Question1. What do you understand by the term equilibrium National Income and to what extent is economic growth advantageous to economy?
Question2. Describe using both diagrams and mathematical tools, why a 20% raise in investment leads to a higher percentage increase in National Income?
Question3. The best way to allocate scarce resources is by treating consumers as “kings”. Explain.
Question4. Make a distinction between public and merit goods and describe using concrete examples, why the provision of both kinds of goods, needs government intervention.
Question5. How would the strategy of firm faced with repeated games diverge from that faced with sequential games?
Question6. What do you understand by the term optimal level of pollution and critically explain the different ways of internalising external costs.
Question7. The manager of clothing and Textile Company in Mauritius, which produces for both the domestic market and foreign markets, is considering increasing its scale of operation and decides to forecast its sales for the following six months. Outline two methods of forecasting which you would suggest to the manager and comment on your rationale.
Question8. Explain the numerous kinds of inefficiencies caused by the public sector.