Economics Questions Thread

[sam.utute]

"... the government's current approach to fiscal policy..." Is this referring to the 2011/12 or 2012/13 budget?

Current approach refers to the government's plan to employ a contractionary stance in the budget thats enforced mid this year til mid next year, so 2012-2013.

"Describe one example of budgetary policy action, implemented over the past two years..." Does this include policies from the 2012/13 budget?

Past 2 years, hence its prior to the this year's budget which is 2012-2013.

I disagree. This year's budget is the most relevant one to discuss.
When I sat the exam, I pretty much only quoted policies from the budget that was released earlier that year (e.g. 2010-11 budget).

You ARE DEFINITELY allowed to use this year's budget.

[redxman]

Can someone help me with the following questions?

In a competitive market economy, explain one factor that might cause a change in relative prices.

Explain how a change in relative prices would result in a reallocation of resources.

[dantan]

So firstly, I would define relative prices as 'the price of a good or service compared to another good or service.'

In a competitive market economy, explain one factor that might cause a change in relative prices.
Here I would then discuss microeconomic demand factors, as you need a factor that increases demand in a single market (rather than on a macro level) for relative prices to increase. Say for example, a particular g+s comes into style, then more people will demand it. Given that the demand for other g+s in other markets stay relatively stable, the price of the 'cool' g/s will rise relative to other g+s.

Explain how a change in relative prices would result in a reallocation of resources.

I would start here by defining the price mechanism as 'the system whereby the free forces of demand and supply interact to set relative prices at the point of market equilibrium.'
Then talk about how a rise in the relative price of a g/s creates a price signal for producers, signalling underproduction and hence more profit opportunities. As such, to take advantage of these opportunities, firms will wish to allocate more resources to its production, and they will allocate their resources away from other markets where relative prices have fallen.

[Deleted User]

"... the government's current approach to fiscal policy..." Is this referring to the 2011/12 or 2012/13 budget?

Current approach refers to the government's plan to employ a contractionary stance in the budget thats enforced mid this year til mid next year, so 2012-2013.

"Describe one example of budgetary policy action, implemented over the past two years..." Does this include policies from the 2012/13 budget?

Past 2 years, hence its prior to the this year's budget which is 2012-2013.

I disagree. This year's budget is the most relevant one to discuss.
When I sat the exam, I pretty much only quoted policies from the budget that was released earlier that year (e.g. 2010-11 budget).

You ARE DEFINITELY allowed to use this year's budget.

So if a questions asks... "Discuss a policy that has been implemented...." This includes policies from the 2012/13 budget?

[dantan]

Yes absolutely I would, as far as I understand, the focus is supposed to be on the 2012-13 budget when you answer questions about recent policies.

[sadboy222]

anyone know a demand and supply factor effecting external stability in last 12 months?

[morgs21]

anyone know a demand and supply factor effecting external stability in last 12 months?

AD - Slowing growth in China has led to decreased demand for our exports, hence a worsening current account.
AS - Relatively high labour productivity levels (over 3% per hour worked compared with -2% in 2009) has allowed for increased productive efficiency, hence lower production costs. This may lead to firms lowering selling costs, which makes Australian goods/services more internationally competitive, which can increase export sales hence improve current account.

[dim_sim]

How does the free operation of the market normally allocate resources efficiently? (6 marks)
I could ramble on for ages, but I have no idea how to get the marks and write a nice, structured answer. 

[dantan]

How does the free operation of the market normally allocate resources efficiently? (6 marks)
I could ramble on for ages, but I have no idea how to get the marks and write a nice, structured answer. 

Hmmm, for six marks I would probably include the following:

- Definition of the price mechanism and relative prices, because this is the crux of how the free market operates in the allocation of resources
- The other thing would be to talk about consumer sovereignty, the essential idea that firms will produce only what consumers are buying or risk going bankrupt
- Finally, I would then give a theoretical example of how the price mechanism sets relative prices, and how the subsequent price signals affect resource allocation

Hopefully you should be able to structure something from those points

[LazyZombie]

Simple question - Can we write out our answers in economics exams/sacs with pencil?

[Kuchiki]

My teacher let one of my friends write with pencil in his SACs, but since you have to use pen in the exam (except in the multiple-choice section), I would advise against it.

[abcdqdxD]

Hmm, then would it be worthwhile spending time to plan/structure your response in your head before you write?

[Kuchiki]

Yes, definitely plan what you're going to write. That's what you should be doing during reading time (I'm not sure about your school, but my teacher always gave us at least 5 minutes reading time at the start of each SAC to practise this).

By the end of the year, though, you'll have practised the structure so much that it will probably come naturally to you anyway.

And if you do feel like changing your response in the middle of writing, you can always just cross it out.

[abcdqdxD]

Does anyone know the difference between the economics fundamentals textbook and economics downunder?

I have both, which one should I use as my "main" textbook?

thanks

[morantz]

Does anyone know the difference between the economics fundamentals textbook and economics downunder?

I have both, which one should I use as my "main" textbook?

thanks

I used the Economics Down Under variant last year which was selected by my teacher who managed the economics curriculum. He swore by it compared to many other textbooks used in the past.