Economics lets help

Peleus

The LeavyC wrote: »

Well not quite right.... its between a sand wedge and a pitching wedge, but you're right, its much more expensive.



Q: 3 conditions necessary for price discrimination.

Good knowledge of consumer elasticities: to know just how much they can discriminate before people change to cheaper alternatives

Monopoly in their own product: so that consumers wont have any cheaper/better value alternatives to turn to

Consumer Inertia: When consumers couldnt be bothered buying the cheaper product because the shop is too far away etc... so they buy the expensive one.

Consumer Ignorance: When consumers have no idea that they are victims of Price Discrimination so they buy it not knowing they can get a better deal elsewhere.


Q: two examples of External economies of scale.

The LeavyC

not sure if im right but...

setting up of supply side industries which may be able to supply the firm with cheaper raw materials.

Government training schemes to train workers for specialization.

Timans

Peleus wrote: »

Good knowledge of consumer elasticities: to know just how much they can discriminate before people change to cheaper alternatives

Monopoly in their own product: so that consumers wont have any cheaper/better value alternatives to turn to

Consumer Inertia: When consumers couldnt be bothered buying the cheaper product because the shop is too far away etc... so they buy the expensive one.

Consumer Ignorance: When consumers have no idea that they are victims of Price Discrimination so they buy it not knowing they can get a better deal elsewhere.


Q: two examples of External economies of scale.

1. The development of better infrastructure will benefit ALL firms.
2. If the industry grows in size, then there will be a higher demand for a certain raw material, the supplier of this raw material may expand it's business as a result of the increased demand and therefore will reduce it's price.

Qs. Explain the shape of a Short Run Average Cost Curve.

ian.f

Peleus wrote: »

Q: two examples of External economies of scale.

Set up of subsidiary industries which specialise in the production of one particular part of a good leading to cost of production for it to fall
e.g Car tyre manufacturer setting up near area with large amount of car building firms.

Secondary firms will set up to supply services to the industry e.g Hotels setting up in a growing business area

Peleus

Timans wrote: »

1. The development of better infrastructure will benefit ALL firms.
2. If the industry grows in size, then there will be a higher demand for a certain raw material, the supplier of this raw material may expand it's business as a result of the increased demand and therefore will reduce it's price.

Qs. Explain the shape of a Short Run Average Cost Curve.

Short Run Average Costs fall because of
Specialization of labour. As more workers are employed they work in a more efficient manner as each aditional worker can be assigner to a specific task.
Better spread of Costs As output rises Variable costs rise but fixed costs remain the same. These fixed costs are spread out over more output.

Short Run Average Costs rise because of
The Law of Diminishing Marginal Returns This law states that as more and more of a variable factor is added to a fixed factor a stage will eventually be reacher where returns begin to decline. As more workers are employed the marginal returns from them will eventually decline. Therefore the Average Costs rise in the short run.

The SRAC curve falls and rises and is therefore U shaped.

Give a formula and explain the Reserve Ratio. How does this allow banks to 'create credit'?

Fuascailt

The Reserve Ratio/ Primary liquidity Ratio/ Cash Ratio is the percentage of total deposit liabilities the bank must keep in cash.
Formula: Cash X 100
Total Deposits

How do banks create credit?
*Banks recieve cash deposits from customers e.g. €100
*It is known from experience that only a small percentage of these depsits will ever be required in cash. The Central Bank (European?) decides on the reserve ratio.
* Amount of credit that can be created is calculated by:
(Increase in Cash reserves X 1) - initial increase in cash reserves
Reserve ratio
* So with a reserve ratio of 10% and a cash deposit of €100, the bank can support €1000 of deposits, i.e. create €900 of credit

I'd usually throw in before and after balance sheets as well.

What steps could the govts in Lesser Developed Countries take to promote economic development?

nu-g 2008

What steps could the govts in Lesser Developed Countries take to promote economic development?[/quote]

-ATTRACT INVESTMENT BY IMPROVING INFRASTRUCTURE; roads rail ports etc creats work directly and indirectly by the building part and then attractin new firms to set up these.

-PROMOTE POLITICAL STABILITY AND PRICE;without these the economy will never grow as potential investors wont have confidence in setting up here due to the high risks involved

REDUCE CORRUPTION;ldc gov can have corrupt gov where money is misused and mispent and brown packages are often exchanged on the sly eg bertie ahern former taoiseach of eire. this makes these countries unattractive to foreign aid and investment !

go on rr

q;what are the causes(types) of inflation the economic consequences of those types and how can they be solved...?

what are the economic aims of the gov and how can they be achieved ?

<nu-g>

nairy-hipples

nu-g 2008 wrote: »

What steps could the govts in Lesser Developed Countries take to promote economic development?

-ATTRACT INVESTMENT BY IMPROVING INFRASTRUCTURE; roads rail ports etc creats work directly and indirectly by the building part and then attractin new firms to set up these.

-PROMOTE POLITICAL STABILITY AND PRICE;without these the economy will never grow as potential investors wont have confidence in setting up here due to the high risks involved

REDUCE CORRUPTION;ldc gov can have corrupt gov where money is misused and mispent and brown packages are often exchanged on the sly eg bertie ahern former taoiseach of eire. this makes these countries unattractive to foreign aid and investment !

go on rr

q;what are the causes(types) of inflation the economic consequences of those types and how can they be solved...?

what are the economic aims of the gov and how can they be achieved ?

<nu-g>[/quote]

Aims of Government are
1 to provide adequate infrastructure
2 to control inflation
3 to achieve full employment
4 to achieve equilibrium on the balance of payments
5 to achieve a just social policy
6 to achieve a balanced regional development

Q what is economic growth?

Fuascailt

Economic Growth is an increase in GNP per head without changes in the society.

Give the Law of Comparative advantage and the assumptions underlying it?

Peleus

Fuascailt wrote: »

Give the Law of Comparative advantage and the assumptions underlying it?

A country should specialise in the production of goods and services at which it is relatively more efficient and obtain its other needs through international trade. It is also known as the law of comparative cost. It was put forward by David Riccardo

Assumptions:
Transport costs ignored (It may not be beneficial if the transport costs are huge)

Assumes constant returns to scale (assumes that if 1 worker who can create 5 chairs two workers can produce 10 chairs)

Mobility of factors (assumes F.O.Ps from one industry will be ok for the other one)

Ability to find alternate employment. (assumes workers can just switch industry)

Define National Income. Give three reasons for the use of national income statistics. What is the multiplier? and then give a formula for the multiplier in a open economy and a formula for national income. phew!

shadowspawn

National Income=Its is all the goods and services(wealth) produced in a country over a period of time ussually a year.

National Income statistics 1.To comapre economic growth and national income with other countries.
2.To find economic growth of a country.
3.To find the importance of different sector in the economy.

Multiplier: Its is the number of times the increase in national income is greater that the injections which caused it.
1
mps+mpt+mpm



Whats are the causes of a decrease in demand of housing market?

ciaranajl

Um, not to interrupt or anything, but wouldn't it be more productive to just flick to your index to get the answer, and move on?

cHaTbOx

ciaranajl wrote: »

Um, not to interrupt or anything, but wouldn't it be more productive to just flick to your index to get the answer, and move on?

Defeats the purpose of the thread ,At this stage we nearly have all the answers in our memory or thereabouts and
this is a way of refreshing it and seeing something you may have over looked:)

Peleus

shadowspawn wrote: »

Whats are the causes of a decrease in demand of housing market?

I'm gonna guess:

High Interest Rates:
high interest rates would discourage borrowing and encourage saving. High interest rates would discourage buyers from taking out a mortgage as they will pay a lot more in the long run. Because of these interest rates, people are saving their money rather than buying homes, so the demand for housing is decreased.

Real incomes reduced by inflation
Due to our rate of inflation of approx 5%, buyers have less disposable income and their cost of living has risen. The amount of money they have will be saved to earn interest rather than be spent on a mortgage that will grow and cost them a lot of money in the long run. Therefore People are saving their money and the demand for housing has decreased.

The usual interest and inflation trick. Works for every question!

Fuascailt

Could you put in there that the construction industry has had serious growth for several years and supply now exceeds demand?

Peleus

Fuascailt wrote: »

Could you put in there that the construction industry has had serious growth for several years and supply now exceeds demand?

That means supply has increased. But the question was how has demand increased. If they ask about house prices, you can can say that. the prices fall because supply exceeds demand. Supply goes up because of growth in the construction sector yada yada yada....

pocket aces

dont seem to be any questions asked, so...

wat is a better indicator of standard of living in ireland, GNP or GDP??

GretchenWieners

Just saw this thread, I feel your pain with Economics! Was my last exam last year and was a disaster. Bascially make sure whatever you write down is precise. It's the only way to get full marks. Make sure you read over it properly too at the end because I saw mine on the rechecks and made some very stupid mistakes.

jakimo

gnp is a better indicator of living standards an gdp includes net facot income from abroad which in ireland dur to rpatriation of profits and remittances is a negative figure, thus over estimating the standards of living.
Gdp however is a better indicator of economic activity as it measures the amount of economic activity occuring within the boundaries of the state




Name three things which john maynard Keynes contributed to economic thought?

Fuascailt

Theory of Liquidity preference for determining interest rates
The Multiplier, MPS, MPC etc- tools to explain his theories
National Income could reach equilibrium without reaching full employment

What are the factors that influence Price Elasticity of Supply?

Peleus

Fuascailt wrote: »

Theory of Liquidity preference for determining interest rates
The Multiplier, MPS, MPC etc- tools to explain his theories
National Income could reach equilibrium without reaching full employment

What are the factors that influence Price Elasticity of Supply?

Proce of related goods
Cost of production
Technoilogy
Unplanned Factors

What is a luxury good? give one example

rc28

Fuascailt wrote: »

What are the factors that influence Price Elasticity of Supply?

-Mobility of factors of production
-If the firm is operating close to full capacity
-The time period under consideration
-The nature of the product
-Degree of specialisation of labour and machinery

EDIT;
Missed above post. A luxury good is a normal good that has a high elasticity of demand- it is also not a necessity eg 'Designer' goods.

What is the Purchasing Power Parity theory?

The LeavyC

Purchasing power parity theory states that in the abscence on non price barriers to trade, after allowing for transport costs the price of a good will be the same in all countries that have an exchange rate mechanism between them.

Q: 3 forms of collusion which firms in an oligopolistic market may use

Fuascailt

Limit Pricing
Dividing the market
Refusing to supply any retailer who also buys from firms outside the cartel
Implicit Collusion

Q: Define Price competition and explain what market structures it would be associated with

EDoyle

Fuascailt wrote: »

Q: Define Price competition and explain what market structures it would be associated with

price competition is when a firm tries to increase sales by cutting its prices, other firms will have to follow and all firms except the most efficient will lose out

State 3 non insurable risks which an entrepreneur faces

Peleus

Peleus wrote: »

Price of related goods
Cost of production
Technology
Unplanned Factors

oops that was wrong

Fuascailt wrote: »

Limit Pricing
Dividing the market
Refusing to supply any retailer who also buys from firms outside the cartel
Implicit Collusion

Q: Define Price competition and explain what market structures it would be associated with

price competition is when firms compete with one another by lowering prices in order to gain a bigger share of the market. This is associated with Imperfect competition an perfect competition??? Firms in oligopoly do not engage in price competition as this would lead to a price war.
think thats right!

what is the relationship between GNP at current market prices and GNP at factor cost???

Peleus

EDoyle wrote: »

price competition is when a firm tries to increase sales by cutting its prices, other firms will have to follow and all firms except the most efficient will lose out

State 3 non insurable risks which an entrepreneur faces

movement of taste away from good
... i dunno...

NaiveMelodies

its actually incredibly easy. how do people find this subjct difficult

Fuascailt

I love this subject

Peleus wrote: »

what is the relationship between GNP at current market prices and GNP at factor cost???

GNP at factor cost + taxes -subsidies= GNP at current market prices

What are the limitations of the Consumer Price Index?

Peleus

Fuascailt wrote: »

I love this subject



GNP at factor cost + taxes -subsidies= GNP at current market prices

What are the limitations of the Consumer Price Index?

The weights apply in base year only. But they're assumed to apply for every year.
Does not account for increase is quality of goods.
Does not account for PAYE increases

Heres a question, i'm only doing Supply, Demand, market structures, the consumer, costs, Economies of scale etc..., National Income, CPI, Comparative advantage and some FOPs. i know a bit of banking aswel. Do you think i could get a C from just that if i know it reasonably well????????