Category: 1.3 Economics

Q. Give some bad examples of subsidies which had adversely affected the economy. A. Agricultural subsidies Support for agriculture dates back to the 19th century. It was developed extensively in Read More …

Q.What the negative impacts of subsidy to the economic health of a nation? A.Competitive equilibrium is a state of balance between buyers and suppliers, in which the quantity demanded of Read More …

Q. List down four (4) common types of subsidies given out by government of developing countries. A. Production subsidy A production subsidy encourages suppliers to increase the output of a Read More …

Q.Why 吃亏 has anything to do with Pareto Efficiency? A.An article is posted in my other blog – justLetak! here.

Q.Compare GDP and GNP. A.From Wikipedia: Gross national product (GNP) is the market value of all the products and services produced in one year by labor and property supplied by Read More …

Q.Differentiate between fixed cost and variable cost. (5 marks, 2012 Q3b) How are they inter-play with the law of diminishing marginal return in various production stages? A.Fixed costs are costs Read More …

Q.a) In the short-run, all production process will be subjected to the law of diminishing marginal returns. Using graph and table, illustrate this law. (20 marks, 2012 Q3a) A.a) The Read More …

Q.Explain diagrammatically how prices are determined by free forces of demand and supply. (5 marks) (5 marks, 2012 Q1bii) A. The Determination of Price and Quantity The logic of the Read More …

Q.What is the meaning of ‘demand’. Why is the market demand curve sloping downward? (5 marks) (5 marks, 2012 Q1bi) A.i) Meaning of ‘demand’. Definition of ‘Demand’ An economic principle Read More …

Q.Illustrate how GDP can be calculated with the following events in your country. Extracted from Khan Academy at www.khanacademy.org. A.1. Khan Academy paid $100k for a new software to engineer Read More …

Q. Why are they called Consumer and Producer ‘surplus’? What do you mean by ‘surplus’? Illustrate how the graph can be used to explain market collusion among the producers. A. Read More …

Q.What do you understand by ‘externalities’? A. In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.[1] For example, manufacturing Read More …

Q.What is Deadweight Loss? Explain with a diagram and with some examples. A. . In economics, a deadweight loss (also known as excess burden or allocative inefficiency) is a loss of economic efficiency that can occur when equilibrium Read More …

Q.b) Differentiate the functions of commercial banks and central bank. (10 marks) (10 marks, 2011 Q7b) A. A central bank is a banker’s bank. It is normally part of or Read More …

Q.Explain the following terms: d) Consumer Price Index (4 marks) (4 marks, 2011 Q8) What is consumer price index (CPI), and what are the purposes of having CPI? A.A consumer price Read More …

Q.Explain the following terms:- e) Balance of Payment. (4 marks) (4 marks, 2011 Q8e) What do you understand by “Balance of Payment”? A. Balance of Payment (BoP) of a country is Read More …

Q.Explain the following terms:- a) Gross Domestic Productb) Direct Taxc) Indirect Taxd) Consumer Price Indexe) Balance of Payment (20 marks, 2011 Q8) What are direct and indirect taxes?  List out Read More …

Q.How to measure National Income? What are the common measurements of National Income? A.National income is the total income of a nation. It can be interpreted as Output, Expenditure or Read More …

Q.Discuss the problems encountered in calculating the National Income. A. The main difficulties which are involved in the measurement of national income are following:  In the fewer developing countries, the accurate figures about the various sectors of economy Read More …

Q.What are the uses of National Income figures? A.Uses of National Income Statistics:- 1:National Income as a measure of economic growth – Estimates of national income at constant prices indicate Read More …