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Question 1:
(a) What are the characteristics of market and command economies?
(b) In a number of countries in recent years, there has been a movement towards a greater reliance on the market system. Assess to what extent this trend is beneficial for an economy.
(c) Using suitable examples, differentiate between public and merit goods.
(d) Describe, with the help of relevant examples, the relationship between private, external and social cost.
Question 2:
(a) Discuss whether international trade between countries is always beneficial.
(b) What are the economic reasons for protectionism?
(c) Does the National Income figure accurately reflect the living standard of a population?
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Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts
In the long-run framework, deficits reduce: A. investment. B. taxes. C. government consumption. D. subsidies.
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