What are economies of scale

1. What are economies of scale? In what market types (i.e. perfect competition, monopoly, oligopoly,
monopolistic competition) are economies of scale most important? Why? (10 marks)
2. Based on the article above and some limited research what type of market form you think the
airline industry in Australia was in 2002/03? Support your answer with reference to the

1. Based on the current data for France what phase of the business cycle do you think this
economy is in? Why? (Hint: Refer to the macroeconomic indicators) (7 marks)
2. Based on your answer in 1 represent the French economy in 2017 using the AD/AS model. (7
marks)
3. What factors contribute to economic growth according to the AD/AS model? According to the
article above, what policy should the French government be undertaking to stimulate economic
growth (8 marks)
4. Imagine that instead of his planned reforms to the labour market, Macron invested in educating
workers to increase their skills and in infrastructure. How would this affect France’s economy in
the long-run? Demonstrate your answer with a diagram and explain your diagram. (

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