DECEMBER 2015
ECONOMICS FOR BUSINESS
Instructions to candidates:
a)
Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything
during this time)
b)
Answer any FIVE questions
c)
All questions carry equal marks. Marks for each question are shown in [ ]
1.
2.
‘The fundamental economic problem is best solved by a mixed economy.’ Discuss this statement
indicating the main characteristics of the mixed economy.
a)
b)
[20]
Using a diagram, discuss the relationship between the price of a product and the quantity supplied
when all other factors that affect supply are held constant.
[8]
State and explain THREE factors other than price that might affect the supply of a product such
as a laptop computer.
[12]
3.
a)
b)
Define and explain the market structure known as monopoly.
Discuss, with business examples, how barriers to market entry may lead to monopoly power.
[8]
[12]
4.
a)
b)
Explain, with examples, the term market failure.
Discuss how a government might deal with the problem of market failure.
[10]
[10]
5.
a)
b)
Using an appropriate diagram, discuss the FOUR phases of the business cycle.
Outline the main causes of business cycles in a developed economy.
[12]
[8]
6.
a)
b)
Outline the main economic problems associated with inflation.
State and evaluate the main causes of inflation.
[10]
[10]
7.
a)
b)
Outline the principal instruments of monetary policy.
Discuss what is meant by expansionary monetary policy and outline under what economic
circumstances the Government of a country might use it.
[10]
What are the main features of a multinational global enterprise?
Discuss why a developing nation may benefit from global multinational activity.
[10]
[10]
8.
a)
b)
© INSTITUTE OF COMMERCIAL MANAGEMENT
[10]