of protectionism?

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

What is a benefit of free trade according to the theory of comparative advantage?

<p>Increased specialization and economic efficiency (D)</p> Signup and view all the answers

What is the purpose of export promotion policies in South Africa?

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

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

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

What is the primary difference between economic growth and development?

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

What is a characteristic of public goods?

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

What is a consequence of asymmetric information in a market?

<p>Market failure and potential for exploitation (B)</p> Signup and view all the answers

What is a goal of government intervention in markets with failures?

<p>To correct market failures and ensure social welfare (D)</p> Signup and view all the answers

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

<p>Social unrest and political instability (D)</p> Signup and view all the answers

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

<p>Economic growth is a narrower concept, while economic development is a broader concept that includes improvements in standards of living. (C)</p> Signup and view all the answers

Which of the following approaches to economic growth is focused on improving the quality of the labor force?

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

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

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

What is the North/South Divide characterized by?

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

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

<p>To focus on job creation and identify job drivers (C)</p> Signup and view all the answers

What is a result of the Human Divide between the North and South?

<p>A difference in access to education and healthcare (A)</p> Signup and view all the answers

What is a characteristic of South African policies?

<p>They incorporate both demand-side and supply-side approaches (D)</p> Signup and view all the answers

What is an example of a demand-side approach to economic growth?

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

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

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

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

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

What is an important concept in decision-making for businesses in perfectly competitive markets?

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

What is a key feature of an industry in a perfectly competitive market?

<p>Multiple businesses producing identical products. (B)</p> Signup and view all the answers

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

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

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

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

What is a characteristic of perfectly competitive markets?

<p>There is complete mobility of factors of production. (D)</p> Signup and view all the answers

What is the primary role of cost concepts in decision-making for businesses in perfectly competitive markets?

<p>To make decisions concerning output and pricing strategies. (D)</p> Signup and view all the answers

What is a characteristic of monopolies?

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

What is the key feature of an oligopoly?

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

What is the consequence of strategic behaviors in oligopolies?

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

What is a potential outcome of monopolies and oligopolies?

<p>Higher prices and lower output (D)</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 a characteristic of monopolistic competition?

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

What is a consequence of monopolistic competition?

<p>Redundant expenditures on advertising and marketing (D)</p> Signup and view all the answers

What is the key difference between imperfect markets and perfect competition?

<p>Imperfect markets are more realistic, while perfect competition is an idealized model (A)</p> Signup and view all the answers

What is the purpose of government intervention in imperfect markets?

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

What is the result of imperfect competition in a market?

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

What is the characteristic of a firm in a perfectly competitive market that allows it to make normal profits but no economic profits?

<p>Entry and exit of firms based on profitability (B)</p> Signup and view all the answers

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

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

What is the result of a firm's marginal revenue exceeding its marginal cost?

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

What is the purpose of competition policies in perfect markets?

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

What is the characteristic of a monopolistically competitive market that leads to non-price competition?

<p>The differentiation of products among firms (A)</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 goal of governments in promoting perfect competition?

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

What is the characteristic of an oligopoly that leads to a kinked demand curve?

<p>The dual pricing strategy of firms (A)</p> Signup and view all the answers

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

<p>Firms make economic profits in the long run (C)</p> Signup and view all the answers

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

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

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

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

What is a consequence of asymmetric information in a market?

<p>Choice that do not maximize welfare (C)</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 characteristic of public goods?

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

What is a result of imperfect competition in a market?

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

What is a type of market failure that can lead to environmental degradation?

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

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

<p>Skewed production of goods and services (A)</p> Signup and view all the answers

What is an example of a merit good?

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

What is a characteristic of monopolies?

<p>Single firm dominating the market (C)</p> Signup and view all the answers

What is a goal of government regulation in imperfect markets?

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

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

<p>Economic growth focuses on the increase in real GDP, while economic development encompasses broader aspects of well-being. (B)</p> Signup and view all the answers

Which of the following approaches to economic growth emphasizes the improvement of the quality of the labor force?

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

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

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

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

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

Which of the following is a key feature of the New Growth Path (NGP) in South Africa?

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

What is the main argument for protectionism in the context of national security?

<p>To ensure the self-sufficiency of crucial industries (B)</p> Signup and view all the answers

What is the benefit of free trade in terms of consumer choice?

<p>Consumers have access to a wider variety of goods and services, often at lower prices (A)</p> Signup and view all the answers

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

<p>To create new business opportunities and integrate production factors (A)</p> Signup and view all the answers

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

<p>To encourage local firms to export their goods and increase participation in the global market (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 enhancing productivity (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>To target halving unemployment and poverty by improving average economic growth (D)</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 major challenge posed by the North/South divide?

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

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

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

What is a characteristic of free trade?

<p>It promotes the unrestricted exchange of goods and services across international borders (C)</p> Signup and view all the answers

What is the primary goal of SACU (Southern African Customs Union)?

<p>To facilitate trade and economic development among member countries (A)</p> Signup and view all the answers

What is a characteristic of protectionism in the context of infant industry argument?

<p>It involves protecting 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 purpose of cost concepts in a firm?

<p>To make decisions on output and pricing strategies (B)</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 influence market prices (D)</p> Signup and view all the answers

What is the distinguishing feature of an individual business in a perfect market?

<p>It is a price taker, with no influence over market prices (B)</p> Signup and view all the answers

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

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

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

<p>They are homogeneous (A)</p> Signup and view all the answers

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

<p>It ensures that no single entity can influence market prices (A)</p> Signup and view all the answers

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

<p>An individual business is a part of an industry (B)</p> Signup and view all the answers

What is the outcome when marginal revenue equals marginal cost in a firm?

<p>The firm will maximize profits (A)</p> Signup and view all the answers

What is the primary reason for firms in perfectly competitive markets to adjust their output in response to profits and losses?

<p>To allocate resources most efficiently (B)</p> Signup and view all the answers

What is the key characteristic of monopolistic competition that leads to non-price competition?

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

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

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

What is the 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 goal of governments in implementing competition policies?

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

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

<p>Firms maximize profits where marginal revenue equals marginal cost (B)</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 reason for the existence of barriers to entry in monopolies?

<p>To prevent new firms from entering the market (C)</p> Signup and view all the answers

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

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

What is the implication of imperfect markets on resource allocation?

<p>Resources are allocated to benefit a few firms (A)</p> Signup and view all the answers

What is a characteristic of public goods?

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

What is the primary goal of firms in oligopolies?

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

What is the consequence of asymmetric information in a market?

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

What is the goal of government intervention in markets with failures?

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

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

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

What is a characteristic of imperfect markets that differentiates them from perfect competition?

<p>Barriers to entry exist, allowing firms to exert market power. (D)</p> Signup and view all the answers

What is a result of imperfect competition in a market?

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

What is the outcome of imperfect competition in a market?

<p>Resources are allocated inefficiently (C)</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 a consequence of strategic behaviors in oligopolies?

<p>Collusive practices and price fixing. (D)</p> Signup and view all the answers

What is a characteristic of monopolistic competition?

<p>Firms sell differentiated products that are close substitutes. (A)</p> Signup and view all the answers

What is the consequence of market failures?

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

What is a type of market failure that can lead to environmental degradation?

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

What is a potential outcome of monopolies and oligopolies?

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

What is a characteristic of monopolies?

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

What is a potential drawback of monopolistic competition?

<p>Firms may engage in excessive advertising and marketing. (A)</p> Signup and view all the answers

Why do monopolies generate sustained profits in the long term?

<p>Because barriers to entry prevent new firms from entering the market. (B)</p> Signup and view all the answers

What is a characteristic of oligopolies?

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

What is a result of imperfect competition in a market?

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

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

<p>To evaluate the social costs and benefits of a project or regulation (B)</p> Signup and view all the answers

What is the primary objective of protectionism?

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

What is one of the benefits of free trade?

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

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

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

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

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

What is one of the challenges posed by the North/South divide?

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

What is a common consequence of market failures?

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

What is an example of a negative externality?

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

What is a characteristic of public goods?

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

What is a goal of government intervention in markets with failures?

<p>To correct market failures and promote social welfare (D)</p> Signup and view all the answers

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

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

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

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

Which of the following approaches to economic growth emphasizes the importance of education and training in improving productivity?

<p>Supply-side approach (D)</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 (C)</p> Signup and view all the answers

What is the primary focus of the North/South divide in terms of economic development?

<p>Disparity in income levels and economic stability between developed and developing countries (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>Promoting market-led growth and enhancing investor confidence (B)</p> Signup and view all the answers

Which of the following approaches to economic growth involves encouraging the production of goods domestically that would otherwise be imported?

<p>Import substitution approach (D)</p> Signup and view all the answers

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

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

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