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(a) Explain what is meant by monopoly and, using a diagram, explain why a monopoly may have lower average costs of production than a firm in perfect competition. [10]

· Definition and examples of different types of monopoly.I.e. pure, natural, and local monopolies.High barriers to entry&exit / price-makers.· Definition of perfect competition.Many buyers and sellers / ...
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Answered by Ethan S. • Economics tutor
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Explain the likely effects on the circular flow of income of the change in unemployment between 2013 and 2015.

(Context - a graph is provided showing unemployment falling by around 3%).As unemployment fell by 3% between 2013 and 2015, there will be an increase in money in the circular flow of income as more people ar...
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Answered by Sanjay S. • Economics tutor
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Why is the long-run Phillips Curve vertical?

The Phillips Curve depicts the relationship between unemployment and inflation. Suppose the government pursues an expansionary policy (e.g. lower interest rates). Using the classical model of aggregate deman...
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Answered by Fin C. • Economics tutor
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Discuss the possible reasons for the introduction of higher tariffs from the US on products imported from China [15]

Firstly, it’s important to look at the breakdown of a 15-mark question – 3 Knowledge, 3 Application, 3 analysis and 6 evaluation marks. This will act as a guide to ensure you achieve the maximum number of ma...
Answered by • Economics tutor
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An economy has 3 leakages from the circular flow. The marginal propensity to save = 0.17, the marginal propensity to import = 0.23 and the marginal tax rate = 0.4. The government rises spending by £300 million, what is the final change in national income?

Multiplier = 1/sum of leakages = 1/(0.17+0.23+0.4)= 1/0.8 = 1.25Government increases spending by £300 million. Therefore, the change in national income = 1.25 x £300 = £375 million
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Answered by Dylan T. • Economics tutor
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