1. (a) (i) Distinguish between the terms 'effective demand' and 'derived demand'. (ii) Outline two possible exceptions to the Law of Demand. (b) The market for a brand of blue jeans is in equilibrium. Explain, with the aid of a separate diagram in each case, the effects which each of the following is most likely to have on the equilibrium position: (i) Due to the economic downturn there is a reduction in the real income of consumers. (i) A fall in the price of cotton, a key input in the production of the blue jeans, (iii) The blue jeans have recently been endorsed by a popular sports star. (c) A fall in the price of a consumer product has both a substitution effect and an income effect. (1) Explain the underlined terms. (ii) If the price of an inferior product falls (all other things being equal) will more or less of the product be purchased? Explain your answer with reference to the substitution effect and the income effect. 2. (a) Technology companies such as Apple and Samsung are currently involved in legal disputes regarding patents on various aspects of their smartphones. When a company wins a patent dispute it may become the sole producer using the patented technology. (1) Explain three barriers to entry, other than patents, that can exist in business. (ii) Outline two reasons why monopolies may not be in the public interest. (b) Explain, with the aid of a diagram, the long run equilibrium position of a monopoly firm (c) The global market for toothpaste products can be described as an imperfectly competitive market, where firms engage in competitive advertising and branding (i) Explain the term 'competitive advertising'. (ii) Outline, using an example, how advertising can be used to prevent small firms entering an industry (iii) State and explain two possible disadvantages of advertising for the consumer. 3. (a) State and explain four economic influences on an individual firm's demand for labour. (b) Explain, with the aid of a labour market diagram in each case, how equilibrium wage rates are determined in: . A free labour market; A labour market where a trade union has negotiated a minimum wage. (c) Women in Ireland earn on average 17.1% less per hour than men, according to a study by the European Commission (Tackling the gender pay gap in the European Union, 201 1). (1) Outline two possible reasons for the lower wage rates earned by women in the Irish economy. (ii) Outline one measure that could be taken to close the gender pay gap. (d) Explain briefly Karl Marx's economic theory about the exploitation of labour in a capitalist system
