economics paper1 Flashcards
(7 cards)
1
Q
A
2
Q
Ways to reduce inequalities
A
-Progressive taxation
-rent caps
-trade liberalisation
-reduced VAT
-investment
3
Q
The taxation argument
A
analysis
(Republic of Ireland)
Less tax = higher profits = more re-investment =
greater technical economies of scale = dynamic pricing = lower prices
Evaluation
May not re-invest = no technical economies of scale = no lower prices+
less government revenue = opportunity cost
4
Q
A
5
Q
How to increase LRAS
A
-Investment in infrastructure
-subsidies
6
Q
What are the 6 economies of scale?
A
I - Innovation
F - Financial
R - Risk bearing
A - Advertising
M - Managerial
P - Purchasing
7
Q
satisficing reason
A
-appeases workers
-appeases customers
-appeases shareholders
-appeases government
-principle agent problem
-bounded rationality
-reputational benefits
