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Micro-economic concepts · Part 3 of 3
6 exam-style questions with model answers, plus 8 quick multi-choice questions — every question on this part of the standard, grouped by the 2 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
State the characteristics of monopolistic competition and give a New Zealand example.
Using the kinked demand curve model, explain in detail why prices in an oligopoly tend to be sticky.
A person is deciding whether to open a new café in a suburb that already has fifteen of them.
Using evidence about market structure and a model, justify the implications of monopolistic competition for this producer's decision.
Explain the roles of prices and profits in allocating resources in a market economy.
Consumer demand for a food product increases sharply.
Explain in detail how prices and profits reallocate resources into that industry, and what happens to the price in the long run.
A government is considering whether to intervene in a market where prices have risen sharply.
Using evidence and a model, justify the implications of the role of prices and profits in resource allocation for the government's decision.