,,, i need detailed explanation on each part
3. Ireland has a mixed economy. What do you understand by the underlined term? State one economic advantage and one economic disadvantage of this type of economic system. Explanation: Advantage: Disadvantage: (16 marks) 4. Define 'cost-push' inflation. Identify two sources of this form of inflation in the Irish economy. Definition: Source 1: Source 2: (16 marks) 5. The demand for land is a derived demand. Explain what is meant by the underlined term with reference to land. (16 marks) Page 2 of 8 6. Outline two possible economic effects of UK Sterling ({) falling in value relative to the Euro (E) for the Irish economy. (i) (ii) (17 marks) 7. (a) State the Law of Diminishing Marginal Utility: (b) The table below illustrates the Law of Diminishing Marginal Utility. Number of units consumed 2 3 4 5 6 Total Utility in units 30 65 85 100 110 115 Marginal Utility in units 30 Complete the table and state the point after which diminishing utility sets in. (17 marks) 8. Define "economic development'. Explain two social costs of economic development. Definition: Cost 1: Cost 2:1. (a) (i) Show, by means of a labelled diagram, the market demand and supply curves for games consoles e.g. Xbox, PlayStation, Nintendo DS. Identify and explain the market equilibrium position. (ii) 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 above equilibrium position: 50% reduction in the price of computer games used with the games console; . Quota placed on the quantity of games consoles entering Ireland; Government introduce a 2% levy (tax) on all income earned. (30 marks) (b) (i) Define income elasticity of demand and price elasticity of demand. (ii) Which figure stated below is most likely to represent each of the following: Income elasticity of demand for low price cuts of meat; Income elasticity of demand for Apple iPhones; Price elasticity of demand for Petrol. - 1.6 - 0.1 + 4.3 Give reasons for your choice in each case. (30 marks) (c) Assume Income elasticity of demand for games consoles is + 2.5 and total sales in 2008 were 100,000 units. Calculate the expected total sales for the year if consumers' incomes are expected to fall by 8% in 2009. Show your workings. (15 marks) [75 marks] 2. (a) (i) State and explain the assumptions underlying the theory of imperfect competition. (ii) Outline the advantages imperfect competition may offer consumers. (30 marks) (b) Explain with the aid of a diagram in each case the conditions for a profit maximising firm to be in equilibrium under imperfect competition: (1) in the short run; (ii) in the long run. (30 marks) (c) 'Major food retailers in the Irish market, such as Aldi, Dunnes, SuperValu and Tesco operate under conditions of Imperfect Competition'. Do you agree with this statement? Give reasons for your answer, referring to major food retailers in the Irish market mentioned above. (15 marks) [75 marks] Page 4 of 8 3. (a) The Short Run Average Cost (AC) of a firm is usually shown as a U-shaped curve. (i) State and explain the reason(s) for the shape of the AC curve: . From point X to Y; From point Y to Z. Unit 1 Z Cost MC AC Quantity (ii) Explain the relationship between the Marginal Cost (MC) and Average Cost (AC) curves as shown above. (25 marks) (b) "The shape of a Long Run Average Cost (LRAC) curve is determined by economies and diseconomies of scale'.(a) 'Banks may fail by over-extending their loan book'. Explain this statement within the context of a bank's twin requirements of liquidity and profitability. (25 marks) (b) Keynes' concept of 'Liquidity Preference' is based on three reasons why people desire to hold wealth in money form. (i) State and explain each of these reasons. (ii) Discuss the effect a fall in interest rates is generally expected to have on each of these reasons. (30 marks) (c) Outline how the recent tightening (reduction) in the availability of credit may affect: (i) The Irish Motor Industry; (ii) Inflation; (iii) Ireland's Balance of Payments. (20 marks) [75 marks] Page 5 of 8 5. (a) The following table shows the level of National Income its Consumption, Investment and Export components at the end of periods 1 and 2, and the level of Imports at the end of period 1. (For the purpose of this question you may ignore the Government sector). National Income Consumption Investment Exports Imports Period 1 $40,000 $30,000 E15,000 (15,000 620,000 Period 2 E50,000 E39,000 E18,000 E21,000 ? Calculate the following, showing all your workings: (i) Level of imports at the end of period 2; (ii) Level of savings at the end of period 2; (iii) Marginal Propensity to Consume (MPC); (iv) Size of the Multiplier. (20 marks) (b) "Ireland is described as a small open economy and this affects the government's ability to influence the level of aggregate demand in the country'. Explain this statement, using the Circular Flow of Income diagram to support your answer. (30 marks) (c) Outline the limitations of using Gross National Product at Current Market Prices when comparing the average standard of living between two different years. (25 marks) [75 marks] 6. (a) Define each of the following terms: (i) Current Budget Deficit; (ii) Exchequer Borrowing Requirement; (iii) Public Sector Borrowing Requirement; (iv) National Debt. (20 marks) (b) Ireland's National Debt grew from (36bn at end of 2006 to 650.4bn at end of 2008. Outline the major reasons for the increase in National Debt. Describe the economic consequences (positive and negative) of the increase in National Debt in recent years. (35 marks) (c) The Irish economy will experience a substantial Current Budget Deficit for 2009. You have been employed as an Economic Advisor to the Minister for Finance. (i) State and explain two specific courses of action (one on the revenue side and one on the expenditure side of the Government Account) you would advise the Minister to take in order to reduce significantly the Current Budget Deficit. (ii) Outline the possible economic effect(s) of each course of action you have chosen. (20 marks) [75 marks]'.r'. {1) lb) is} {1} {'1} {c} The 'Law of Comparative Advantage' suggests that sialisation and trade increases world output. {i} Explain the meaning of the underlined term in the context of international trade. {ii} Identify the main assumptions underlying this law. [iii]: Identify two sources of comparative advantage for the Irish economy. {it} murals) Ireland is a small open economy which relies very heavily on international trade. (i) Discuss the importance of international trade to the Irish economy. {ii} Are there any economic justications for a government intervening in order to restrict international trade? Outline reasons for your answer. (it? marks} Write a brief note on David Ricardo's contributions to economic thought. (iii marks) [TS marks] Discuss the factors that inuence the size of the Irish labour force. {2!} murals) 'Aecording to the Quarterly National Household Survey (Qt-1H5} the rate of unemployment was T396 in December 2008'. {i} Name a source, other than QNHS, for unemployment statistics in Ireland {ii} State, with reasons, which of the measurements of unemployment used by each of these sources gives the most accurate estimate of Irish unemployment {iii marks) {i} Outline the major causes of the recent increases in unemployment in the Irish economy. {ii} Discuss economic policies which the Irish government might pursue in order to reduce the level of unemployment. {it} marks) [75 marks] Remember to return this question paper witit tire answer hunkf's} .tttsetttiI to answer the questions in Section B. (16 marks) 6. The table below shows the annual average level of income in a country and the corresponding demand for Product A for two years. Year Income (() Product A (units) Year 1 $7,000 100 Year 2 63,000 200 (i) Calculate the income elasticity of demand (YED) for Product A. Show your workings Workings: (ii) Using your knowledge of YED, explain the economic meaning of this figure you calculated in (i) above. Answer: (17 marks) Page 3 of 12 SECTION A (continued) The primary aim of the ECBs monetary policy is to maintain price stability. (a) Define the term monetary policy. b) Outline two benefits of price stability for the Irish economy. (i) (ii) (17 marks) 8. (a) Outline two possible economic effects of the Irish government introducing a levy on home insurance premiums to help address damage caused by the recent flooding crisis in Ireland. (i) (ii) (b) Suggest one alternative method for addressing the flooding crisis in Ireland. (17 marks) 9. "The national minimum wage is increased by 50 cent, bringing it to 69.15 in a bid to make work pay." (Source: Irish Independent, October 2015) Outline three possible economic impacts of this measure on the Irish economy. (i) (ii)1. (a) (i) Outline four factors that determine the supply of a good or service. (ii) Explain the difference between a movement along a supply curve and a shift in a supply curve. Use appropriate diagrams to illustrate your answer. [35] (b) Read the following statements and indicate if they are TRUE or FALSE. Explain your answer in each case. (i) The cross price elasticity of demand for substitute goods has a negative value. (ii) Price Elasticity of Demand (PED) tends to be more elastic in the long-run than in the short-run. (iii) When demand for a good is price inelastic, a reduction in price will increase total sales revenue. (iv) Income elasticity of demand (YED) for luxury goods is positive. [24] (c) Using the concepts of demand and supply explain, with the aid of a labelled diagram, how a shortage of tickets for a major concert may arise. The concert venue has a maximum capacity of 30,000 people. [16] [75 marks] 2. Cadbury, Mars and Nestle dominate the chocolate industry in the European Union. (a) (i) State a market structure which most closely reflects the situation above, giving a reason for your answer. (ii) Outline two other key characteristics of this market structure. (iii) Explain, with the aid of a labelled diagram, the likely shape of the demand curve in this market structure. [35] (b) (i) If a large US chocolate manufacturer entered the EU chocolate market, outline the possible economic impacts of greater competition in this market. (ii) Outline two factors which could make it difficult for this US chocolate manufacturer to enter the EU chocolate market. [25] (c) Explain why small firms succeed in some markets while other markets are dominated by large firms. [15] [75 marks] Page 5 of 12 3. (a) Explain the following terms in relation to the factor of production labour. (i) Participation rate (ii) Real wages (iii) Labour Productivity Derived demand [20] (b) (i) Discuss the factors that impact on the supply of labour. (ii) Outline two challenges currently facing the Irish labour market and state one appropriate government policy response for each challenge identified. [35] (c) Discuss reasons why different workers are paid different wage rates. [20 [75 marks] 4. (a) (i) Distinguish between the short-run and the long-run production periods. (ii) In the short-run firms may stay in the industry even if they are making a loss. Explain this statement. [15] (b) (i) Explain the terms marginal revenue and marginal cost. The table below shows costs and revenue data of a firm.1. (a) Explain, with the aid of a diagram, the long run equilibrium position of a monopoly firm. (25 marks) (b) If firms wish to enter a monopoly market they will face barriers to entry. Explain THREE of these barriers. (15 marks) (c) If a monopoly firm wishes to engage in price discrimination, certain conditions must apply. State and explain THREE of these conditions. (15 marks) (d) Irish semi-state transport companies are facing increasing competition. Discuss ONE possible advantage and ONE possible disadvantage of this development for: Consumers; AND . Employees of semi-state transport companies. (20 marks) [75 marks] 2. (a) Define the following types or degrees of price elasticity of demand: (i) Perfectly elastic demand; (ii) Perfectly inelastic demand; (ii) Elastic demand (iv) Unitary elastic demand. (20 marks) (b) State and explain FIVE factors that affect price elasticity of demand. (25 marks) (c) A consumer spends (120 per month on a product when its unit price is 80c, and continues to spend (120 per month on this product when its unit price increases to El. (i) Using the formula below, calculate the consumer's price elasticity of demand. Show all your workings. AQ x Pi + P2 AP Q1 + Q2 (ii) Is demand for this product elastic, inelastic or unitary elastic? (iii) Should the seller make any changes in the selling price of this commodity to increase overall revenue? Explain your answer. (30 marks) [75 marks] Page 4 of 7 3. (a) (i) State the Law of Diminishing Marginal Returns. (ii) Using the table below, state after which level of employment diminishing marginal returns set in. Explain your answer. Number of persons employed 2 3 4 5 Total Output (in units) 14 30 50 64 76 Marginal Output (in units) 14 (15 marks) (b) The short-run average cost curve of a firm initially slopes downwards and afterwards slopes upwards. Explain why this is the pattern of short-run average costs. (15 marks) (c) It is generally agreed that the long-run average cost curve initially slopes downwards due to economies of scale and then slopes upwards due to diseconomies of scale. These economies
