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Due: 7pm Tuesday, 7 August, 2018 (Week 6)
Note that when you are answering questions that require mathematical calculations, you should provide details as to how the answers were derived. In completing your answers, you should use correctly labelled graphs wherever possible. Always provide a brief explanation of each graph, including how it relates to your overall answer/argument.
Question 1 (10 marks)
1. Joan, who has been a university student for a year, has just started a new job. She realises that if she works more hours there will be an impact on her grades. The following is Joan's production possibility table for work and her average grades:
|Production possibilities||Grade (%)||Work
(hours per week)
From the figures in the table above:
- Plot the production possibility curve for Joan. (1 mark)
- Explain the concept of increasing opportunity cost using the production possibility table and curve plotted in Q1ai above. (2 mark)
iii. If the opportunity cost of Joan increasing her grade was constant regardless of how many hours she worked, what would be the shape of her production possibility curve? Draw this graph. Which of the two shapes would be more likely, and why? (2 marks)
- What would be happening if Joan's combination of her grades and hours of work per week were below the curve as plotted above in Q1ai? (1 mark)
- How could Joan push her combination of her grades and hours of work per week past the current curve? (2 mark)
- After a period of good growing weather Australia produced a plentiful wheat crop – does this mean that it will not have a scarcity problem in regards to wheat? Provide reasons for your answer (300 words maximum).
Question 2 (10 marks)
In February 2018, it was reported that Australia's solar power capacity could almost double in a year.
- Use demand and supply curves to show the doubling of capacity. (3 marks)
- Use demand and supply curves to show what is likely to happen to demand over time in response to the capacity increases (see Q2a above). (3 marks)
- Use demand and supply curves of the solar powered industry and coal-fired power electricity industry to show what is likely to happen to demand and supply of solar power if the government introduces a tax on coal-fired power electricity. (4 marks)
Question 3 (10 marks)
- Explain in your own words, using demand and supply curves, the concepts of consumer and producer surplus. (3 marks)
- Using demand and supply curves describe and illustrate what would happen to consumer and producer surplus if solar power capacity is increased. (4 marks)
- The treasurer, Scott Morrison, has stated that business tax cuts will be good for business and workers. Is this a positive or a normative statement? Provide reasons for your answer (300 words maximum). (3 marks)
Question 4 (10 marks)
- Complete the table below outlining the demand for hot doughnuts in winter. In your calculations use the midpoint method to calculate the price elasticities. (5 marks)
|Quantity demanded||Total revenue
|Percent change in price||Percentage change in quantity demanded||Elasticity value||Assessment of Elasticity|
- Do you think the price elasticity of demand for hot doughnuts in summer would be the same as in winter or would it become more elastic or more inelastic? Explain your answer. (3 marks)
- What would you expect the price elasticity of demand for cigarettes to be? Explain your answer. (2 marks)
Question 5 (10 marks)
a i. Complete the cost schedule below for a company operating in a free-market (remember that MC and MR values are placed midway between the output figures):
|Output||Total Fixed Cost (TFC)
|Total Variable Cost (TVC)
|Total Cost (TC)
|Average total cost
|Marginal Cost (MC)
- If the firm is operating in a perfect market where the market price for the good the company produces is $150, how many items should this company produce in order to maximise profit? Explain your answer. (2 marks)
- Graph the average total cost, marginal cost, average revenue and marginal revenue curves. (2 marks)
- In your own words explain the concept of diminishing returns and describe what will happen to marginal product, total output and marginal cost when diminishing returns start to occur. (2 marks)
TOTAL FOR ASSIGNMENT 1: 50 marks (weighting 25% of total marks for the unit)
Length: 1500 words – (up to 2000 words is permissible)
In February 2017, the Sydney Morning Herald presented the views of some economists regarding the performance of the Australian economy in 2017 (see http://www.smh.com.au/business/markets/economists-deeply-divided-over-australias-economic-path-in-2017-20170207-gu72ev.html). For Assignment 2 you are required to firstly read this article and to then prepare a report on the current (i.e., August/September 2018) state of the Australian economy and compare its performance with state of the economy in August 2017. In completing your report it will be necessary to examine the latest figures and the August 2017 figures for the following four economic indicators – economic growth (GDP), unemployment, inflation and trade (including the terms of trade, the current account, net foreign debt and the value of the Australian dollar). In examining the performance of the Australian economy it will be useful to outline any expected target values that may exist for the economic indicators. Finally, given your analysis, you are asked to highlight three major issues you believe are facing the Australian economy over the next 12 months and why you perceive these as of concern.
Presentation of report
The report should be between 1500 and 2000 words. This word limit does not include the abstract, tables, graphs and reference list.
The report should be word processed using Times New Roman font size 12 with 1.5 line spacing.
Structure of report
Your report must include:
- an appropriate title
- an abstract (sometimes called an executive summary) summarising the report
- an introduction in which you briefly explain what you are going to address in the report and why
- the body of the essay broken into sections with appropriate section headings
- a brief conclusion that should summarise your analysis
- appropriate in-text referencing and a reference list at the end of the report.
Although the requirements for presentation and structure may appear pedantic, they are not. In the business world you may often find yourself involved in writing a report – perhaps even for multilateral and government organisations such as the IMF or OECD. We suggest that you devote some time to developing this skill. Your future career can only be enhanced by your ability to communicate effectively in writing.
Marking criteria Assignment 2
Your report will be marked against the following criteria:
- Abstract (2 marks)
- Introduction (1 mark)
- The body of the report providing:
- An appropriate description and discussion of the current state of the Australian economy as reflected by the four economic indicators – economic growth, unemployment, inflation and trade in Australia and the economy in 2018. You also need to compare the current situation with that in August 2017(8 marks)
- A succinct description of three major issues facing the Australian economy over the next 12 months. (6 marks)
- The body of the report providing:
- Conclusion (1 mark)
- Evidence in the report of a depth of research (3 marks)
- Accuracy in referencing (Harvard Style) (1 mark)
- Presentation, grammar, structure, etc. (3 marks)
TOTAL FOR ASSIGNMENT 2: 25 marks (weighting 25% of total marks for the unit)
Some advice about Assignment 2
Your short 'Abstract' needs to describe the aim of the report and provide a brief overview of the economic targets as well as the issues facing the economy. It should be approximately 500 words. The Abstract is worth 2 marks
The “Introduction” is a brief paragraph or two that outlines the aim of the report (i.e., what you are examining) and how the report is structured. The content of your assignment should generally reflect the marking criteria. REMEMBER that an Introduction is different to an Abstract. The Introduction is worth 1 mark.
The “body” of the report is the content of your research and analysis. You may want to consider dividing you report into different sections with appropriate subheadings.
You should begin the body of your report with a discussion and comparison of the values of the four economic indicators under investigation (Economic Growth (GDP), Unemployment, Inflation and Trade) in Australia in 2017 and 2018. You could also discuss the government's targets for these indicators. Ensure that you are clear on what you are presenting with regard to the indicators- e.g., do your indicators show GDP, growth in GDP over time or GDP per capita growth? This section is worth 8 marks
Once you have discussed the variables you need to provide your (well thought out) opinions about three major issues facing the Australian economy over the next 12 months. You need to support your opinions with reputable research. This section is worth 6 marks.
In your “Conclusion” you need to discuss briefly the Australian economy in 2017 and 2018 and what you see as the major issues facing the economy. This section is worth 1 mark.
You are expected to have used a number of references to enable you to prepare this report. This section is worth 3 marks.
You also need to ensure that you have consistently used correct Harvard referencing throughout the report and that you have correctly formatted your Reference List at the end of the report. Consistent and correct referencing includes correctly referencing all charts and statistics used in compiling your report. Only include the references that you actually used in your report. This section is worth 1 mark.
Finally but importantly pay careful attention to the structure of your report as well as presentation and grammar. This aspect of your report is worth 3 marks.
You should check your 'turnitin' value before submitting your assignment. A value of over 50 per cent should raise some concerns for you. If you are still uncertain about using turnitin refer to the documents in the unit's MySCU site.
There are a number of useful resources you can use to gather information but make sure you are using reliable sources and that all sources are fully and correctly referenced. Useful sources of information might include the following web sites:
- Australian Bureau of Statistics http://www.abs.gov.au
- The Reserve Bank of Australia http://www.rba.gov.au
- Australian Government Treasury http://www.treasury.gov.au
- Department of Finance http://www.finance.gov.au
- Productivity Commission http://www.pc.gov.au
- World Trade Organization http://www.wto.org
- OECD http://www.oecd.org
- ABC News http://www.abc.net.au/news/
- Trading Economics http://tradingeconomics.com
Some newspaper sites may also be useful. For example, the Australian Financial Review, the Sydney Morning Herald, the Australian, the Guardian and other major newspapers. The editions around the time of economic policy announcements are especially useful.
You will also need to look closely at some recent budgets that are usually brought down in May (details can be found at http://www.budget.gov.au) and monetary policy announcements about interest rates can be found at http://www.rba.gov.au. The RBA’s quarterly statement on monetary policy is also a very useful source of information on the economy and its status. If you find some good sources I suggest that you share them with other students on the Unit's Discussion Board.
Exam period: TBA
Weighting: 50% of total marks for the unit
The final examination is scheduled for the end of the study period. Students will be fully advised during the study period as to when the exam will be held and the format it will take. The exam will be closed book. Students will be able to take in a silent non-programmable calculator.
This report focuses on economic scenario of one of the leading and wealthy countries of the nation Australia. The growth and development of a nation is determined by number of measures such As GDP (Gross Domestic Product), employment and trade. In this report four major factors have been chosen for comparing the economic growth of Australia in year 2018 to that of 2017. The comparison of the factors on the two different points of time will provide a view of the economic state of the country. This focuses on the discussion and comparison of the values of the four economic indicators (Economic Growth (GDP), Unemployment, Inflation and Trade) in Australia in 2017 and 2018. The comparison will be done with the help of secondary research include the report, books and websites. The secondary research is one of the effective ways of researching or studying on a topic. The findings of the report indicate that the GDP of the country has increased in the second quarter of year 2018 in comparison of second quarter of 2017. There has been a fall in the GDP in the year 2018 from 1.1% to 0.9%. Further, the unemployment rate of the country has significantly reduced from 5.6 to 5.3 in July 2018. The inflation rates of the country increased in 2018 July in comparison of July 2017. The trade in the Australian economy has also increased in the July 2018 to 87.7 which 82.3 in the year 2017 July. The overall findings of the study indicate that the GDP of the county has reduced because of lower consumer spending, construction and the falling prices of the houses. Other immediate causes behind a downfall in GDP should be identified with the help of other authorities so that the GDP of the country can be improved. The unemployment rate of the country has reduced in the July 2018 but still there is a need of government initiatives and policies that can further help in reducing the unemployment rate of the country. No significant changes have been seen in the reduction of inflation rate of the country in July 2018. Inflation is one of the major issues of developed and developing economies. The rising cost of transport is one of the major reasons behind the increased inflation rate in Australia in July 2018. For this purpose, the Australian government also sets the bands of targets for the inflation rate to 2-3%. The immediate steps should be taken to ensure that the inflation rate does not go beyond this band. This will help in preventing the distortion of prices of products and services. Lastly the findings of the report indicate that the trade in the country has decreased in July 2018 in comparison with the first quarter of 2018. Australia is a largest exporter of iron ore in the world. In this context the focus of government should be on increasing the number of exports and decreasing the number of imports in the country. The above report has provided an overview of the current and past state of Australian economy. The findings of this study can be used to help the Australian economy by reducing the unemployment rate, inflation and increasing the GDP and trade in the country.
This report focuses on the discussion and comparison of the values of the four economic indicators (Economic Growth (GDP), Unemployment, Inflation and Trade) in Australia in 2017 and 2018. This report is one of the significant efforts in terms of understanding the economic growth of Australia. A comparison will be made between economic growth in year 2018 and 2017. The comparison will help in identifying the major issues prevailing in the Australian economy. Graphs will be used to present the current and past state of the country in the four economic indicators mentioned above.
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