Economics Questions Thread

[NAT0003]

How do you understand what the question askes you in economics without getting confused?

[TheCommando]

How do you understand what the question askes you in economics without getting confused?

If u dont inderstand it that means u dont understand the concept associated within that question, therefore the best thing you can do is relearn that psrticular concept, if u dont understand it from the textbook see another scource like another different text as things are explained differently which u may understand, if that doesnt help email your teacher or see your teacher at snack or lunch

[TheCommando]

Does anyone know how to answer this question: "explain why an economy must achieve productive efficiency in order to achieve allocative efficiency." (3 marks). Thanks!

You wanna make sure u define Productive efficiency and allocative efficiency as theese are the key words as they are the key concepts of whst the question is really asking you about.
Than you would link productive effiency and how it related to allocative efficent, you get theese marks based on how well the marker thinks you have written it:

Sample answer:
Technical (same thing as productive) efficiency involves firms producing at the lowest possible long run costs. Allocative effiencey on the other hand represents the best combination of goods and services produced such that living standards are maximised. If a nation is being technically efficent, this means that productivity is being maximised which is shown by that nation producing along any of the point on the ppf curve. As a result  this shows that the best combinatin of goods and services has occured, as by meeting the demands of consumers  firms are  technically efficent and therefore useses  the least amount of resources to satsisfy demand of consumers which shows allocative effiency.

Feel free to fix this answer if anyone reckons its wrong

[PandaWithNoName]

You wanna make sure u define Productive efficiency and allocative efficiency as theese are the key words as they are the key concepts of whst the question is really asking you about.
Than you would link productive effiency and how it related to allocative efficent, you get theese marks based on how well the marker thinks you have written it:

Sample answer:
Technical (same thing as productive) efficiency involves firms producing at the lowest possible long run costs. Allocative effiencey on the other hand represents the best combination of goods and services produced such that living standards are maximised. If a nation is being technically efficent, this means that productivity is being maximised which is shown by that nation producing along any of the point on the ppf curve. As a result  this shows that the best combinatin of goods and services has occured, as by meeting the demands of consumers  firms are  technically efficent and therefore useses  the least amount of resources to satsisfy demand of consumers which shows allocative effiency.

Feel free to fix this answer if anyone reckons its wrong

Not sure about how well you linked technical efficiency (productive) to allocative efficiency, I would be using price signals and shortage concepts:

My Answer:
Technical efficiency refers to where productivity is at maximum and average costs of production are low and it is impossible to increase outputs without increasing quantity or quality of inputs. Allocative efficiency refers to where the right combination of goods and servers are produced for the consumers who most want and need them, hence society's wellbeing is maximised and national living standards are increased.

For example, in an event where the  price rises for a product, it suggests to the producers that demand is increasing relative to supply and the market for that product might be experiencing a shortage (capacity constraints). Thus a rational producer would seek to maximise profits by using revenue to invest in better quality capital (equipment) in order to maximise productivity so more output can be produced from the same amount of inputs which as a result achieves technical efficiency. Therefore, 'scarce resources' are allocated towards a production of a good or service associated with increasing demand and allocative efficiency is achieved as any previous shortages are alleviated, prices are decreased (supply curve shift to right), material standards living standards increase as accessibility to such products are increased and society's wellbeing has collectively been satisfied.

[brooke99]

Hey..
Just wondering if anyone had any advice for how to revise for economics? is doing past exams the best thing?
I'm a lil stressed about the exam which is less than 4wks away!!   
any suggestions would be great!!!!
thanks! 

[zofromuxo]

Hey..
Just wondering if anyone had any advice for how to revise for economics? is doing past exams the best thing?
I'm a lil stressed about the exam which is less than 4wks away!!   
any suggestions would be great!!!!
thanks! 

As with everything, it depends.
A couple of factors to consider on what to do.
1. Concepts/Material/Theory
*The basic building block
-Go through the key knowledge points for Unit 3-4 and check that you can provide what they want.
Eg: types of government expenses including government current and capital expenditure and transfer payments
:Do you understand the type of government expenses, Can you give examples (real-life is better, refer to 2nd dot pt).

2. Examples/Statistics
*A common way to get easy marks, if your missing a piece of theory inside your response, but have a well-put and relevant example it can pull you over the line.
Eg: You have a 4 mark question about why the Monetary policy's stance is keeping steady, you explain the theory behind the monetary policy, but also link in other factors that are influencing it like house prices. This shows you understand the reasoning behind the monetary's policy stance from now only a theoretical standpoint, but also in real-life. As sometimes things in reality don't match the theory and if you incorporate that, you stand out compared to the state.

:The statistics you will need are the outline in this excel sheet: here. You want to know from the last 2-years and knowing the general trend of the data and specific values of the year if possible.

:I have uploaded some articles to look at:here and here
But also read The Age's Finance section, Australian Financial Review, ABS, RBA and Compak are good places to get relevant news articles. I think anything pre-March is good as the exam is written in March of this year, from memory.

If you ace these 2 dot pts, then I would go ahead and do practice exams.
A few pointers on doing practice exams
-Draw graphs & diagrams, much like examples they can give the examiner a reason to give you a mark for the question, as you demonstrate you understand the question.
-Mark it yourself, get your friend(someone better then you or equal level) and your teacher to mark it last
:You do this because if your friend gives you a different mark, you can discuss why they scored you as they did. It serves as a learning exercise for both of you and also shows you alternative ways to answer a question. 
:Then get your teacher for the final decision on the mark, if you both don't agree what it should be.

[brooke99]

As with everything, it depends.
A couple of factors to consider on what to do.
1. Concepts/Material/Theory
*The basic building block
-Go through the key knowledge points for Unit 3-4 and check that you can provide what they want.
Eg: types of government expenses including government current and capital expenditure and transfer payments
:Do you understand the type of government expenses, Can you give examples (real-life is better, refer to 2nd dot pt).

2. Examples/Statistics
*A common way to get easy marks, if your missing a piece of theory inside your response, but have a well-put and relevant example it can pull you over the line.
Eg: You have a 4 mark question about why the Monetary policy's stance is keeping steady, you explain the theory behind the monetary policy, but also link in other factors that are influencing it like house prices. This shows you understand the reasoning behind the monetary's policy stance from now only a theoretical standpoint, but also in real-life. As sometimes things in reality don't match the theory and if you incorporate that, you stand out compared to the state.

:The statistics you will need are the outline in this excel sheet: here. You want to know from the last 2-years and knowing the general trend of the data and specific values of the year if possible.

:I have uploaded some articles to look at:here and here
But also read The Age's Finance section, Australian Financial Review, ABS, RBA and Compak are good places to get relevant news articles. I think anything pre-March is good as the exam is written in March of this year, from memory.

If you ace these 2 dot pts, then I would go ahead and do practice exams.
A few pointers on doing practice exams
-Draw graphs & diagrams, much like examples they can give the examiner a reason to give you a mark for the question, as you demonstrate you understand the question.
-Mark it yourself, get your friend(someone better then you or equal level) and your teacher to mark it last
:You do this because if your friend gives you a different mark, you can discuss why they scored you as they did. It serves as a learning exercise for both of you and also shows you alternative ways to answer a question. 
:Then get your teacher for the final decision on the mark, if you both don't agree what it should be

thanks so much for that! very helpful!!

[zofromuxo]

thanks so much for that! very helpful!!

I'm grateful that you found it helpful, I hope you do well on your exams and I'm impressed your are doing Geography as well .

As you can tell, I'm a huge geo nerd - I mean who does a degree in it, if you aren't a nerd honestly
I'm also jealous of the "cool" changes that made to the study design like you guys can use ArcGIS like in my degree .

[brooke99]

I'm grateful that you found it helpful, I hope you do well on your exams and I'm impressed your are doing Geography as well .

As you can tell, I'm a huge geo nerd - I mean who does a degree in it, if you aren't a nerd honestly
I'm also jealous of the "cool" changes that made to the study design like you guys can use ArcGIS like in my degree .

thanks! yep i love geography! it's probably been my easiest subject this year just cos i enjoy it!

[abcdqdxD]

If anyone has any last minute questions before exams, ask away and I will do my best to respond!

[PandaWithNoName]

If anyone has any last minute questions before exams, ask away and I will do my best to respond!

Exam is a week away, just wanting to know how likely will there be questions on Term of Trade, the relationships between Terms of Trade and the CAD and Net Foreign Liabilities (Net Foreign Debt + Net Foreign equity).

Also is it likely there will be a question on how less competitive markets will affect on price and two types of efficiency? I saw this on a practice paper and it was extremely difficult because you have to recall knowledge on monopoly or oligopoly market structures which are not in the study design

[zofromuxo]

Exam is a week away, just wanting to know how likely will there be questions on Term of Trade, the relationships between Terms of Trade and the CAD and Net Foreign Liabilities (Net Foreign Debt + Net Foreign equity).

Also is it likely there will be a question on how less competitive markets will affect on price and two types of efficiency? I saw this on a practice paper and it was extremely difficult because you have to recall knowledge on monopoly or oligopoly market structures which are not in the study design

For your first question, it will be likely that you will be asked a question on those topics. There is usually one on it, it just depends on what has happened news-wise. I suspect it may be TOT and CAD or Net Foreign Liabilities this year. But don't quote me on that.

As for your second question. If it isn't on the study design then you won't be asked it on the exam.
Anything on the study design could be on the exam . Anything not on it, isn't on the exam.

[abcdqdxD]

Exam is a week away, just wanting to know how likely will there be questions on Term of Trade, the relationships between Terms of Trade and the CAD and Net Foreign Liabilities (Net Foreign Debt + Net Foreign equity).

Also is it likely there will be a question on how less competitive markets will affect on price and two types of efficiency? I saw this on a practice paper and it was extremely difficult because you have to recall knowledge on monopoly or oligopoly market structures which are not in the study design

Hi, from what I can recall the different type of efficiencies are in the course so it is probably fair game (though unlikely to come up).

I would make sure to know the different market structures as well, they have come up in MC questions in the past and are relatively quick to learn. Using these terms in your written responses where relevant will also allow you to show your knowledge.

Spending 15-20 mins on familiarising yourself with these ideas is probably enough.

Cheers

[forbiddensoulxx]

Hey guys, not a Unit 3/4 question, but a 1/2 question. A question is asking factors affecting aggregate supply. Options were;
A) Productivity, costs of production, business confidence
B) Productivity, costs of production, interest rates
C) Consumer confidence, cost of inputs, climatic conditions
D) Business confidence, wage growth, company tax rates

I get why it'd not C or D, and I thought it would be A since business confidence should affect the level of goods and services suppliers are willing to supply, however the answers say its B. I don't understand why interest rates would affect aggregate supply more than business confidence.

[Natasha.97]

Hey guys, not a Unit 3/4 question, but a 1/2 question. A question is asking factors affecting aggregate supply. Options were;
A) Productivity, costs of production, business confidence
B) Productivity, costs of production, interest rates
C) Consumer confidence, cost of inputs, climatic conditions
D) Business confidence, wage growth, company tax rates

I get why it'd not C or D, and I thought it would be A since business confidence should affect the level of goods and services suppliers are willing to supply, however the answers say its B. I don't understand why interest rates would affect aggregate supply more than business confidence.

Hi!
Interest rates affect how much a business can invest in capital equipment, such as machinery and new technology etc. If interest rates were high, businesses are not incentivised to borrow money from the bank, reducing their ability for investment (as they would have to repay more money), and vice-versa.

Hope this helps