1. (a) (i) Define the economic terms: individual (firm) supply; market supply.

(ii) Explain, with the aid of labelled diagrams, the relationship between individual

(firm) supply and market supply.

(b) Explain, with the aid of a labelled diagram, the supply curve of an individual firm in

each of the following circumstances. State one example in each case.

(i) A firm is willing to increase supply as price rises, but there is a minimum price below

which the firm will not supply at all.

(ii) A firm can supply only up to a maximum production capacity.

(iii) The product is fixed in supply (e.g. perishable good) and a firm is operating in the

short run.

(c) Outline FOUR factors, other than price, which affect the supply curve of an individual

firm. In each case explain how the factor affects the supply curve.

2. (a) (i) A firm operating under conditions of perfect competition is a 'price taker'. Explain

the concept of being a 'price taker'.

(ii) Explain, with the aid of a labelled diagram, the equilibrium position of a firm in

short run perfect competition.

(b) With the aid of a labelled diagram(s), explain the impact which the entry of new firms

would have on the market and on the equilibrium position of this firm.

(c) (i) Many firms today engage in product differentiation. Explain this underlined term showing,

with suitable examples, how it can be achieved.

(ii) Explain the effect of product differentiation on the AR and MR curves of a firm, which

previously operated under conditions of perfect competition.

(25 marks)

[75 marks]

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3. (a) The demand for labour as a factor of production is a derived demand and is affected by

that factor's Marginal Revenue Productivity (MRP).

(i) Explain each of the underlined terms.

(ii) Outline TWO developments, other than a fall in MRP, which may result in a firm

reducing its number of employees.

(b) (i) State and explain THREE factors which are currently affecting the supply of labour

to the Irish economy.

(ii) The demand for labour has increased significantly in certain sectors of the Irish

economy in recent years, e.g. construction.

Discuss THREE economic consequences of this situation.

(c) 'At a time of full (or near full) employment in the Irish economy, it is important that there should

be the maximum occupational mobility and geographical mobility of labour.'

(i) Distinguish between the two underlined terms.

(ii) Outline THREE economic policies which could increase either occupational mobility of

labour or geographical mobility of labour, in Ireland.

4. (a) Free Enterprise (Laissez Faire) and a Command Economy (Central Planning) are examples

of economic systems.

(i) Explain each of the underlined terms.

(ii) In relation to any ONE of the economic systems above, outline TWO possible economic

advantages and TWO possible economic disadvantages.

(25 marks)

(b) (i) 'The Irish Economy can be described as a Mixed Economy'. Outline FOUR examples of

economic activity in the Irish economy to support this view.

(ii) Do you consider that the Irish economy is moving towards more free enterprise or towards

more central planning in recent years? Explain your answer, using appropriate examples.

(c) In the case of any TWO of the following economists, outline TWO contributions which each one

has made to the development of economic ideas:

Adam Smith; Alfred Marshall; John Maynard Keynes; Milton Friedman.