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Question 2
Is fiscal policy more useful, less useful or equally useful compared to monetary policy to avoid the loss of confidence generating a recession? Discuss and compare how fiscal and monetary policy can be separately used in response to the dynamics caused by the loss of consumer confidence. (12 marks) aprox. 300 words
Question 3
(a)The cost of buying a new head office for a firm that sells oranges in a perfectly competitive market has increased by 2%. What will happen to the price of oranges and the profit maximising quantity of oranges as a result, and why? Aprox.300 (12 marks)
(b)Why might governments allow the creation of monopolies via patent protection, despite the other negative effects of monopolies? Provide a brief answer of up to a maximum of 100 words. (13 marks) aprox 300 words
Question 4
In class, we have seen that free exchange under perfect competition can mutually benefit both consumers and producers. In words, briefly explain how this is possible. Then clearly list five situations that free exchange can hurt consumers or producers and an assumption about perfect competition that situation violates. (10 marks) aprox 300 words
please use information from only the slides as it is an introductory course.
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