Introduction: Part (a) in each of the questions below is accompanied by a video to help provide background for the answer. The part (b)’s were written by my own year 2 students, and the answers are their own.


  1. How can a system of price controls be used to assure farmers stable prices for their crops? Video link: 
  2. Evaluate the view that governments should control the price of market goods: Answer

  1. Evaluate the view that the government should have no role whatsoever in the provision of health care and education. Video link: 

  1. If you were employed as an economist by a business, explain why a knowledge of the price elasticity of demand of your product would be useful. Video link: 
  2. PED is the most important factor to consider for a business owner. Discuss Answer

Theory of the Firm:

  1. Explain the relationship in the short run between the marginal costs of a firm and its average total costs. Video link: C, D
  2. Evaluate the effect of communication technology on a firm experiencing the law of diminishing marginal returns. Answer

  1. Using appropriate diagrams, explain the difference between the law of diminishing returns and economies of scale. Video links: and
  2. Evaluate the view that “bigger is always better.” Answer

  1. Under what conditions is price discrimination possible and profitable? Illustrate your answer with examples. Video link:
  2. Evaluate the claim that monopolies are always unfavorable for consumers. ANSWER

  1. Explain how profit is determined in perfect competition. Video link:
  2. Evaluate the claim that perfectly competitive markets are the most desirable for society. Answer


  1. Distinguish between two different means of measuring the total level of economic activity in a nation. Video link:
  2. GDP is the most important measurement of a nation's well being. Discuss.Link

  1. Use an aggregate demand/aggregate supply diagram to analyse the likely effects of an increase in income tax. Video link:
  2. “A progressive income tax does more harm than good to a nation.“ Discuss.

  1. Explain two policies that a government might use to deal with the problem of demand-deficient (cyclical) unemployment. Video link: 
  2. Evaluate the effectiveness of relying on a demand-side policy to reduce unemployment rate Answer

  1. Identify the components of aggregate demand and briefly explain two factors which might determine each of these components. Video link: 

  1. Use the Phillips Curve to explain the concept of the natural rate of unemployment. Video links: and 
  2. Evaluate the view that a country’s natural rate of unemployment can never change.  Answer

  1. Examine two reasons why a government might wish to control increases in its expenditure. Video link:

  1. Why might an increase in government expenditure have a greater multiplier effect than a corresponding reduction in direct taxes? Video links: and
  2. Should a government attempt to manage the level of aggregate demand to influence unemployment and inflation rates? Answer

International Economics:

  1. What problems might a country face if it experiences a persistent deficit in the current account of its balance of payments? Video link: 
  2. When a country experiences a persistent deficit in the current account of its balance of payments, it is best for the government to turn to protectionist policies.” Discuss. Answer

  1. Explain the factors which cause the value of a currency to change under a floating exchange rate. Video link: C
  2. Explain three factors which might cause the value of a currency to depreciate and evaluate the possible effects of such an depreciation on an economy. Video link:

  1. Using an appropriate diagram, explain who gains and who loses from the introduction of a protectionist subsidy. Video link:

  1. Explain why a country’s balance of payments on current account may at times be in deficit and at other times be in surplus. Video link: 

More theory of the firm questions:

  1. Explain the differences between monopolistic competition and oligopoly as market structures. Video links:

  1. Discuss the differences between a collusive and a non-collusive oligopoly. Video link:

  1. A monopolist decides to maximize revenues rather than profits. Using a diagram, explain how price and quantity will change. Video link: 

  1. Using an appropriate diagram, explain why government regulation can increase the efficiency of naturally monopolistic industries such as electric utilities. Video link: