Explain the concepts of scarcity and opportunity cost, Business Economics

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QUESTION

(a) Using diagrams where appropriate, explain the concepts of scarcity, choice and opportunity cost.

(b) Distinguish between positive and negative externalities, illustrating your arguments with appropriate examples where necessary.

(c) Define the concept of economies of scale and discuss the different sources of economies of scale.

(d) Using demand and supply analysis, explain the influence of the imposition of a maximum price and a minimum price on a product on price and quantity.


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