June P2 Hard

What is the condition for a firm to be in a profit-maximizing state?

MR = MC

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

To enhance economic efficiency and prevent monopolies

What is a characteristic of a monopolistic competition?

Firms engage in non-price competition

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

Kinked Signup and view all the answers

What is the primary reason for a monopoly's ability to earn long-term economic profits?

Barriers to entry Signup and view all the answers

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

The firm should increase production Signup and view all the answers

What is the primary goal of firms in an oligopoly?

To maximize collective profits Signup and view all the answers

What is the condition for a firm to experience losses?

MR < MC Signup and view all the answers

What is the primary characteristic of a perfect market?

There are no barriers to entry and exit Signup and view all the answers

What is the result of the long-term dynamics of perfect competition?

Firms make normal profits but no economic profits Signup and view all the answers

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

To maximize profit Signup and view all the answers

What characterizes the products in a perfectly competitive market?

Homogeneity Signup and view all the answers

What is a characteristic of a perfectly competitive market?

Freedom of entry and exit Signup and view all the answers

What do businesses in perfectly competitive markets focus on?

Various revenue metrics and cost concepts Signup and view all the answers

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

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

What do individual businesses in perfectly competitive markets have no influence over?

Market price Signup and view all the answers

What is a key aspect of perfectly competitive markets?

Perfect information Signup and view all the answers

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

To optimize output to maximize profit Signup and view all the answers

Which approach to economic growth emphasizes improvements in standards of living, income equity, and general well-being of the population?

Economic development approach Signup and view all the answers

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

To meet basic needs and develop human resources Signup and view all the answers

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

Disparity in income levels and access to resources Signup and view all the answers

Which of the following is NOT a characteristic of the supply-side approach to economic growth?

Increasing government expenditure Signup and view all the answers

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

To halve unemployment and poverty Signup and view all the answers

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

Job creation and infrastructure development Signup and view all the answers

Which approach to economic growth emphasizes policies aimed at redistributing income to enhance consumption among lower-income earners?

Demand-side approach Signup and view all the answers

What is the main characteristic of the Growth, Employment and Redistribution (GEAR) strategy in South Africa?

Emphasis on market-led growth and fiscal discipline Signup and view all the answers

In an imperfect market, which type of inefficiency occurs when firms produce less at higher costs, leading to underutilization of resources and welfare losses to society?

Productive inefficiency Signup and view all the answers

What is a key characteristic of a monopoly?

A single firm dominating the entire market Signup and view all the answers

What is the primary goal of governments intervening in imperfect markets through regulations and antitrust laws?

To enhance competitive outcomes and protect consumer interests Signup and view all the answers

In an oligopoly, what type of competition is often used by firms to differentiate their products?

Non-price competition Signup and view all the answers

What is a characteristic of monopolistic competition?

Many firms selling differentiated products Signup and view all the answers

What is a consequence of imperfect markets?

Lower output and higher prices Signup and view all the answers

What is a difference between monopolies and oligopolies?

Number of firms in the market Signup and view all the answers

What is a consequence of monopolistic competition?

A variety of products and innovations Signup and view all the answers

What is a characteristic of imperfect markets?

Barriers to entry Signup and view all the answers

What is a goal of understanding imperfect markets?

To gain insights into the strategic behaviors of firms and the consequences of market power on economic welfare Signup and view all the answers

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

To evaluate the social costs and benefits of government interventions Signup and view all the answers

What is the main argument in favor of protectionism in terms of national security?

To ensure the self-sufficiency of crucial industries vital for national security Signup and view all the answers

What is an advantage of free trade, according to the theory of comparative advantage?

Specialization in the production of goods Signup and view all the answers

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

To increase participation in the global market Signup and view all the answers

What is the main difference between economic growth and development?

Economic growth focuses on GDP, while economic development focuses on income redistribution Signup and view all the answers

What is a common tool used to implement protectionism?

All of the above Signup and view all the answers

What is the infant industry argument in favor of protectionism?

Protecting emerging domestic industries from foreign competition Signup and view all the answers

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

Increased economic efficiency Signup and view all the answers

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

To encourage local production of goods Signup and view all the answers

What is a challenge posed by the North/South divide in terms of economic development?

Income inequality Signup and view all the answers

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

To increase market competition and reduce inefficiencies Signup and view all the answers

What is an example of a positive externality?

Education Signup and view all the answers

What is the term for goods that are non-excludable and non-rivalrous?

Public goods Signup and view all the answers

What is a consequence of imperfect competition in markets?

Higher prices and reduced output Signup and view all the answers

What is a reason for government provision of public goods?

Because they are non-excludable and non-rivalrous Signup and view all the answers

What is an example of an asymmetric information problem?

Used cars Signup and view all the answers

What is a consequence of immobility of factors of production?

Inefficiencies in the production of goods and services Signup and view all the answers

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

Allocative inefficiency Signup and view all the answers

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

To correct market failures and promote economic efficiency Signup and view all the answers

What is a consequence of market failures on the environment?

Environmental degradation Signup and view all the answers

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

To maximize profits Signup and view all the answers

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

Homogeneous Signup and view all the answers

What is a key aspect of perfectly competitive markets?

Freedom of entry and exit Signup and view all the answers

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

To maximize profits Signup and view all the answers

What distinguishes an industry from an individual business in a perfectly competitive market?

Multiple businesses producing identical products Signup and view all the answers

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

They are price takers Signup and view all the answers

What is a revenue concept that businesses in a perfectly competitive market focus on?

Marginal revenue Signup and view all the answers

What is a cost concept that businesses in a perfectly competitive market focus on?

Marginal cost Signup and view all the answers

What is the primary reason for the inefficiencies in imperfect markets?

Firms producing at levels higher than marginal cost Signup and view all the answers

What is the main difference between oligopolies and monopolies?

The number of firms in the market Signup and view all the answers

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

To regulate monopolies and oligopolies Signup and view all the answers

What is the primary characteristic of monopolistic competition?

Many firms selling differentiated products Signup and view all the answers

What is the primary consequence of imperfect markets?

Higher prices and lower output Signup and view all the answers

What is the primary goal of studying imperfect markets?

To understand the dynamics of real-world markets Signup and view all the answers

What is the primary characteristic of a monopoly?

A single firm dominating the market Signup and view all the answers

What is the primary difference between monopolistic competition and oligopoly?

The presence of barriers to entry Signup and view all the answers

What is the primary consequence of oligopolistic competition?

Collusive practices and price fixing Signup and view all the answers

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

To regulate monopolies and oligopolies Signup and view all the answers

Which of the following market failures is characterized by the underprovision of public goods?

Public Goods Signup and view all the answers

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

To reduce economic inefficiencies Signup and view all the answers

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

Pollution Signup and view all the answers

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

Skewed production towards high-end goods Signup and view all the answers

Which of the following is a consequence of market failures?

Net social welfare loss Signup and view all the answers

What is the primary goal of state intervention in market failures?

To correct market failures Signup and view all the answers

Which of the following is an example of a merit good?

Healthcare Signup and view all the answers

What is the primary consequence of asymmetric information in markets?

Choices that do not maximize welfare Signup and view all the answers

Which of the following is an example of a public good?

National defense Signup and view all the answers

What is the primary consequence of imperfect competition in markets?

Higher prices and reduced output Signup and view all the answers

What is the primary distinguishing feature of perfect competition that leads to efficient allocation of resources?

Free entry and exit of firms, leading to normal profits Signup and view all the answers

In an oligopoly, what is the primary motivation behind collusion among firms?

To maximize collective profits by limiting production Signup and view all the answers

What is the primary consequence of monopolistic competition in the long run?

Firms normalize profits due to ease of entry Signup and view all the answers

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

To emulate the conditions of perfect competition Signup and view all the answers

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

It is downward-sloping Signup and view all the answers

What is the primary implication of imperfect markets on resource allocation?

Resources are allocated inefficiently Signup and view all the answers

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

The number of firms in the market Signup and view all the answers

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

To evaluate the social costs and benefits of interventions aimed at correcting market failures Signup and view all the answers

What is the main difference between economic growth and development?

Economic growth focuses on increasing GDP, while economic development focuses on improving standards of living Signup and view all the answers

What is the primary consequence of long-term dynamics in perfect competition?

Firms make normal profits, and resources are allocated efficiently Signup and view all the answers

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

Improving the quality of the labor force through education and training Signup and view all the answers

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

The presence of barriers to entry Signup and view all the answers

What is the primary goal of protectionism?

To protect local businesses and jobs from foreign competition Signup and view all the answers

What is the primary goal of understanding imperfect markets?

To identify market inefficiencies and design policies to address them Signup and view all the answers

What is the infant industry argument in favor of protectionism?

Protecting emerging domestic industries that are not yet competitive enough to withstand international competition Signup and view all the answers

What is the main difference between the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution (GEAR) strategy in South Africa?

The RDP focuses on meeting basic needs, while GEAR focuses on market-led growth Signup and view all the answers

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

To reduce poverty and inequality by half Signup and view all the answers

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

To encourage local firms to export their goods and participate in the global market Signup and view all the answers

What is the primary advantage of free trade, according to the theory of comparative advantage?

It allows nations to focus on the production of goods for which they have a comparative advantage Signup and view all the answers

What is the primary characteristic of the Human Development Index (HDI)?

It measures the standard of living, including health, education, and income Signup and view all the answers

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

To encourage local production of goods that were previously imported Signup and view all the answers

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

To focus on job creation and identifying job drivers Signup and view all the answers

What is the primary challenge posed by the North/South divide in terms of economic development?

The disparity in access to resources and economic stability between the North and South Signup and view all the answers

What is the primary challenge posed by the North/South divide in terms of economic development?

The difference in standards of living between developed and developing countries Signup and view all the answers

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

To prevent the abuse of market power and promote competition Signup and view all the answers

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

To increase government expenditure to stimulate economic activity Signup and view all the answers

What is the primary characteristic of the economic development approach?

It focuses on improving standards of living, income equity, and general well-being of the population Signup and view all the answers

What is the primary goal of understanding imperfect markets?

To design interventions that correct market failures and enhance social welfare Signup and view all the answers

Which of the following approaches to economic growth focuses on increasing government expenditure to stimulate economic activity?

Demand-side approach Signup and view all the answers

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

Market-led growth Signup and view all the answers

What is a primary consequence of monopolies and oligopolies in imperfect markets?

Allocative and productive inefficiencies, leading to welfare losses to society Signup and view all the answers

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

Difference in income levels Signup and view all the answers

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

Investing in capital goods Signup and view all the answers

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

Firms having some control over their prices Signup and view all the answers

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

To enhance competitive outcomes and protect consumer interests Signup and view all the answers

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

Halving unemployment and poverty Signup and view all the answers

What is a key feature of oligopolies in imperfect markets?

Interdependence of firms in the industry Signup and view all the answers

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

Job creation and identifying job drivers Signup and view all the answers

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

Meeting basic needs Signup and view all the answers

What is the primary consequence of monopolistic competition in imperfect markets?

Increased innovation and product differentiation Signup and view all the answers

Which of the following approaches to economic growth emphasizes improvements in standards of living, income equity, and general well-being of the population?

Economic development Signup and view all the answers

What is a characteristic of imperfect markets that leads to inefficiencies?

Prices above marginal costs, leading to allocative inefficiency Signup and view all the answers

What is a key difference between monopolies and oligopolies in imperfect markets?

Number of firms in the market Signup and view all the answers

What is the primary goal of understanding imperfect markets in economics?

To understand the dynamics of real-world markets Signup and view all the answers

What is a key consequence of market power in imperfect markets?

Higher prices and lower output compared to perfect competition Signup and view all the answers

What is a key characteristic of monopolistic competition in imperfect markets?

Firms producing differentiated products that are close substitutes Signup and view all the answers

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

To promote economic efficiency and social welfare Signup and view all the answers

What is an example of a negative externality?

Pollution Signup and view all the answers

Which of the following is a characteristic of public goods?

Non-excludable and non-rivalrous Signup and view all the answers

What is the consequence of imperfect competition in markets?

Allocative inefficiency and potential consumer harm Signup and view all the answers

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

To correct market failures and increase social welfare Signup and view all the answers

What is an example of a merit good?

Healthcare Signup and view all the answers

What is the consequence of asymmetric information in markets?

Choices that do not maximize welfare Signup and view all the answers

What is the primary goal of antitrust laws in markets with monopolies and oligopolies?

To promote economic efficiency and social welfare Signup and view all the answers

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

Prevents market economies from being efficient Signup and view all the answers

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

To internalize external costs and benefits Signup and view all the answers

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

To maximize profit Signup and view all the answers

In a perfectly competitive market, what is true about the product?

It is homogeneous Signup and view all the answers

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

The number of firms in the market Signup and view all the answers

In a perfectly competitive market, what is the primary reason for firms making normal profits?

The ease of entry and exit of firms Signup and view all the answers

What is a key characteristic of a perfectly competitive market?

There are many buyers and sellers Signup and view all the answers

What do firms in a perfectly competitive market focus on?

Revenue and cost concepts Signup and view all the answers

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

To prevent monopolies and promote fair competition Signup and view all the answers

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

An industry has many businesses, and a business is part of an industry Signup and view all the answers

In a monopolistically competitive market, what is the primary characteristic of the products?

They are differentiated but serve a similar purpose Signup and view all the answers

What is the primary consequence of imperfect markets?

Market inefficiencies and welfare losses Signup and view all the answers

What is true about individual businesses in perfectly competitive markets?

They are price takers Signup and view all the answers

What is a key aspect of perfectly competitive markets?

Freedom of entry and exit Signup and view all the answers

In an oligopoly, what is the primary characteristic of the demand curve?

It has a kinked shape Signup and view all the answers

What do businesses in perfectly competitive markets have no influence over?

Market prices Signup and view all the answers

What is the primary reason for the ease of entry in a perfectly competitive market?

The lack of barriers to entry Signup and view all the answers

What is the primary goal of firms in an oligopoly?

To maximize profits Signup and view all the answers

What is the primary difference between a monopoly and perfect competition?

The degree of barriers to entry Signup and view all the answers

What is the primary characteristic of monopolistic competition?

Firms producing differentiated products Signup and view all the answers

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

To ensure that the benefits of a project or regulation exceed its costs Signup and view all the answers

Which of the following is a benefit of free trade, according to the theory of comparative advantage?

Increased economic growth through specialization Signup and view all the answers

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

To encourage local production of goods that were previously imported Signup and view all the answers

What is the main difference between economic growth and development?

Economic growth focuses on increasing GDP, while development focuses on improving living standards Signup and view all the answers

What is the primary objective of protectionism in terms of national security?

To ensure the self-sufficiency of crucial industries that are vital for national security Signup and view all the answers

What is the infant industry argument in favor of protectionism?

Protecting emerging domestic industries that are not yet competitive enough to withstand international competition Signup and view all the answers

What is the primary goal of governments intervening in imperfect markets through regulations and antitrust laws?

To correct market failures and ensure efficient resource allocation Signup and view all the answers

What is the primary challenge posed by the North/South divide in terms of economic development?

Income inequality between rich and poor countries Signup and view all the answers

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

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

What is the primary characteristic of a perfectly competitive market?

There are many buyers and sellers, and no single firm has the power to influence the market price Signup and view all the answers

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

To maximize profits by adjusting their output levels Signup and view all the answers

What is a characteristic of the products sold by different businesses in a perfectly competitive market?

They are homogeneous, with no differentiation Signup and view all the answers

What is the primary goal of firms in imperfect markets?

Maximize profits Signup and view all the answers

In a monopolistically competitive market, what prevents firms from earning long-term economic profits?

Ease of market entry Signup and view all the answers

What is a key aspect of perfectly competitive markets that ensures maximum efficiency and equitable resource distribution?

The perfect information and freedom of entry and exit Signup and view all the answers

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

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

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

It is downward-sloping Signup and view all the answers

What is the primary focus of businesses in perfectly competitive markets?

Minimizing their costs and maximizing their revenues Signup and view all the answers

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

To enhance economic efficiency Signup and view all the answers

What is the primary goal of individual businesses in a perfect market, in terms of pricing strategy?

To set a price that equals their marginal cost Signup and view all the answers

What is a consequence of imperfect markets in terms of resource allocation?

Resources are underutilized Signup and view all the answers

What is the primary goal of firms in oligopolies?

To maximize profits Signup and view all the answers

What is a characteristic of individual businesses in perfectly competitive markets, in terms of their influence over the market price?

They have no influence over the market price Signup and view all the answers

What is a characteristic of perfect competition in the long run?

Firms make normal profits Signup and view all the answers

What is the primary objective of a firm in a perfect market, in terms of its output levels?

To produce at the level that maximizes its profits Signup and view all the answers

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

To enhance economic efficiency Signup and view all the answers

What is a characteristic of imperfect markets in terms of market structure?

A few firms dominate the market Signup and view all the answers

What is the primary goal of firms in perfect competition?

To make normal profits Signup and view all the answers

What is the primary difference between monopolies and oligopolies in terms of the number of firms?

Monopolies have one firm, while oligopolies have multiple firms. Signup and view all the answers

What is the primary consequence of allocative inefficiency in imperfect markets?

Higher prices and lower output. Signup and view all the answers

What is the primary reason for firms in monopolistic competition to engage in non-price competition?

To differentiate their products and attract customers. Signup and view all the answers

What is the primary goal of government intervention in imperfect markets through regulations and antitrust laws?

To enhance consumer welfare. Signup and view all the answers

What is the primary characteristic of markets with imperfect competition?

Firms having some degree of market power. Signup and view all the answers

What is the primary consequence of imperfect markets in terms of resource allocation?

Inefficient allocation of resources. Signup and view all the answers

What is the primary difference between oligopolies and monopolistic competition?

Oligopolies have a few firms, while monopolistic competition has many firms. Signup and view all the answers

What is the primary reason for firms in oligopolies to engage in strategic behaviors?

To influence market prices and output. Signup and view all the answers

What is the primary consequence of monopolistic competition in terms of economic efficiency?

Economic efficiency is not achieved due to redundant expenditures. Signup and view all the answers

What is the primary goal of understanding imperfect markets?

To understand the dynamics of real-world markets and their implications for economic welfare. Signup and view all the answers

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

To increase market competition and reduce inefficiencies Signup and view all the answers

What is an example of a negative externality?

Pollution Signup and view all the answers

What is the term for goods that are non-excludable and non-rivalrous?

Public goods Signup and view all the answers

What is a consequence of imperfect competition in markets?

Allocative inefficiency and potential consumer harm Signup and view all the answers

What is the primary reason for government intervention in markets with externalities?

To correct market failures and improve social welfare Signup and view all the answers

What is a characteristic of merit goods?

They are always underprovided in private markets Signup and view all the answers

What is a consequence of asymmetric information in markets?

Choices that do not maximize welfare Signup and view all the answers

What is a characteristic of imperfect markets?

They present challenges to economic efficiency and equitable outcomes Signup and view all the answers

What is a consequence of market failures?

Inefficiencies and potential consumer harm Signup and view all the answers

What is the primary goal of regulation in imperfect markets?

To increase market transparency and consumer information Signup and view all the answers

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

Economic growth only considers quantitative measures, while economic development considers both qualitative and quantitative measures. Signup and view all the answers

Which of the following approaches to economic growth is most closely associated with the reconstruction of a country's economy after a period of conflict or instability?

Reconstruction and Development Programme (RDP) Signup and view all the answers

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

To halve unemployment and poverty by improving average economic growth Signup and view all the answers

Which of the following is a characteristic of the Human Divide between the North and South?

All of the above Signup and view all the answers

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

To focus on job creation and identifying job drivers like infrastructure and agriculture Signup and view all the answers

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

Supply-side approach Signup and view all the answers

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

To aim at market-led growth, fiscal and monetary discipline, and enhancing investor confidence Signup and view all the answers

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

It focuses on meeting basic needs, developing human resources, building the economy, and democratizing state and society Signup and view all the answers

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

To evaluate the social costs and benefits of interventions aimed at correcting market failures Signup and view all the answers

What is the primary argument in favor of protectionism in terms of national security?

To ensure the self-sufficiency of crucial industries that are vital for national security Signup and view all the answers

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

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

What is the primary difference between economic growth and development?

Economic growth focuses on improvements in standards of living, while economic development focuses on income equity Signup and view all the answers

What is a common tool used to implement protectionism?

All of the above Signup and view all the answers

What is the infant industry argument in favor of protectionism?

Protecting emerging domestic industries that are not yet competitive enough to withstand international competition Signup and view all the answers

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

All of the above Signup and view all the answers

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

To support the development of diverse local industries and reduce dependency on imports Signup and view all the answers

What is a challenge posed by the North/South divide in terms of economic development?

Income inequality Signup and view all the answers

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

To correct market failures and ensure more efficient and equitable resource distribution Signup and view all the answers

In a perfectly competitive market, what happens to firms that make economic profits in the short run?

They attract new entrants, leading to increased competition. Signup and view all the answers

What is a key difference between a monopoly and an oligopoly?

The number of firms in the market. Signup and view all the answers

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

They are eliminated due to free entry and exit. Signup and view all the answers

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

To prevent monopolies and promote fair competition. Signup and view all the answers

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

It is downward-sloping, indicating an inverse relationship between price and quantity demanded. Signup and view all the answers

What is the primary consequence of imperfect markets?

Welfare losses occur due to underutilization of resources. Signup and view all the answers

In an oligopoly, what is the primary goal of firms' non-price competition strategies?

To differentiate their products through branding and advertising. Signup and view all the answers

What is a key difference between perfect competition and monopolistic competition?

The degree of product differentiation. Signup and view all the answers

What is the primary goal of antitrust laws and regulations?

To prevent the abuse of market power by dominant firms. Signup and view all the answers

What is a characteristic of the long-term dynamics of perfect competition?

Firms make normal profits, and resources are allocated efficiently. Signup and view all the answers

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

To evaluate the social costs and benefits of interventions Signup and view all the answers

What is the main argument in favor of protectionism in terms of national security?

To ensure the self-sufficiency of crucial industries that are vital for national security Signup and view all the answers

What is an advantage of free trade, according to the theory of comparative advantage?

Specialization and efficient allocation of resources globally Signup and view all the answers

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

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

What is the main difference between economic growth and development?

Growth focuses on income, while development focuses on living standards Signup and view all the answers

What is a common tool used to implement protectionism?

Tariffs and quotas Signup and view all the answers

In imperfect markets, what is the primary reason for the deviation from perfect competition?

Higher prices and lower output Signup and view all the answers

What is the infant industry argument in favor of protectionism?

Protecting emerging domestic industries that are not yet competitive enough to withstand international competition Signup and view all the answers

Which of the following is a characteristic of a monopolistic competition?

Firms producing differentiated products Signup and view all the answers

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

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

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

Welfare losses to society Signup and view all the answers

In an oligopoly, what is the primary strategy used by firms to differentiate their products?

Advertising and product differentiation Signup and view all the answers

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

To encourage local production of goods that were previously imported to strengthen domestic industries and reduce dependency on foreign goods Signup and view all the answers

What is the primary goal of governments intervening in imperfect markets through regulations and antitrust laws?

To control monopolistic and oligopolistic powers Signup and view all the answers

What is a challenge posed by the North/South divide in terms of economic development?

Income inequality Signup and view all the answers

What is the primary characteristic of a monopoly?

Single firm dominating the market Signup and view all the answers

In an oligopoly, what is the primary feature of the market structure?

Interdependence of firms Signup and view all the answers

What is the primary consequence of monopolistic competition on economic efficiency?

Redundant expenditures on advertising and marketing Signup and view all the answers

What is the primary goal of understanding imperfect markets?

To understand the dynamics of imperfect markets Signup and view all the answers

In imperfect markets, what is the primary consequence of the deviation from perfect competition on output?

Lower output and higher prices Signup and view all the answers

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

Increasing government expenditure to stimulate economic activity Signup and view all the answers

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

Redistributing income to enhance consumption among lower-income earners Signup and view all the answers

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

Meeting basic needs and developing human resources Signup and view all the answers

What is the main characteristic of the Human Development Index (HDI)?

It includes measures of health, education, and income Signup and view all the answers

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

Halving unemployment and poverty by improving average economic growth Signup and view all the answers

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

The North is more developed, while the South is less developed Signup and view all the answers

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

Focusing on job creation and identifying job drivers like infrastructure and agriculture Signup and view all the answers

What is the primary characteristic of the supply-side approach to economic growth in terms of entrepreneurship?

Encouraging entrepreneurship to discover new business opportunities Signup and view all the answers

What is the primary consequence of market failures due to imperfect distribution of income and wealth?

Skewed production towards high-end goods and services Signup and view all the answers

What is the primary reason for government intervention in markets with externalities?

To internalize the social costs or benefits Signup and view all the answers

What is the term for goods that are underprovided in private markets due to their non-excludable and non-rivalrous nature?

Public goods Signup and view all the answers

What is the primary consequence of imperfect information in markets?

Choices that do not maximize welfare Signup and view all the answers

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

To correct market failures and promote efficient allocation of resources Signup and view all the answers

What is the primary cause of allocative inefficiency in markets?

Imperfect competition Signup and view all the answers

What is the primary consequence of negative externalities?

Environmental degradation Signup and view all the answers

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

To prevent monopolistic pricing and promote efficient allocation of resources Signup and view all the answers

What is the primary consequence of merit goods being underprovided in private markets?

Social welfare losses Signup and view all the answers

What is the primary role of government in correcting market failures due to public goods?

To provide public goods directly Signup and view all the answers

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

Homogeneous Signup and view all the answers

Which of the following is NOT a characteristic of a perfectly competitive market?

Government regulation Signup and view all the answers

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

To maximize profits Signup and view all the answers

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

It ensures that no single entity can wield undue influence over the market Signup and view all the answers

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

An industry comprises multiple businesses producing identical products Signup and view all the answers

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

They are price takers Signup and view all the answers

What do businesses in perfectly competitive markets focus on?

Revenue and cost metrics Signup and view all the answers

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

It ensures that resources are allocated efficiently Signup and view all the answers

June P2 Hard

Questions and Answers

What is the condition for a firm to be in a profit-maximizing state?

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

What is a characteristic of a monopolistic competition?

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

What is the primary reason for a monopoly's ability to earn long-term economic profits?

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

What is the primary goal of firms in an oligopoly?

What is the condition for a firm to experience losses?

What is the primary characteristic of a perfect market?

What is the result of the long-term dynamics of perfect competition?

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

What characterizes the products in a perfectly competitive market?

What is a characteristic of a perfectly competitive market?

What do businesses in perfectly competitive markets focus on?

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

What do individual businesses in perfectly competitive markets have no influence over?

What is a key aspect of perfectly competitive markets?

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

Which approach to economic growth emphasizes improvements in standards of living, income equity, and general well-being of the population?

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

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

Which of the following is NOT a characteristic of the supply-side approach to economic growth?

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

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

Which approach to economic growth emphasizes policies aimed at redistributing income to enhance consumption among lower-income earners?

What is the main characteristic of the Growth, Employment and Redistribution (GEAR) strategy in South Africa?

In an imperfect market, which type of inefficiency occurs when firms produce less at higher costs, leading to underutilization of resources and welfare losses to society?

What is a key characteristic of a monopoly?

What is the primary goal of governments intervening in imperfect markets through regulations and antitrust laws?

In an oligopoly, what type of competition is often used by firms to differentiate their products?

What is a characteristic of monopolistic competition?

What is a consequence of imperfect markets?

What is a difference between monopolies and oligopolies?

What is a consequence of monopolistic competition?

What is a characteristic of imperfect markets?

What is a goal of understanding imperfect markets?

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

What is the main argument in favor of protectionism in terms of national security?

What is an advantage of free trade, according to the theory of comparative advantage?

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

What is the main difference between economic growth and development?

What is a common tool used to implement protectionism?

What is the infant industry argument in favor of protectionism?

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

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

What is a challenge posed by the North/South divide in terms of economic development?

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

What is an example of a positive externality?

What is the term for goods that are non-excludable and non-rivalrous?

What is a consequence of imperfect competition in markets?

What is a reason for government provision of public goods?

What is an example of an asymmetric information problem?

What is a consequence of immobility of factors of production?

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

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

What is a consequence of market failures on the environment?

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

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

What is a key aspect of perfectly competitive markets?

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

What distinguishes an industry from an individual business in a perfectly competitive market?

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

What is a revenue concept that businesses in a perfectly competitive market focus on?

What is a cost concept that businesses in a perfectly competitive market focus on?

What is the primary reason for the inefficiencies in imperfect markets?

What is the main difference between oligopolies and monopolies?

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

What is the primary characteristic of monopolistic competition?

What is the primary consequence of imperfect markets?

What is the primary goal of studying imperfect markets?

What is the primary characteristic of a monopoly?

What is the primary difference between monopolistic competition and oligopoly?

What is the primary consequence of oligopolistic competition?

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

Which of the following market failures is characterized by the underprovision of public goods?

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

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

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