hi, im an AS level economics student and i need some help with some work that i was given over Christmas, we haven't really gone over these questions in class and i was hoping you guys could help me out
Q1: if a monopoly exists in a particular industry, any benefit for consumers is most likely to arise from:
A) excess profits
B)barriers of entry
C) diseconomies of scale
D)none of the above
Q2: the the government of a country which is a major tourist destination has proposed a subsidy to hotel owners of £1.00 per tourist for every night spent in hotel accommodation. the government would be most likely to justify this in terms of:
A) the external benefits of tourism
B)the external costs of tourism
C) the private costs of tourism
D)the private ciosts of tourism
thanks for you help i really appreciate it
need help with a few economics questions Watch
- Thread Starter
- 19-12-2010 14:57
- 19-12-2010 15:02
edit: Negged? its the right answer! cowardLast edited by lazy smurf; 19-12-2010 at 19:03.
- 19-12-2010 19:26
Not that I negged you. Just an explanation of why someone may have done it. And I agree with your answers.
1. a) How do consumers benefit from excess profits? They don't (directly, I guess you could argue that the profits might be used for innovation and so the consumers get better quality products, but that is far fetched for this simple question)
b) Barriers means less competition. We know competition benefits consumers
c) The more production the less efficient? How would this benefit consumers?
2. Tourists spend money in the hotels. But they spend money on other things as well and this benefits the economy of the country.