Tag: online international economics help

International Economics

QUESTION 1
Answer both (a) and (b)
(a) Suppose for health reasons a tax is placed on cigarette consumption with the sole objective of
reducing the demand for cigarettes.
The tobacco industry objects to the tax and argues that, since the price elasticity of demand for
cigarettes is very low, the only impact of the tax will be an increase in government revenue.
Using demand and supply diagrams, present the tobacco industry’s argument and suggest other
measures the government could use to achieve its objective.

(15 marks)
(b) Imagine you are the new owner of a bus company that is struggling to survive. You have access
to the following information about the elasticities of demand for bus travel:

Income elasticity = -0.4
Own-price elasticity = -1.2
Cross-price elasticity with respect to rail fares = +2.1

Briefly explain the meaning of each of these terms and discuss how this information could
influence your business decisions.

(10 marks)
Total (25 marks)

QUESTION 2
Answer both (a) and (b)
(a) Why is it necessary to have competition legislation?

(15 marks)
(b) Discuss the main factors which prevent market forces from eroding the market power of
monopolies and oligopolies.

(10 marks)
Total (25 marks)

QUESTION 3
What is meant by the term ‘The gig economy’?
Analyse the main advantages and disadvantages to firms and workers of the gig economy.

(25 marks)

QUESTION 4
Monetary and fiscal policies are often used by governments to achieve their objectives. Drawing on your
knowledge of these policies, evaluate their effectiveness in achieving economic growth.

(25 marks)

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QUESTION 5
Critically evaluate Ireland’s membership of the European Union under each of the following headings:
(a) Foreign direct investment
(b) International trade
(c) Growth and immigration

INTERNATIONAL BUSINESS

QUESTION 1
The nature of competition and the behavior of firms differs depending on the structure of the market
within which firms operate.
Evaluate the difference between the Monopolistic Competition and Oligopoly market structures and
describe the defining features of each.

(25 marks)

QUESTION 2
The Irish economy is small, open and highly globalized.
Outline the economic advantages for Ireland of membership in the European Union and the opportunities
and challenges of globalization. In particular, explain the impact of immigration on the supply and
demand for labour, on wages and on economic growth.

(25 marks)

QUESTION 3
Monetary policy is one of a small number of ways in which Governments and/or Central Banks can help
to shape the economy and effect economic growth.
Explain clearly the differences between expansionary monetary policy and contractionary monetary
policy and suggest why a government might use these policies.
Use an example to illustrate your answer and address any negative consequences that may result.
(25 marks)

QUESTION 4
Answer both (a) and (b)
(a) Identify and discuss the main options available to a corporation when it needs to raise money so
that it can invest in a new product or a new manufacturing technique.

(10 marks)
(b) Explain the difference between a corporate bond and a government bond, including the level of
risk and interest rate.

(15 marks)
Total (25 marks)

QUESTION 5
Define price discrimination. Describe in detail three conditions must exist before a firm can use it
successfully?