QUESTION 1
Critically discuss four assumptions that underlie the Theory of Perfect Competition.
(25 marks)
QUESTION 2
Companies that operate in competitive markets typically invest in advertising and/or celebrity
endorsement to secure or grow sales and market share.
Describe the economic rationale for investing in this way. Include in your answer a description of what
impact advertising or celebrity endorsement can have on the demand curve for a given product,
referencing factors of demand, price elasticity and total revenue.
(25 marks)
QUESTION 3
Brexit is likely to have an economic impact on the United Kingdom and on the European Union,
including Ireland.
Evaluate how Brexit is likely to impact on the following different sectors and suggest how they might
respond to offset the risk:
(i) The UK financial services industry.
(ii) The Irish financial services industry.
(ii) Non-financial services sectors of the Irish economy, including agriculture and food production.
(25 marks)
QUESTION 4
Answer both (a) and (b)
Fiscal policy is one of a small number of ways in which Governments can help to shape the economy
and effect economic growth.
(a) Analyse the differences between expansionary fiscal policy and contractionary fiscal policy.
(10 marks)
(b) Identify how government may use these policies and describe potential negative effects.
(15 marks)
Total (25 marks)
QUESTION 5
Define “cartel” and assess any four problems inherent in forming and maintaining a cartel.