HSC Economics Question Thread

[RuiAce]

ELASTIC, means that even a slight change in price, will incur a greater change in demand for that product. Applying this to the total outlay method/ total revenue method, If T.outlay moves in the opposite direction to change in price, demand is elastic. note: both T.outlay and price can move in whatever direction they choose to - eg decrease or increase. As long as they are in opposite direction, it is demand elastic.
INELASTIC, means that a change in price will essentially have zero impact on the demand. So if T.outlay moves in the same direction, then demand is inelastic. note: again, T.outlay and price can move in any direction. As long as both move in same direction, it is demand inelastic.
UNIT ELASTIC, means that despite a change in price, there is no change in T.outlay.

Is this how they teach it to you guys in HSC Economics? Because elasticity is, by definition, just a measure of the responsiveness to a change in price in the quantity demanded.

Having done Micro 1 at UNSW I can help you out here.

Note that the elasticity of demand is a measure of responsiveness as to a change in price. It is basically the change in quantity demand for a small change in price.

(Keep at the back of your head that according to the law of demand, consumers have a greater willingness to buy more in quantity when the prices are low.)

Note: Elasticity < -1 implies elastic
Elasticity = -1 implies unit elastic
-1 < Elasticity < 0 implies inelastic

The fact that the total revenue increases when you increase the price on a good with inelastic demand is actually a consequence of the formula above, combined with the fact that Total Revenue = Qty Demanded * Price

[Adriaclya]

Is this how they teach it to you guys in HSC Economics? Because elasticity is, by definition, just a measure of the responsiveness to a change in price in the quantity demanded.

yup its kinda weird right??! But then again, this is just a method to know. 

[Klexos]

I was just reviewing my unemployment essay (which I related to EG as an extension) and saw this "rising output gap" comment but unsure to what it means and how it relates to rising unemployment.

[Adriaclya]

I was just reviewing my unemployment essay (which I related to EG as an extension) and saw this "rising output gap" comment but unsure to what it means and how it relates to rising unemployment.

Hello Klexos!
Basically, the rise in unemployment to 5.8% as a result of the GFC, ultimately lowered the demand for output (as you stated) - which is THEN reflective of lowered economic growth. So in context, the rising out put gap means that the difference in the demand for output, hence production, DURING the GFC and PRE-GFC is increasing.
Gradual increase of unemployment = gradual decrease in demand + production of output = increasing difference/ gap in output before and during/lead up to GFC.

If it helps in any way, think of "rising output gap" as in increasing gap in output rather than rising output in general.

[Klexos]

Hello Klexos!
Basically, the rise in unemployment to 5.8% as a result of the GFC, ultimately lowered the demand for output (as you stated) - which is THEN reflective of lowered economic growth. So in context, the rising out put gap means that the difference in the demand for output, hence production, DURING the GFC and PRE-GFC is increasing.
Gradual increase of unemployment = gradual decrease in demand + production of output = increasing difference/ gap in output before and during/lead up to GFC.

If it helps in any way, think of "rising output gap" as in increasing gap in output rather than rising output in general.

Hi! Thanks for your response

[Adriaclya]

Hi! Thanks for your response

No probs!

[jamie anderson]

Hey guys how would i read tariff diagrams? as in how much do consumers spend, government revenue, and all that all i know is the new import level where it contracts to the new S and D curve points

Thanks

[brontem]

Hey guys how would i read tariff diagrams? as in how much do consumers spend, government revenue, and all that all i know is the new import level where it contracts to the new S and D curve points

Thanks

It's hard to write out, I recommend watching this: https://www.youtube.com/watch?v=EdkYjeqclys

[brontem]

Wait no I found my (very dogdy) tariff diagram
Looking at the picture that's attached:

World price is the price before the tariff = $10
Tariff = $5
Price with tariff  = $15

Before the tariff:
Demand is 400 but supply is 100 - therefore to meet demand there needs to be 300 units imported. (blue line)

After the tariff:
Demand is 300 but supply is 200 - so only 100 units need to be imported (green line)

Gov. revenue is always the box of size of the tariff x number of imports (yellow)

The size of the tariff is the gap increase from the world price (in this case $15 - $10 = $5)
I hope it makes sense?? If it doesn't just ask  (also if any of it is wrong someone pls correct it)

[jamie anderson]

I understand that part of the tariff diagram after spamming yt about it but how would i do this one  ?

Thanks!!

[brontem]

I understand that part of the tariff diagram after spamming yt about it but how would i do this one  ?

Thanks!!

Now that the price is $50 not $40, it should be $50 x 700 units demanded = $35 000 so C?

Although the answers for this says D... so I'm not sure hahaha 

[hermansia12]

Now that the price is $50 not $40, it should be $50 x 700 units demanded = $35 000 so C?

Although the answers for this says D... so I'm not sure hahaha 

Basically its like originally, consumers demand at 800 units (at the $40 world price). But since the government has imposed the tarriff (now at $50) -> The total consumer spending would be 50 * 800 to completely satisfy the original demand.

Thats why the answer is D

hope this helps

[Deng]

Hey, just curious how would i improve my economics essay skills for example in exams my short answer and multiple choice are generally fine however i always seem to bomb my essays. For example in my trials i had an exchange rate stimulus and a unemployment essay where it all went downhill. Part of my issue with essays is not knowing the whole syllabus extensively enough to sustain a strong argument for the whole essay so i guess what are ways to remember/understand the whole syllabus to a high extent ? ( other than continuous study ( already do so ) )

Thanks

[Adriaclya]

Hey, just curious how would i improve my economics essay skills for example in exams my short answer and multiple choice are generally fine however i always seem to bomb my essays. For example in my trials i had an exchange rate stimulus and a unemployment essay where it all went downhill. Part of my issue with essays is not knowing the whole syllabus extensively enough to sustain a strong argument for the whole essay so i guess what are ways to remember/understand the whole syllabus to a high extent ? ( other than continuous study ( already do so ) )

Hey there!
I see that you do both advanced english AND extension english! So obviously, your writing is very capable.
However, when it comes to eco, all the airy fairy writing that normally happens in english is pretty much unnecessary. There is more focus at being concise and to the point. In fact, short sentences that don't ramble on are usually the best. Write only whatever gives you marks is the rule of thumb (but don't compromise coherence and synthesis in saying that though).

Additionally, knowing the syllabus extensively is great. But more importantly is how you can make connections between syllabus dotpoints. This is where you:

- know connections between cause and effect. This lets you to ALWAYS be able to BACK UP your statement. This lays foundation for your stronk argument and shows depth of knowledge. In all, knowing just theory in the syllabus is not enough. Question how each dotpoint relates to eachother - be able to apply that knowledge.

-(can't stress enough) take into account of the question verb. This pretty much dictates what your response should be like and what you should write. Eg evaluate = make a judgement on how effective something is. Explain = how and why something works.

- have statistics where necessary. Keep in mind that statistics don't explain anything. Its there to act as evidence to support your argument - it strengthens your argument. You must make connections of this statistic to what it shows, why it shows that and how is it caused.

In all, do not settle for just knowing the theory - know why and how this theory interrelates with eachother. Like, doing this makes it easier for you to remember and forces you to understand concepts than just rote memory. Anyhow, that's all i can offer. Hope this helps!

[brontem]

Can someone help me with these? How do you work out the appreciation/depreciation from its value against another currency? I get how to work it out in graph form but I always get tricked by these questions 
Thanks