A2 Economics 2884 essay questions
Jan 2002
2
3
TV broadcasting used to be regarded as a clear example of an oligopoly, but recent developments
in broadcasting technology have made the market very much more contestable.
(a)
Explain the behaviour of firms in an oligopolistic market.
[10]
(b)
Discuss the likely implications for firms and consumers of the recent developments in
broadcasting technology.
[15]
Despite the declared aims of many UK governments to reduce inequalities of both income and
wealth, evidence suggests that the gap between rich and poor remains wide.
(a)
Explain the main causes of inequality in the UK.
[10]
(b)
Discuss the view that government policies have been unsuccessful in narrowing the gap
between rich and poor in the UK.
[15]
4 Computer specialists are currently in great demand and, as a result, are enjoying high earnings. In the long run, however, they are
likely to find that their earnings differential over other occupations will decrease.
(a)
(b)
Explain the main factors which might determine the elasticity of supply of labour to an
occupation such as computer specialists.
[10]
Discuss the extent to which differences in labour supply elasticities can be used to explain the
differences in earnings between occupations.
[15]
June 2002
2
(a) Using appropriate examples, explain why labour markets fail.
[10]
(b) Discuss the view that the best way for a government to minimise the effects of labour market failure is to concentrate its
efforts on improving the provision of appropriate information.
[15]
3
The existence of many small high street travel agents, each working well below capacity, is a sign of inefficiency.
(a)
(b)
4
Using diagrams, explain the short- and long-run equilibrium positions of a firm in monopolistic
competition.
[10]
Discuss the view that greater efficiency would result if the travel agent industry showed more
characteristics of monopoly.
[15]
(a) Explain the factors which determine the marginal revenue product of labour.
(b) Discuss the extent to which marginal revenue product is the crucial factor in explaining why
top soccer players earn so much more than waiters and waitresses.
[10]
[15]
June 2003
2 Many workers in the UK, such as nurses and health-care attendants, are generally thought to be under-paid compared with the
value of the services they provide for society.
3
(a)
Explain why such workers receive relatively low earnings.
[10]
(b)
Discuss the view that such workers are unlikely ever to improve their relative earnings unless
they form effective trade unions.
[15]
(a) Identify the characteristics of a contestable market, and explain how contestability can lead to
benefits for consumers.
(b)
4
Discuss the extent to which markets for spectator sports are economically contestable in
terms of their characteristics and their consequences.
[15]
(a) Explain how direct and indirect taxes affect the distribution of income.
(b)
[10]
[10]
Discuss the view that a government wishing to reduce inequality should concentrate its policy
efforts solely on making taxes more progressive.
[15]
June 2004
2
3
4
(a) Explain the difference in the way that prices are determined in perfect competition and in
monopoly.
[10]
(b) In a leisure industry of your choice, discuss the way in which its market structure affects the
ability of firms to set prices and to make profits.
[15]
(a) Explain why, in a perfectly competitive labour market, the total net advantages of all
occupations would be equalised in the long run.
[10]
(b) Discuss why the net advantages of teachers are persistently greater than those of shop
assistants.
[15]
(a) Explain how the activities of a trade union may cause labour market failure.
(b)
[10]
Discuss the view that, in order to improve the competitiveness of the UK economy by
reducing its unit labour costs, the government should attempt to reduce further the effective
power of trade unions.
[1 5]
June 2005
2
(a) Explain how provisions of the EU Social Charter affect the supply of labour in the UK.
[10]
(b) Discuss the view that full implementation of the EU Social Charter would make the UK labour
market too inflexible.
3
4
[15]
So-called 'fat cat pay' for some top executives is inevitable in a market economy; all workers have to be paid the rate for the job.
(a)
Explain the factors underlying the determination of relative wages in a market economy.
[10]
(b)
Discuss the view that any government attempt to interfere in the process of wage
determination is bound to create more problems than it solves.
[15]
(a) Explain the main features of the behaviour of firms which operate in an oligopolistic market.
(b) Discuss the extent to which firms in the UK TV broadcasting industry behave as oligopolists.
June 2006
2
3
4
(a) Explain how a profit-maximising employer will choose the quantity of labour employed.
[10]
(b) For an occupation of your choice, discuss the extent to which its average rate of pay is
determined by demand from employers.
[15]
(a) Explain why firms operating under conditions of monopolistic competition are less efficient
than those in perfect competition.
[10]
(b) Discuss the view that the emergence of low-cost airlines in the UK in recent years has made
the market for air travel more efficient.
[15]
Inequality of wealth is a major cause of inequality of income. It follows that the UK government, if it wishes to achieve a
significant reduction in income inequality, should introduce a wealth tax.
(a)
Explain how inequality of income and inequality of wealth are inter-related.
[10]
(b)
Discuss the view that taxation aimed at reducing inequality of wealth is the best way for a UK
government to reduce inequality of income.
[15]
Jan 2007
2
3
4
(a) Explain, with examples, the meaning of contestability in a market.
[10]
(b) With reference to one leisure market of your choice, discuss the extent to which lack of
contestability enables excessive profit to be made.
[15]
(a) Explain the economic functions performed by wage differentials in a market economy.
[10]
(b) Discuss the view that government policies aimed at reducing wage differentials always do
more harm than good.
[15]
(a) Explain how the extent of inequality can be compared between two nations such as the UK
and France.
[10]
(b) Discuss how a government can best tackle the problem of regional income inequality.
[15]
June 2007
2
(a) Explain how the extent of poverty in an advanced industrial economy such as the UK can be measured
[10]
(b) Discuss the relative effectiveness of two different policies which could be used to reduce poverty in the UK [15]
3
(a) Using two contrasting occupations of your choice, explain what is meant by the ‘net advantages of an occupation [10]
(b) Occupations which seem to offer many attractions sometimes pay much higher wages than others which seem less
attractive. Discuss possible reasons for this.
[15]
4(a) Explain why both the short-run and the long-run supply of labour to an occupation are likely to rise with the hourly wage rate
[10]
(b) Discuss the possible ways in which a government might attempt to increase the supply of labour to an occupation such as
nursing in which there is thought to be a shortage.
[15]
January 2008
June 2008
January 2009
l;
Jume 2009
2 (a) Explain why the elasticity of supply of labour varies between occupations. [10]
(b) Discuss the extent to which wage differentials are a result of differences in elasticity of supply.
[15]
3 (a) Explain the differences which exist between the short- and long-run levels of equilibrium price
and output for firms which operate under conditions of monopolistic competition. [10]
(b) Discuss the extent to which the level of profit is determined by the degree of contestability in
different leisure markets. [15]
4 (a) With the use of examples, explain what is meant by labour market failure. [10]
(b) Discuss the view that government attempts to intervene in the labour market to try to correct
market failure are likely to cause more problems than they solve. [15]
January 2010: