ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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external cost and private enterprise
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free market and the conservation of resources
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opportunity cost and improved standards of living
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public sector and external benefit
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Detailed explanation-1: -What benefit is likely to result from the extension of specialisation within manufacturing? For a consumer, there are more individually made goods available. For a consumer, there could be a lower cost of living. For an employee, job satisfaction will increase.
Detailed explanation-2: -The law of increasing opportunity cost holds that as an economy moves along its production possibilities curve in the direction of producing more of a particular good, the opportunity cost of additional units of that good will increase.
Detailed explanation-3: -Lower unemployment will reduce government borrowing and help economic growth. If the unemployed gain work, they will increase spending, and this will cause a positive multiplier effect which helps to increase economic growth.
Detailed explanation-4: -A growing population increases total demand (1) this will encourage firms to increase their output (1) may attract MNCs to set up in the country (1). A higher population may make better use of resources (1) allow firms to take advantage of economies of scale (1).