Karteikarten
Leaving Cert Economics 2013
Karten in diesem Stapel (18)
- 1The fundamental economic problem is one of ‘scarcity’. Explain this conceptScarcity means that while the supply of resources / factors of production are limited
the demand for these is unlimited (unlimited wants/limited resources). Hence, society must choose on the use to which the resources are put. Making choices involves an opportunity cost. - 2Define the ‘Marginal Efficiency of Capital’ (MEC).It is the extra profit earned as result of employing one extra unit of capital.
- 3Outline two possible reasons for a fall in MEC1. An increase in interest rates.
2. An increase in the cost of capital goods.
3. A decrease in the price of the finished goods.
4. A decrease in the productivity of capital / deterioration in the capital goods used. - 4Read each statement below and indicate if the price elasticity of demand (PED) for the product is most likely to be elastic or inelastic.(Next Card)
- 5Consumers are strongly attached and loyal to the product.Inelastic
- 6Many close substitutes are available for the product.Elastic
- 7The product is a luxury product.Elastic
- 8The product accounts for only a small fraction of a consumer’s weekly expenditure.Inelastic
- 9Collusion may be a feature of an oligopolistic market. Explain what is meant by ‘collusion’Rival sellers in the industry come together for their mutual benefit.
- 10Collusive practices may be undermined by price wars. Outline two benefits of price wars for the consumer.1. Lower prices / value for money
a. Consumers will benefit from the availability of commodities at lower prices.
b. Consumers will be able to get better value for their limited income.
2. Higher disposable income
With lower prices consumers will now have a higher disposable income resulting in a better
standard of living.
3. More choice
As consumers now have a greater disposable income they can choose how to spend this
additional income. - 11Outline three mechanisms for restricting free trade.Tariff - A tax on imports.
Quota - A limit on the quantity of goods imported.
Embargo - A total ban on imports.
Subsidy - A payment to exporters to reduce production costs.
Administrative barriers - Rules / regulations applying to imports.
Exchange controls - Limit the amount of foreign currency available to importers to
buy imported goods. - 12Explain what is meant by the economic term ‘Paradox of Thrift’An increase in savings by individuals could result in a fall in national / total savings
due to reduced consumption, reduced demand, falling incomes, job losses and so total
savings will fall. Increased savings represent a diminishing circular flow of income. - 13Outline four contributions of Adam Smith to economic thought.(a) The pursuit of self -interest
This best benefits the individual and hence best benefits society.
(b) The Division of Labour
Increased productivity and increased country’s wealth.
(c) Labour Theory of Value
The value of a product was equal to the amount of labour that went into producing the product.
(d) State protection of property rights
Encourages the accumulation of personal wealth.
(e) 'Invisible hand of competition'
Allows a self-regulating market to operate thus ensuring economic progress is achieved.
(f) Perfect Competition
Free entry into markets; profits sufficient to reward entrepreneurs; inefficiency penalised and
price based on the cost of production. Monopolies would not persist. - 14Define the term 'Average Propensity to Consume' (APC)The proportion / fraction of total income which is spent on goods and services.
- 15A recent report to the Irish government highlighted the growing issue of alcohol abuse in Ireland. (a) Outline one private cost1. Decreased disposable income.
2. Possibility of long term illness /
deterioration in health.
3. Possible absenteeism from work / less
opportunities for promotion.
4. Increased private insurance costs.
5. Decreased productivity in work. - 16and one social cost related to excessive alcohol consumption.1. Increased health care costs.
2. Possible increase in crime /vandalism / risk
of road accidents.
3. Increased absenteeism from work /
disruption to provision of service.
4. Opportunity cost of money spent on health
care. - 17Describe one advantage of the government imposing a minimum price on alcohol products1. Reduction in alcohol consumption.
2. Possible reduction in ‘binge’ drinking by
younger consumers.
3. Reduction in admission to A&E so lower
healthcare costs.
4. Better use of scarce resources in hospitals.
5. Reduction in crime / vandalism / road
accidents.
6. May close the gap in price between pubs
and supermarkets – boost for pub trade. - 18one disadvantage1. Increased prices for consumers / reduced
disposable income.
2. Reduced competition on the market /
restricted consumer choice.
3. Possible increase in cross border shopping
for alcohol.
4. Pub closures with possible job losses.
5. Increase in smuggling/purchase of alcohol
products in the black economy.
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- Short Questions from the 2013 Leaving Certificate Economics Higher Level Exam.
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