Economics Questions Thread

[chasej]

What should I put down in my exam revision notes for this section?:

"Effects of changes in supply and demand on equilibrium price and quantity:"

I know what they are but just don't know what to write down in my notes about it.

[millie96]

What are some arguments for and against this essay topic?

 "It does not take a genius to realise that without appropriate government policies (that protect the natural environment) to limit economic growth, the world will soon run out of resources"

[chasej]

What are some arguments for and against this essay topic?

 "It does not take a genius to realise that without appropriate government policies (that protect the natural environment) to limit economic growth, the world will soon run out of resources"

This is about the issue of sustainable growth. Managing growth and being able to improve our material living standards by producing more goods and services which use finite resources balanced with our need to ensure we are not damaging the environment (reducing pollution, managing waste) or depleting resources which are needed to fulfil the needs and wants living standards of future generations and thus future generations living standards both material and non-material (inter-temporal efficiency). keeping growth limited is also important as of course excess production and use of resources can damage our health and that of nature as we mess with the natural environment and use resources much much faster than the earth is able to replenish them.

What I highlighted in bold is probably one of the biggest contemporary economic issues that is thrown around a lot in politics and can be very controversial (e.g. carbon tax).

Why do you need arguments both for and against an essay topic? My teachers always tell me you always argue only one point of view in an essay.

[millie96]

This is about the issue of sustainable growth. Managing growth and being able to improve our material living standards by producing more goods and services which use finite resources balanced with our need to ensure we are not damaging the environment (reducing pollution, managing waste) or depleting resources which are needed to fulfil the needs and wants living standards of future generations and thus future generations living standards both material and non-material (inter-temporal efficiency). keeping growth limited is also important as of course excess production and use of resources can damage our health and that of nature as we mess with the natural environment and use resources much much faster than the earth is able to replenish them.

What I highlighted in bold is probably one of the biggest contemporary economic issues that is thrown around a lot in politics and can be very controversial (e.g. carbon tax).

Why do you need arguments both for and against an essay topic? My teachers always tell me you always argue only one point of view in an essay.

thanks for your answer! Not sure why we need both arguments, it just says on the sheet we have to.

[dantan]

What should I put down in my exam revision notes for this section?:

"Effects of changes in supply and demand on equilibrium price and quantity:"

I know what they are but just don't know what to write down in my notes about it.

Hey I don't know if you've had you question answered, but I would literally just write:

Increase supply: Increased quantity, decreased price

And basically do that for every possible change (there are only four). Other than that, that knowledge should be intuitive, so if you already know it I don't think there's a huge need to write it in your notes?

[chasej]

Hey I don't know if you've had you question answered, but I would literally just write:

Increase supply: Increased quantity, decreased price

And basically do that for every possible change (there are only four). Other than that, that knowledge should be intuitive, so if you already know it I don't think there's a huge need to write it in your notes?

Thanks. I knew what it was, just couldn't figure out how to put it down in my notes. I probably don't need to write it down but I just like to make sure I have notes that cover all the key knowledge for exam preparation.

[Deleted User]

Out of the 4 market types, would you say that the market for cars is monopolistic competition?

[abcdqdxD]

Yeah I'd say so since brand differentiation is important, and there are quite a lot of car-makers (there are a lot of lesser-known ones).

[chasej]

Out of the 4 market types, would you say that the market for cars is monopolistic competition?

No. The only difference between a perfectly competitive market and monopolistic competition is the fact that in a monopolistically competitive market the products sold are NOT homogenous whereas in a perfectly competitive market they are. Monopolistic competition retains all the other charrecteristics of a perfectly competitive market, including ease of entry and exit. Car manufacturing is not a business that one can easily enter and exit the market of due to the cost of initially starting up manufacturing.

I would say the car market is an oligopoly. The definition of an oligopoly is fairly loose, requiring that "a few firms dominate the market". That definition allows for a few large companies (Toyota, ford etc) to hold a majority of the market share collectively, while many other lesser known companies exist in the market however have very little market power, which is very much what the Australian car market is like today. 

[abcdqdxD]

No. The only difference between a perfectly competitive market and monopolistic competition is the fact that in a monopolistically competitive market the products sold are NOT homogenous whereas in a perfectly competitive market they are. Monopolistic competition retains all the other charrecteristics of a perfectly competitive market, including ease of entry and exit. Car manufacturing is not a business that one can easily enter and exit the market of due to the cost of initially starting up manufacturing.

Oligopoly in Australia? Possibly. In the world? Don't think so. Monopolistic competition does not retain all other characteristics of PC other than product differentiation, there are moderate barriers to entry and exit and they have relatively more market power.

Quote: A simple example of monopolistic competition can be seen in car sales. Cars are all designed for the same purpose, which is to provide transport for people and goods. However, there are many different types of cars on the market. Consumers can choose between different body types, price points, colors, and so forth.

[chasej]

Explain, using an example, how an improvement in non-material living standards might jeopardise an improvement in material living standards? (4 marks)


This was my answer but it seems very sub-standard and the example is childish, even if it were corrected by the most generous examiner in the world I can't see it getting more than 2 marks:
When we seek to improve non-material living standards often we have to sacrifice the ability to improve out material living standards. For example if a government decided to ban fishing in a certain area of water as the boats were causing too much pollution which was destroying people's enjoyment of the area, even though an increase in the happiness of people was occurring,  we would be sacrificing the ability to access the fish and we will be therefore missing out on eating the fish. These trade offs between environmental awareness, our own wellbeing, and out desire to produce and access more goods and services are very common in the modern world.

[abcdqdxD]

Explain, using an example, how an improvement in non-material living standards might jeopardise an improvement in material living standards? (4 marks)


This was my answer but it seems very sub-standard and the example is childish, even if it were corrected by the most generous examiner in the world I can't see it getting more than 2 marks:
When we seek to improve non-material living standards often we have to sacrifice the ability to improve out material living standards. For example if a government decided to ban fishing in a certain area of water as the boats were causing too much pollution which was destroying people's enjoyment of the area, even though an increase in the happiness of people was occurring,  we would be sacrificing the ability to access the fish and we will be therefore missing out on eating the fish. These trade offs between environmental awareness, our own wellbeing, and out desire to produce and access more goods and services are very common in the modern world.

Maybe start by defining living standards and explain the difference between material and non-material living standards with an example. Then explore the conflict between material and non material living standards.

[dantan]

Maybe start by defining living standards and explain the difference between material and non-material living standards with an example. Then explore the conflict between material and non material living standards.

Seconded. I think a definition will make it more explicit what you're trying to explain.

Also, as for your example (@chasej) , I think looking at the trade-off between things like working and gaining income v leisure time, working v stress etc. I think the trade off is much more explicit here.

[abcdqdxD]

A couple of questions:

Does the CPI figure take into account price changes of imports? Or is the CPI only measuring changes in the cost of Australian made goods and services that are in the regimen?

Is inflation caused by natural events such as droughts and cyclones considered demand-pull inflation or cost-push inflation?

[Kuchiki]

Does the CPI figure take into account price changes of imports? Or is the CPI only measuring changes in the cost of Australian made goods and services that are in the regimen?

Yes, imports are taken into account.

Is inflation caused by natural events such as droughts and cyclones considered demand-pull inflation or cost-push inflation?

There would be both. I'd say there's generally more cost-push inflation (due to the shortage of raw materials), but there would also be demand-pull inflation (due to spending on repairs and rebuilding, etc).