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

    What is a characteristic of a perfectly competitive market?

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

    What characterizes a perfect market?

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

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

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

    What is a characteristic of an oligopoly?

    <p>Firms engage in non-price competition</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 a characteristic of monopolistic competition?

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

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

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

    What is a barrier to entry in a monopoly?

    <p>All of the above</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 imperfect markets?

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

    What is an implication of oligopolies?

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

    What is a characteristic of monopolistic competition?

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

    Why do monopolies generate sustained profits in the long term?

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

    What is a consequence of strategic behaviors in oligopolies?

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

    What is a potential drawback of monopolistic competition?

    <p>There are redundant expenditures on advertising and marketing.</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 definition of protectionism?

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

    What is the definition of free trade?

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

    What is one of the arguments against free trade?

    <p>Preservation of jobs</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</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)</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</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 a common consequence of market failures?

    <p>Allocative inefficiency</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 characteristic of public goods?

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

    What is a result of imperfect competition in a market?

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

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

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

    <p>Firms cannot easily charge users</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</p> Signup and view all the answers

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

    <p>Negative externality</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.</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.</p> Signup and view all the answers

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

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

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

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

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

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

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

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

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

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

    What is a characteristic of a perfectly competitive market?

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

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

    <p>Rational decision-making</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.</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.</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.</p> Signup and view all the answers

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

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

    What is 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'.</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.</p> Signup and view all the answers

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

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

    What is the purpose of protectionism?

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

    What is a benefit of free trade?

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

    What is an argument in favor of protectionism?

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

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

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

    What is a characteristic of monopolies?

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

    What is a key feature of oligopolies?

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

    What is a potential outcome of monopolies and oligopolies?

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

    What is a characteristic of monopolistic competition?

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

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

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

    What is a consequence of strategic behaviors in oligopolies?

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

    What is a potential drawback of monopolistic competition?

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

    What is a goal of government regulations in imperfect markets?

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

    What is a characteristic of imperfect markets?

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

    What can lead to underutilization of resources in imperfect markets?

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

    What is a potential outcome of monopolies and oligopolies?

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

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

    <p>It has a kinked shape</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</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</p> Signup and view all the answers

    What is the key characteristic of a perfect market?

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

    What is the implication of imperfect competition in a market?

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

    What is the primary goal of firms in imperfect markets?

    <p>To maximize economic profits</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</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 asymmetric information in a market?

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

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

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

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

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

    What is an implication of market failures?

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

    What is a characteristic of merit goods?

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

    What is a cause of market failures?

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

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

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

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

    <p>To maintain market share</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</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</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</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</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.</p> Signup and view all the answers

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

    <p>To maximize profit.</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.</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.</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.</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.</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.</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.</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</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 result of imperfect competition in a market?

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

    What is a consequence of asymmetric information in a market?

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

    What is an example of a merit good?

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

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

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

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

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

    What is a consequence of market failures?

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

    What is a characteristic of oligopolies?

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

    Why do governments often intervene in imperfect markets?

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

    What is a characteristic of imperfect markets?

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

    What is the result of strategic behaviors in oligopolies?

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

    What is the goal of firms in monopolistic competition?

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

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

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

    What is the main argument in favor of protectionism?

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

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

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

    What is a characteristic of public goods?

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

    What is a consequence of asymmetric information in a market?

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

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

    <p>Social unrest and political instability</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.</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</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</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</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</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</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</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</p> Signup and view all the answers

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

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

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

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

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

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

    What is a characteristic of perfectly competitive markets?

    <p>There is complete mobility of factors of production.</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.</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 key feature of an oligopoly?

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

    What is the consequence of strategic behaviors in oligopolies?

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

    What is a potential outcome of monopolies and oligopolies?

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

    What is a characteristic of monopolistic competition?

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

    What is a consequence of monopolistic competition?

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

    What is the result of imperfect competition in a market?

    <p>Higher prices and lower output</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</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</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</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</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</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 goal of governments in promoting perfect competition?

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

    What is a consequence of asymmetric information in a market?

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

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

    What is a result of imperfect competition in a market?

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

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

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

    What is an example of a merit good?

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

    What is a characteristic of monopolies?

    <p>Single firm dominating the market</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</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.</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</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</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</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

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

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

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

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

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

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

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

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

    <p>Product differentiation</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 the reason for government intervention in markets with monopolies and oligopolies?

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

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

    <p>To enhance economic efficiency</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</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 primary reason for the existence of barriers to entry in monopolies?

    <p>To prevent new firms from entering the market</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</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</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 the primary goal of firms in oligopolies?

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

    What is the consequence of asymmetric information in a market?

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

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

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

    What is a result of imperfect competition in a market?

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

    What is the outcome of imperfect competition in a market?

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

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

    What is a characteristic of monopolistic competition?

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

    What is the consequence of market failures?

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

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

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

    What is a potential outcome of monopolies and oligopolies?

    <p>Higher prices and lower output.</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 potential drawback of monopolistic competition?

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

    What is a result of imperfect competition in a market?

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

    What is the primary objective of protectionism?

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

    What is one of the benefits of free trade?

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

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

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

    What is a common consequence of market failures?

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

    What is an example of a negative externality?

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

    What is a characteristic of public goods?

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

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

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

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

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

    What is the 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</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</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</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</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</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</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</p> Signup and view all the answers

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