Economics Questions Thread

[Hodgeyhodgey]

It's a tricky question, but generally "a contraction in demand for coke" means that the actual deman curve for coke has shifted inwards, but what has actually happened is that the quantity of coke bottles demanded has shifted ALONG the demand curve to a lower quantity. So the demand for coke at any given price is the same, but the QUANTITY of coke bottle demanded is reduced. Tricky question.

Ouch, hate to have something like that on an exam.

[Hutchoo]

It's a tricky question, but generally "a contraction in demand for coke" means that the actual deman curve for coke has shifted inwards, but what has actually happened is that the quantity of coke bottles demanded has shifted ALONG the demand curve to a lower quantity. So the demand for coke at any given price is the same, but the QUANTITY of coke bottle demanded is reduced. Tricky question.

Ouch, hate to have something like that on an exam.

Very tricky question... Had me like "0.o" for ages..

Also; for the exam... is it the whole of unit 3 and 4 in one paper or is it just unit 4?
Honestly, I don't know how the structure is for economics :F. Can someone please help me understand?
Thanks.

[schmalex]

Everything will be assessable on the exam, which counts for 50% of your study score. The other 50% is SACs throughout the year, mostly just tests.

[davyp3]

It's a tricky question, but generally "a contraction in demand for coke" means that the actual deman curve for coke has shifted inwards, but what has actually happened is that the quantity of coke bottles demanded has shifted ALONG the demand curve to a lower quantity. So the demand for coke at any given price is the same, but the QUANTITY of coke bottle demanded is reduced. Tricky question.

Ouch, hate to have something like that on an exam.

Very tricky question... Had me like "0.o" for ages..

Also; for the exam... is it the whole of unit 3 and 4 in one paper or is it just unit 4?
Honestly, I don't know how the structure is for economics :F. Can someone please help me understand?
Thanks.

The exam has tended to be more even in terms of unit 3 and 4 content of recent times

[chrisjb]

thanks for tha schlamex, I was stumped by that one... I always get screwed over by little bits like that in questions (it took me ages to get the whole 'change of quantity at any given price') concept into my brain...

Just a quick one that has been troubling me for a little while (promise that this will be the last one for a little while )

With Opportunity cost, do you calculate ALL the possible alternatives or just the greatest one? Like if someone can choose to use an acre of farmland to rear either sheep, cattle or horses and they decide to rear sheep, is the opportunity cost the cost of the cattle+horses or just which ever one was worth more?

[Hodgeyhodgey]

You find the best option possible and then the next best option = opportunity cost.

Someone confirm? I'm still kinda new to this

[Hutchoo]

thanks for tha schlamex, I was stumped by that one... I always get screwed over by little bits like that in questions (it took me ages to get the whole 'change of quantity at any given price') concept into my brain...

Just a quick one that has been troubling me for a little while (promise that this will be the last one for a little while )

With Opportunity cost, do you calculate ALL the possible alternatives or just the greatest one? Like if someone can choose to use an acre of farmland to rear either sheep, cattle or horses and they decide to rear sheep, is the opportunity cost the cost of the cattle+horses or just which ever one was worth more?

Next best alternative, meaning the next best thing.
I'm pretty sure it's the next best possibility; not all of the other possibilities put in one.

[schmalex]

thanks for tha schlamex, I was stumped by that one... I always get screwed over by little bits like that in questions (it took me ages to get the whole 'change of quantity at any given price') concept into my brain...

Just a quick one that has been troubling me for a little while (promise that this will be the last one for a little while )

With Opportunity cost, do you calculate ALL the possible alternatives or just the greatest one? Like if someone can choose to use an acre of farmland to rear either sheep, cattle or horses and they decide to rear sheep, is the opportunity cost the cost of the cattle+horses or just which ever one was worth more?

It's the next best option. So he cost would be opportunity of using the farmland to rear horses. So the farmer would work out what he could make from a horse, cow and pig farm. If a horse farm could make $100,000 a year, a pig farm $80,000 a year, a cow farm $50,000 a year, the opportunity cost of farming horses would be the value of the pig farm, if it was set up, or even the opportunity cost of selling the land, if that was the next best option.

[Hutchoo]

How do you write Economic style essays?
Seriously, I'm so confused T_T

This question is from Economics Down Under.. found on page 34 I think.
It's under "An essay".

Explain at the microeconomic level how the operation of the price system in Australia allocates scarce resources between alternative uses. Illustrate your answer by reference to appropriate current examples of markets. If you wish, use fully labelled diagrams to help your explanation. (20 marks)

I don't understand what they mean by "price system" and how to draw a diagram for it.

In addition to that... how can you break down that question into 20 marks?
I think if someone went through this or possibly wrote a thread on "How to write an economics essay" it would greatly help all of the people doing Economics on VN.

Sorry for the long message; as you can tell.. I'm quite incompetent.

[schmalex]

Okay firstly, it isn't on the study design that you have to write essays, and you won't be asked to do it in the exam. The price system is also known as the market mechanism. Does that ring a bell?

[Hutchoo]

Economics is a great subject but there are so many synonyms D:
Yes, the question makes sense now.

I'm glad that there aren't any essay questions in the study design... They're seriously fked.
Thank you so much schmalex, you're seriously a great guy/girl (?) for helping all of VN's economics students.
Many more questions to come

[schmalex]

I could be a great person, or I could be extremely bored and actually missing study...


let's just go with great for now

And I have to write essays this year for second year economics and I'm a little freaked out myself at the idea

[DNAngel]

Hey guys,

Just a question I'm having difficulty in answering (This is in preparation for my SAC in about a week and a half's time  ).

It goes like this:

Giving an Australian example, explain what is meant by a restricted market. Why might this sometimes cause inefficiency in resource allocation?

I've been thinking that the 'restricted market' may be referring to a pure monopoly, however, I'm not too sure about examples in Australia.

[chrisjb]

Hey guys,

Just a question I'm having difficulty in answering (This is in preparation for my SAC in about a week and a half's time  ).

It goes like this:

Giving an Australian example, explain what is meant by a restricted market. Why might this sometimes cause inefficiency in resource allocation?

I've been thinking that the 'restricted market' may be referring to a pure monopoly, however, I'm not too sure about examples in Australia.

I think that a restricted market is one in which the government is regulating it (i.e. not free). A good example of this is the labour market, where in some instances the minumum wages set by the government are above equliibrium price. If you were to graph this then you can see that it results in unemployment (i.e. a glut/oversuply of workers). That's the generic example given I think, see if you can think of another one because it's good to be different.

Also, if someone could confirm that then it'd be great (I'm always cautious with economics )

I also have a question of my own to ask, I got this in a multiple choice thing again:

If demand is price elastic:

A) a rise in price willdecrease total expenditure
B) A rise in price will increase total expenditure
C) a rise in price will not change the total expenditure
D) the demand curve will tend to be vertical

I somehow always manage to guess ones I don't know through sheer blind luck, and I got the answer A (which is apparantly right)... But I don't actualy understand the question. What is expenditure (I thought it was a term for spending money- but... it... doesn't... make... sense in my head), and how does elasticty affect it?

Thanks in advance.

[Water]

Lol, you might have to confirm with the elite ex-economic students in the forum.

But i'm going think very basic atm,

If demand is price elastic:

A) a rise in price willdecrease total expenditure
B) A rise in price will increase total expenditure
C) a rise in price will not change the total expenditure
D) the demand curve will tend to be vertical


A) would be considered the right answer, as , when you rise the price, your quantity is lowered, hence, your total expenditure decreased

B) A Rise in price will not mean increase quantity, thus total expenditure cannot increase

C) A Rise in price, will not mean your quantity will stay the same amount

D) Is wrong by Default.





I was thinking too complex before, about price elastic, and thought it'd refer to price elasticity of demand. But it just means, that the price of the demanded item, can be shifted either to be more expensive or cheaper.