Ocr A Level Economics H460/02 June 2023 Question Paper: Macroeconomics

why does a demand curve slope downwards {Ans: the law of diminishing marginal utility}advantages of international trade {Ans: imports and exports allow more countries to access a wider range of goods and production techniques}supernormal profits {Ans: profits above the level required to keep a firm in an industry}dynamic efficiency {Ans: productive efficiency over a long period of time}protectionism {Ans: the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.}ped = 1 {Ans: unitary - demand for an item will change proportionately to a change in price}disadvantages of buffer stocks {Ans: -if minimum price is set too high, government will spend excessively -a run of good or bad harvests leads to excessive spending or running out of stock -storage and security are expensive -some goods cannot be stockpiled (perishables) -producers may take advantage and overproduce to get a guaranteed price from the government}demand pull inflation {Ans: a sustained rise in the price level due to a rightward shift of the aggregate demand curve}cons of free market {Ans: -those who cannot work receive no income -unprofitable goods such as drugs would not be made -monopolies}marginal productivity theory