Past Year Question (October 2008)

PAST YEAR chief (OCTOBER 2008) PART B QUESTION 1 a) suddenly rationalise the basic scotch problems. i-P: What to produce. E: The scotch arranging of every nation has to acquire a fundamental resultant of what to produce because of the limited economic resources. Every society necessary choose the type and the sum of goods and services that it testament produce. X: How many cars should be produced? Should more(prenominal) clinics be built than schools? ii-P: How to produce. E: This refers to the cheapest method of returnion. There atomic number 18 alternative techniques of producing goods and services. X: Should cars be produced by automatic machines or assembly dividing line workers? iii-P: For whom to produce. E: This refers to dispersion. Distribution of economic benefits depends on the distribution of income. X: How is the interior(a) income distributed? b) Using appropriate diagrams, explain wherefore it is important for a supplier to know whether the demand for his/her product is stretch or in whippy. DIAGRAMEXPLANATION P d Q - elasticized demand. - Small ploughshare enthrall in price will lead to a big constituent change in sum of money supplied. P d Q - Inelastic demand. - bighearted circumstances change in price will only affect a small percentage of the quantity supplied.

P d Q - dead inelastic demand. - A percentage change in price has no effect on the percentage change in quantity supplied. P d Q - Perfectly elastic demand. - An almost zero percentage change in price brings a very large percentage change in the quantity supplied. c) Using appropriate candid numerical examples, explain the deflection between economic profit and...If you involve to get a luxuriant essay, order it on our website: Ordercustompaper.com

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