Oct 2021 As Paper 1

Question 1

Capital goods

Answer 1

Capitals goods are many made aids to goods used in the production of other goods for example machinery

Question 2

Consumer goods

Answer 2

Consumer goods sold to individuals to satisfy their wants and needs

Question 3

Public goods

Answer 3

public goods are non excludable and non rival

Question 4

5 Reason why government provide public goods

Answer 4

• Free rider problem: consumer would use public goods without paying
• Providing public goods would not generate revenue therefore it is unlikely that firms will generate profit from providing the goods
• Non excludability make people can benefit from it without paying for their provision or upkeep
• Due to non rivalry one person benefiting does not reduce the benefit for others so if one person was to put goods in place everyone would benefit from it
• Public goods would not be provided by the private sector as private sector would have no profit incentive to provide public goods

Question 5

Complementary goods

Answer 5

• Goods that are consumed together
• when the price of one increases, the demand for the other decrease
• Negative XED value below 0

Question 6

Price Inelastic Supply

Answer 6

• where a change in price results in a less than proportionate change in quantity supplied
• PES between 0 and 1
• Supply cannot respond quickly to a change in price

Question 7

Producer Surplus

Answer 7

difference between the price firms are willing to sell at and the market price

Question 8

Some evaluation to producer surplus

Answer 8

idk