What is meant by market equilibrium

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Reference no: EM132361699

Business Economics Questions -

Q1. What is meant by market equilibrium and how might a market equilibrium change.

Q2. Explain and illustrate the difference between an effective price floor and an effective price ceiling.

Q3. Explain the relations between the marginal cost, average total cost and average variable cost curves. Use a diagram to illustrate your answer.

Q4. Why might marketing expenditure be important to a firm that operates in an industry that is characterised by monopolistic competition but unimportant to a firm that operates in a perfectly competitive industry?

Q5. Explain why governments may want to set the price charged by natural monopolies at the level where the demand curve cuts the average total cost curve.

Q6. Employ the aggregate demand and supply model for the Australian economy, to analyse the consequences for real GDP and the general price level of the following scenarios. Confine your analysis to the short-run. In your response clearly state your assumptions and illustrate your answers with diagrams.

(a) the price of iron ore, a major export product, increases substantially,

(b) a favourable set of weather conditions leads to a substantial rise in Australian agricultural output,

Q7. How can government's act to reduce unemployment through monetary or fiscal policy? Why might such action be considered a bad idea?

Q8. Why might borrowing overseas at interest rates lower than domestic interest rates to fund your investment expenditure be a risky strategy?

Reference no: EM132361699

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