Help answer the following problems...all parts needs to be done

1. (a) (b) (b) (In) (E) (1) (\"1 Dene the economic terms: individual (firm) supply; market supply. Explain. with the aid of labelled diagrams. the relationship between individual (rm) supply and market supply. {2!} marks) Explain, with the aid of a labelled diagram, the supply curve of an individual firm in each ofthe following circumstances. State one example in each case. (ii (\"I A rm is willing to increase supply as price rises but there is a minimum price below which the firm will not supply at all. A rm can supply only up to a maximum production capacity. (iii) The product is fixed in supply [e.g. perishable good} and a rm is operating in the short run. {3!} mania) 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. {25 marks) [15 marks] (i) (ii) A rm operating under conditions of perfect competition is a 'price taker'. Explain the concept of being a 'price taker'. Explain, with the aid of a labelled diagram, the equilibrium position of a rm in short run perfect competition. {25 mania) 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. (i) (ii) {25 marks) Many rms today engage in product differentiation. Explain this underlined term showing, with suitable examples, how it can be achieved Explain the effect of product differentiation on the AR and MR curves of a rm, which previously operated under conditions of perfect competition. (25 marks) [1'5 marks] Page 4 arts 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) (ii) (i) (ii) Explain each of the underlined terms. Outline TWO developments. other than a fall in MRP' which may result in a rm reducing its number of employees. (20 marks) State and explain THREE factors which are currently affecting the supply of labour to the Irish economy. The demand for labour has increased signicantly in certain sectors of the Irish economy in recent years, e.g. construction. Discuss THREE economic consequences of this situation. (30 marks) 'At a time of ill [or near full} employment in the Irish economy. it is important that there should be the maximum occupational mobilig and gmraphical mobilig of labour.' (i) (ii) Distinguish between the two underlined terms. Outline THREE economic policies which could increase either occupational mobility of labour- 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. (30 marks) (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. (20 marks) [75 marks] Page 5 of 8 5. (a) Explain the following economic terms, using appropriate examples in each case: (i) Government Current Budget; (ii) Government Capital Budget; (ii) Revenue Buoyancy; (iv) Regressive Taxation. (25 marks) (b) State and explain how a government budget could be affected by each of the following developments: (i) a rise in interest rates in the economy; ii) a fall in the rate of stamp duty on property purchased; (iii) the introduction of subsidised child care for all families within the state. (30 marks) ) You are appointed Economic Advisor to the Minister for Finance. Outline the economic arguments you would identify for the Minister in favour of lowering Irish income taxation rates. (20 marks) [75 marks] 6. (a) The main components of National Income are: Consumption, Investment, Government Expenditure, Exports, Imports. (i) Show the equation which links all of these components with the level of National Income in the economy. (ii) Explain what determines/influences the size of each of these components of National Income. (25 marks) (b) The table below shows the level of National Income, Consumption, Investment, Exports and Imports at the end of Year 1 and Year 2 (For the purpose of this question you may ignore the government sector.) Year National Income Consumption Investment Exports Imports E10,000 E8,600 61,000 (1,200 6800 2 E1 1,200 29,500 E1,300 E1,100 Calculate the following, showing all your workings: The level of Exports in Year 2; The Marginal Propensity to Import; (iii) The Marginal Propensity to Save; (iv) The size of the Multiplier. Explain the economic meaning of this multiplier figure.(c) Less developed countries (LDCs) are primarily concerned with achieving economic development while developed countries are concerned with achieving economic growth (i) Distinguish between the two underlined terms. (ii) Outline THREE characteristics which indicate that a country is a LDC. (25 marks) [75 marks] Page 6 of 8 7. (a) The Balance of Payments is made up of the Current Account and the Capital Account. Explain each of the underlined terms. Include details of the main components of each account in your explanations. (30 marks) Suppose the euro (() increases in value relative to the American dollar ($) and sterling (f). Outline the likely effects this increase would have on any THREE components of the Balance of Payments, which you listed in answering (a) above. [ At least one component should be from the Capital Account.] (25 marks) (c) The enlargement of the European Union (EU) continues with the addition of Bulgaria and Romania in January 2007. There are now 27 member states. Discuss FOUR economic consequences for the Irish economy, of the EU enlargement process. (20 marks) [75 marks] 8. (a) Outline, using appropriate figures, how the Irish economy performed in the past twelve months in each of the following areas: (i) employment; (ii) interest rates; (iii) price inflation; (iv) government taxation. (20 marks) (b) (i) State and explain FOUR economic aims of the Irish government. (ii) Discuss TWO examples where economic policies introduced to achieve one economic aim, may make it more difficult to achieve one of the other aims. (25 marks) (c) 'The National Debt / GDP ratio has fallen from over 90% during the first half of the 1990's to an estimated 25.1 % at the end of 2006. (National Treasury Management Agency) (i) Briefly explain each of the underlined terms. (ii) Outline the economic benefits of this changed situation for the Irish economy. (30 marks) [75 marks]{b} (6) id} (bl (6) (b) (11} Outline the assumptions underlying the theory of Perfect Competition. [2|] marks} {i} Explain, with the aid of a labelled diagram, how a rm in Perfect Competition achieves equilibrium in the short run. {ii} Derive and explain the short run supply curve of this rm. [2|] marks] Discuss, with the aid of labelled diagrams, the impact which the entry of new rms would have on the short run equilibrium of existing rms, in perfectly competitive markets, earning super-normal prots. [2|] marks] Firms in Perfect Competition tend not to engage in advertising. State and explain TWO reasons why. [15 marks] |75marks| (i) Draw a short-run average cost curve and a short-run marginal cost curve. {ii} Explain the relationships between the shapes of these curves. (20 marks) It is generally agreed that the long-run average cost curve initially slopes downward due to economics of scale and then slopes upward due to diseeonomies of scale. These economies and diseconomies can be both internal and external. (i) Dene the underlined terms. (ii) Distinguish between internal and extemal economies of'scaJe, giving TWO examples in each case and explaining how each arises. (30 marks) Discuss the possible social costs and social benets of the new roads being constructed throughout Ireland. (25 marks) [1'5 marksI Page 4 of '.|' Defme {i} Income Elasticity of Demand. {ii} Cross Elasticity of Demand. (15 marks} (i) \"Income elasticity of demand is usually positive but sometimes negative". Explain, giving examples, the meaning of this statement. (ii) A consumer spends 40% of income on a certain good. After the consumer's income doubles [everything else remaining unchanged], only 30% of income is spent on the good. State whether this good is a normal or inferior good and explain your answer. (20 marks) Which of the gures stated below is likely to represent: {i} Income elasticity of demand for potatoes; (ii) Income elasticity of' demand for designer clothes; (iii) Price elasticity of demand for airline seats. 4.8, 41.1, + 2.5 Explain each of your choices. [30 marks] Income elasticity of demand for a good is +1.3 and sales in Year 1 are 20,000 units. If consumers' incomes are expected to rise by 5% in Year 2, calculate the expected level of sales. Show your workings. (10 marks} 4. (a) Define: (i) Capital (ii) Marginal Efficiency of Capital. (iii) Investment (20 marks) (i) State and explain TWO reasons why investment is considered to be important for the Irish economy. (ii) State and explain FOUR factors that influence the level of investment in the Irish economy at present (30 marks ) (c) J. M. Keynes identified three reasons (motives) for holding money. Explain the THREE reasons and outline ONE main influence on each reason. (25 marks) [75 marks] Page 5 of 7 5. (a) (i) Explain how it is possible for banks to create credit. (ii) State and explain THREE limitations on the amount of credit which banks can create. (30 marks) (b) Explain how an increase in the use of 'plastic money' (credit cards, etc.) by customers affects the ability of banks to create credit. (15 marks) (c) The main objective of the European Central Bank's monetary policy is to control inflation. (i) Explain the underlined terms. (ii) The ECB reduced interest rates in 2001. Discuss the effects of this reduction in interest rates on the Irish economy. (30 marks) [75 marks] 6. (a) (i) State the Law of Comparative Advantage. (ii) State and explain the assumptions underlying this law. (30 marks) (b) The table below illustrates the Law of Comparative Advantage. Country Commodity (Hourly Production per Person) Food Machinery Country X 5 tonnes 10 units Country Y 20 tonnes 30 units Total Output 25 tonnes 40 units (i) Use the above example to show how both countries could benefit from international trade. (1i) Calculate the terms of trade for both commodities. (20 marks) (c) Ireland, as a small open economy, relies on international trade. Discuss the factors which affect the competitiveness of Irish-based firms in international trade. (25 marks)(c) Ireland, as a small open economy, relies on international trade. Discuss the factors which affect the competitiveness of Irish-based firms in international trade. (25 marks) [75 marks] Page 6 of 7 7. (a) Outline, using appropriate figures, how the Irish economy performed in the past twelve months in each of the following areas: (i) price inflation (ii) the national debt (iii) cconomic growth (iv) employment. (20 marks) (b) Outline the positive and negative economic consequences of a Current Budget Surplus. (25 marks) (c) (i) Outline, giving examples, TWO reasons why Irish semi-state companies are facing increasing competition. (ii) Discuss ONE advantage and ONE disadvantage of this development for: Consumers Employees of semi-state firms (30 marks) [75 marks] 8. (a) (i) Name the TWO main sources from which the figures relating to unemployment in the Irish economy are taken. (ii) State, with reasons, which of these gives the most accurate measurement of Irish unemployment. (20 marks) (b) (i) Define full employment. (ii) Outline the major economic consequences of very high employment in the Irish economy. (30 marks) (c) In 2001 the Irish economy began to experience a downturn in the level of economic activity. Discuss the reasons for this development in the Irish economy. (25 marks) [75 marks]