Economics for managers
Answer ONE of the following (max 1500 words):
choose either question 1 or 2
1. Compare and contrast the equilibrium and efficiency implications of competitive markets and those markets where government intervenes. What justification therefore can be made for the use of taxes and subsidies and what are the implications of these policy instruments for market efficiency?
2. i) Distinguish between ‘shut down’ and industry exit by firms and explain the circumstances determining each case. (60marks)
ii) Outline the specific impact of highly capital-intensive technology on the shut down and exit decisions. (40 marks)
