2015 - WAEC Economics Past Questions and Answers - page 3

Monopoly can be prevented through the following ways

1. By regulation through taxation.; The Govt. can regulate monopoly through taxation. Govt. can levy a tax per unit of output (Specific Tax) or impose a lump sum tax irrespective to its output.

2. By regulation of conditions of monopoly, as in case of natural and regulated monopolies (MC pricing).; The term “public utilities” is applied to such essential services such as water supply, power supply, passenger transport facilities, communication facilities and railway facility. These services should be made available to the society at reasonable prices. Most public utility firms are natural monopolies and are also called as regulated monopolies.

3. By anti-monopoly laws and policies to prevent unfair price discrimination amongst different consumers (Peak load pricing); This is a case of price discrimination peak and off-peak supplies at different prices. Some examples are, electricity has different demand curves at different times during the day. When demand is more, it is called peak period, when less the off-peak period. Hotels at hill stations have peak period in summer and off-peak period in monsoon. Demand for woolens is more in winter (peak period) and less in summer (off- peak period). The traffic rush on roads is more after office hours.

A private limited company is a business entity that is held by private owners. However, private limited companies do not need to issue a prospectus because the public is not invited to subscribe for the shares of the company. A private limited company needs a minimum of only 2 directors.  private company, the number of shares traded is relatively smaller and also the traded shares are owned by limited individuals.

On the other hand, the shareholders in a public limited company are the public. A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors candetermine the true worth of its stock (shares). Also called publicly held company.

excessive demand with limited supply;  it causes rise in prices and increases in equalities: Generally, excess demand results in inflation (continuous rise in prices) without increase in output and employment. people will be will to pay high prices for few goods. which is generally what in flation is about. a fall in the purchasing power of money as more money will be chasing few goods

Frictional unemployment is a type of unemployment that arises when workers are searching for new jobs or are transitioning from one job to another

Frictional unemployment refers to people who are simply moving from one job to another, but are taking their time. It is part of the jobless total caused by individuals who are spending time searching for another job, or perhaps are taking a break before beginning with a new employer. Even in a country where there is technically full employment, there will always be some frictional employment, simply because employees change jobs occasionally.

Factors that can shift the demand curve for labor include: a change in the quantity demanded of the product that the labor produces; a change in the production process that uses more or less labor; and a change in government policy thataffects the quantity of labor that firms wish to hire at a given wage. When the payment for labour is low, fills will be willing to employ more people than with an increased wage rate

When a worker of a lower grade and status in an occupation moves to another occupation in a higher grade and status, it is vertical mobility. Just as a school lecturer becomes a college lecturer, a clerk becomes a manager, etc.

The most important distinguishing point between these two is that while we calculate GDP, we take into consideration whatever is produced within the local borders of the country and so it includes the goods and services produced by the foreign nationals also but if we talk about GNP, only the production done by the country’s citizens is considered whether they are inside or outside the country and the contribution of foreign citizens are completely excluded.

Net income from abroad is income earned by ANY person {including Artificial} i.e citizen of that country, earned even outside political boundaries i.e land + 20 nautical miles of water. This is GNP. Income earned by anyone {including foreign citizen} within the country is GDP.

Industrial locations are complex in nature. These are influenced by the availabilityof many factors. Some of them are: raw material, land, water, labor, capital, power, transport, and market. For ease of convenience, we can classify the location factors into two: geographical factors and non-geographical factors.