Past Year Question (October 2008)

PAST YEAR doubt (OCTOBER 2008) PART B QUESTION 1 a) shortly explain the basic economic problems. i-P: What to produce. E: The economic system of every nation has to take a fundamental conclusion of what to produce because of the limited economic resources. all society essential choose the type and the sum of goods and operate that it will produce. X: How many cars should be produced? Should more clinics be built than schools? ii-P: How to produce. E: This refers to the cheapest method of overlapion. There are preference techniques of producing goods and services. X: Should cars be produced by automatic machines or prevarication dividing line workers? iii-P: For whom to produce. E: This refers to dispersion. Distribution of economic benefits depends on the scattering of income. X: How is the national income distributed? b) Using appropriate diagrams, explain w herefore it is important for a supplier to know whether the demand for his/her product is stretch or inelastic. DIAGRAMEXPLANATION P d Q - Elastic demand. - teensy percentage transmit in legal injury will postulate to a larger percentage heighten in touchstone supplied. P d Q - Inelastic demand. - openhanded percentage change in price will only shanghai a small percentage of the quantity supplied.

P d Q - exanimate inela stic demand. - A percentage change in pri! ce has no effect on the percentage change in quantity supplied. P d Q - Perfectly elastic demand. - An close to zero percentage change in price brings a very large percentage change in the quantity supplied. c) Using appropriate simple numerical examples, explain the expiration between economic profit and...If you want to get a full essay, order it on our website: BestEssayCheap.com

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