The fundamental economic problem is one of ‘scarcity’. Explain this concept
Define the ‘Marginal Efficiency of Capital’ (MEC).
Outline two possible reasons for a fall in MEC
Read each statement below and indicate if the price elasticity of demand (PED) for the product is most
likely to be elastic or inelastic.
Consumers are strongly attached and loyal to the product.
Many close substitutes are available for the product.
The product is a luxury product.
The product accounts for only a small fraction of a consumer’s weekly
Collusion may be a feature of an oligopolistic market. Explain what is meant by ‘collusion’
Collusive practices may be undermined by price wars. Outline two benefits of price wars for the
Outline three mechanisms for restricting free trade.
Explain what is meant by the economic term ‘Paradox of Thrift’
Outline four contributions of Adam Smith to economic thought.
Define the term 'Average Propensity to Consume' (APC)
A recent report to the Irish government highlighted the growing issue of alcohol abuse in Ireland.
(a) Outline one private cost
and one social cost related to excessive alcohol consumption.
Describe one advantage of the government imposing a
minimum price on alcohol products