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Economics p3 post ur doubts here..:)

David Hussey

David Hussey

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angel404 said:
import substitution is the practice by certain countries of encouraging its citizens to substitute imports for local goods....or it means a govt trying to persuade its people to buy local goods instead of foreign goods.
so i think A is the answer.if citizens buy local goods,local industries would thrive,therefore it would export more,earning foreign exchange which could be used to import capital goods for economic growth.
Click to expand...
its C
 
David Hussey

David Hussey

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angel404

angel404

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Speed_Freak said:
http://papers.xtremepapers.com/CIE/Cambridge International A and AS Level/Economics (9708)/9708_w12_qp_32.pdf
can some please explain question five :(
Click to expand...
at any income level,any person would want to substitute leisure for work(substitution effect).so this substitution effect would make the person want to work more,so the person would work more for more income,hence positive substitution effect.he(assuming its male) also would like to stop working and enjoy his money with the little extra income he gets.(income effect).so this income effect would make him want to work less as he gets more money.so the income effect is negative,i.e,it make him want to reduce the number of hours worked.

at low income,sub effect is greater than inc effect as the person really needs the extra money,so would work more to earn more.so sub effect is greater than inc effect. at higher income levels, the person would rather like to work less as it is pointless to have so much money without having time to enjoy it.so inc effect is greater than sub effect.
 
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