problem 1: The basic economic problem is best solved by a social market economy. Describe this statement pointing out the main characteristics of the social market economy.
a) Outline the major factors, other than price, that influence the demand for a product.
b) Describe the concepts of the given, pointing out how each is measured:
• Price elasticity of demand.
• Price elasticity of supply.
a) Define with illustrations fixed costs and variable costs.
b) By using a diagram describe how the short run average cost curve is derived from the average fixed cost and average variable cost.
problem 4: Describe why the allocation of resources in a perfectly competitive market might be more proficient than in a monopoly market.
a) By using a suitable diagram describe the four stages of the business cycle.
b) Outline the major causes of business cycles in a developed economy.
a) Differentiate with instances between direct and indirect taxes.
b) What do you understand by the term budget deficit?
a) Outline the major effects on the economy of a period of high inflation.
b) Describe ways in which a government might seek to decrease the rate of inflation.
a) Outline the main parts of the balance of payments on current account.
b) Describe the effects of changing exchange rates on business.