List TWO features that a closed economy will prohibit.

Economics
List TWO features that a closed economy will prohibit.

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Answer

Total: 2.1 [15 marks] + 2.2 [10 marks] = 25 marks

2.1 Table of goods, services, fixed and variable costs

Goods sold: pet food, pet accessories.
Services offered: delivery service.

Fixed costs remain constant regardless of sales volume. Examples: shop rent, insurance, fixed salaries.
Variable costs change with sales volume. Examples: cost of pet food/accessories, fuel for deliveries.

CategoryExamplesFixed/VariableGoodsPetfoodVariable(costofgoodssold)PetaccessoriesVariable(costofgoodssold)ServicesDeliveryserviceVariable(fuel,packaging)OthercostsShoprentFixedInsuranceFixedElectricityFixed(orsemi−variable)CostofgoodssoldVariableDeliveryfuelVariable\begin{array}{l|l|l} Category & Examples & Fixed/Variable \\ \hline Goods & Pet food & Variable (cost of goods sold) \\ & Pet accessories & Variable (cost of goods sold) \\ \hline Services & Delivery service & Variable (fuel, packaging) \\ \hline Other costs & Shop rent & Fixed \\ & Insurance & Fixed \\ & Electricity & Fixed (or semi-variable) \\ & Cost of goods sold & Variable \\ & Delivery fuel & Variable \\ \end{array}

2.2 Features of a sole trader

  1. Single ownership: Owned and controlled by one person who provides all the capital.

  2. Unlimited liability: The owner has unlimited liability, meaning personal assets are at risk if the business fails.

  3. All profits to owner: The owner keeps all profits after taxes.

  4. Full decision-making: The owner makes all business decisions without partners.

  5. No separate legal entity: The business and owner are not legally separate.

  6. Easy and inexpensive to start: Simple registration, low setup costs.

  7. Limited capital: Difficult to raise large amounts of capital as no shares can be sold.

  8. Personal skill dependent: Success relies on the owner's skills and effort.

**Total: 2.1 [15 marks] + 2.2 [10 marks] = 25 marks}

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Quick Answer
  1. 2.1 Table of goods, services, fixed and variable costs Goods sold: pet food, pet accessories.
  2. Services offered: delivery service.
  3. Fixed costs remain constant regardless of sales volume.
  4. Examples: shop rent, insurance, fixed salaries.
List TWO features that a closed economy will prohibit.
Economics

This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.

ScanSolve AI Answer
2.1 Table of goods, services, fixed and variable costs Goods sold: pet food, pet accessories. Services offered: delivery service. Fixed costs remain constant regardless of sales volume. Examples: shop rent, insurance, fixed salaries. Variable costs change with sales volume. Examples: cost of pet food/accessories, fuel for deliveries. l|l|l Category & Examples & Fixed/Variable \\ Goods & Pet food & Variable (cost of goods sold) \\ & Pet accessories & Variable (cost of goods sold) \\ Services & Delivery service & Variable (fuel, packaging) \\ Other costs & Shop rent & Fixed \\ & Insurance & Fixed \\ & Electricity & Fixed (or semi-variable) \\ & Cost of goods sold & Variable \\ & Delivery fuel & Variable \\ 2.2 Features of a sole trader 1. Single ownership: Owned and controlled by one person who provides all the capital. 2. Unlimited liability: The owner has unlimited liability, meaning personal assets are at risk if the business fails. 3. All profits to owner: The owner keeps all profits after taxes. 4. Full decision-making: The owner makes all business decisions without partners. 5. No separate legal entity: The business and owner are not legally separate. 6. Easy and inexpensive to start: Simple registration, low setup costs. 7. Limited capital: Difficult to raise large amounts of capital as no shares can be sold. 8. Personal skill dependent: Success relies on the owner's skills and effort. **Total: 2.1 [15 marks] + 2.2 [10 marks] = 25 marks