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August 20, 2019, 01:11:34 pm

Author Topic: Tips for the 2018 economics exam  (Read 686 times)  Share 

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corza000

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Tips for the 2018 economics exam
« on: October 25, 2018, 08:52:15 pm »
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Any final tips for the economics exam? Any predictions on themes or stimulus material?

zofromuxo

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Re: Tips for the 2018 economics exam
« Reply #1 on: October 27, 2018, 01:47:23 pm »
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Any final tips for the economics exam? Any predictions on themes or stimulus material?
Know your statistics, some examples to use for questions and make sure you know how to answer all the type of exam questions given to you (Graphs, Tables, Drawing D/S curves, etc).
Jack of all trades, master of none.
Hence why i'm in all these different threads and boards.

lifeisgood

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Re: Tips for the 2018 economics exam
« Reply #2 on: October 27, 2018, 08:24:26 pm »
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im not exactly sure but there could be questions on the following
1. assessing the extent in which Australia has achieved its three goal SSEG, FE and PS. (in this case it has) and discuss a factor
2. describe the trend (using graphs?) in the CAD, GDP, Unemployment, CPI,
2. recent factors (structural and cyclical) affecting the CAD, boP....at least two for each to be on the safe side
3. relationship between participation rate and unemployment. maybe even the underutilisataion rate.
3. the government budget (the stance, the effect on public debt,
4. evaluation of the effectiveness of macroeconomic demand policies in achieving the goals
5. evaluate the role of a market in allocating resources
6. basic definitions. eg Productivity vs production vs Productive capacity or relative scarcity, opportunity cost ... basically stuff that people may generally ignore.
7. how  a specific market failure may occur and link to a type of effiiency (a must)
8. the need for macroeconomic demand policies.
9. something to do with AS policies and evaluating strengths and weaknesses.
theres more but i cant think of them now.
basically study for everthing but i would particularly practise those 6 to 1o mark questions just to get a structure on how to handle these questions in the exam
lol I cannot count. ;D :P

corza000

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Re: Tips for the 2018 economics exam
« Reply #3 on: October 27, 2018, 10:29:24 pm »
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Thanks lifeisgood and zofrromuxo!

2. I've heard of structural and cyclical factors affecting CAD but not BOP. Are these different?

7. how  a specific market failure may occur and link to a type of effiiency (a must) - Not sure how you can link a market failure to a type of efficiency do you have an example?


Chelsea f.c.

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Re: Tips for the 2018 economics exam
« Reply #4 on: October 27, 2018, 10:43:48 pm »
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Current account and capital sum to zero in Australia and it is the balance of payments structural things I have spoken in forum previously I.e. persistent current account deficits which is not just consumption but also returns to overseas investors... market failure could be negative externality I.e. cigarettes where healthcare costs are not taken into account by smoker i.e. medicare is free allocative efficiency...
Bachelor of Commerce (Honours) Finance - UoM - 2019
Bachelor of Commerce - Economics and Finance - UoM - 2015 - 2018
Diploma in Mathematical Sciences - Statistics and Stochastic Processes - UoM - 2015 - 2018

lifeisgood

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Re: Tips for the 2018 economics exam
« Reply #5 on: October 28, 2018, 01:29:34 am »
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im feeling kind today.. Here are my notes ive practiced writing one on each market failure
Public goods
Public goods refer to goods and services that are non excludable (suppliers cannot prevent a person from using the product even if they have not paid) and non-rivalrous/non-depletable (the consumption of an individual does not reduce the availability of the product for next person). An example of a public good would be public roads and bridges (NOTE Do not use schools or hospital as an example. From what I’ve heard examiners do not classify this as a public good because it is depletable) anyway…in this instance it may be difficult to exclude users from receiving the benefits of these goods. given the nature of public goods this may lead to the free rider problem (people taking advantage of not paying to receive the benefits). The market left without gov intervention will generally underalloacte resources to these goods and services because producers cannot charge its users (enough) to still make a profit and as a result producers will move their resources where profits are higher. Therefore, society is not receiving the benefits that could have been received if more roads and bridges were to be built. [Eg This would have helped to generate employment directly through construction and operations, thus lowering unemployment rates. In addition, investment in roads and railways may lead to an acceleration in the speed and efficiency in which goods and services can move through the economy, hence productivity levels improve, production costs are reduced therefore goods and service become cheaper.  More roads could have improved LS as it could have reduced pollution due to less time being.] In summary allocative efficiency has not been achieved as resources have not been allocated in such a way to provide max benefits for the nation.  try to summarise what’s in square brackets it would simply be too much to write in the exam. If necessary you could also argue that technical efficiency is not achieved.
Negative externalities (production)
Negative externalities occur when the production or consumption of a good or service imposes a cost on a third party not directly involved in the transaction. Coal powered electricity is an example of negative externalities in production. The production of coal powered electricity adds to pollution due to the fossil fuel being produced in the process of producing electricity. This reduces the air and water quality which may cause lung diseases. Overall this may lead to a deterioration in LS. In addition MLS may also worsen as an increase in pollution may create a financial burden (particularly those near power plant) when individuals require additional medical help, thus reducing their ability to purchase other goods.. firms will only consider the potential revenue that can be extracted from customers and compare this with private costs. Given that they are not required to pay additional costs this generally leads to an overproduction of this particular good. Thus resulting in an inefficient allocation of resources where, resources have not been allocated in such a way to provide max benefits to the nation (allocative efficiency is likely to deteriorate.
Negative externalities (consumption)
•   Basically the same
•   (definition)
•   Give example (passive smoking)
•   Discuss negative impact on society
Very similar for the end… Given that the consumer is not required to pay additional costs this generally leads to an overproduction of this particular good. Thus resulting in an inefficient allocation of resources where, resources have not been allocated in such a way to provide max benefits to the nation (allocative efficiency is likely to deteriorate.
Asymmetric info (seller advantage)
Include definition- when there is an imbalance of info between a buyer and a seller
•   Include example. People who visit the dentist would generally be unaware of the state of their teeth. The dentist who is well trained and educated may take advantage of this an suggest an expensive treatment that is not needed. In this case there may be an overallocation of resources to the (production or consumption?) of unnecessary treatment. the consumer may be paying more for something they didn’t need and as a result reduce their ability to access other goods and services that may have benefited them. Therefore the opportunity cost has not been minimised and allocative efficiency (when resources have been allocated in such a way to provide max benefits to consumers) has not been achieved.

Asymetric info (Buyers advantage)
Please forgive me cuz this one is a long one because it covers 2 types of efficiencies I’ve tried to write this one in dot points form
•   Employment contract: those offering labour for payment will know more about their capabilities more than the employer. >>Employer may end up hiring a person who lacks the necessary skills, who is unproductive, or has poor work ethic>>>may lead other problems ie. to moral hazards (individuals change their behaviour once a transaction has occurred)
•   When the worker knows their job is secure >may slack off>means thay are reducing their potential productivity as a result average costs may increase (more workers need to be hired to cover the shortfall or the lazy worker is working longer hours and getting paid more but output is not maximised) and therefore technical effiicieny is compromised and has lead to a less an overallocation of labour/ less efficient allocation of labour
•   Allocative efficiency is not achieved> higher production cost> higher prices> purchasing power is reduced>reduces ability of households to purchase other g &s.
Common Access Goods
Common access goods are goods that do not have a market price and therefore available to everyone. Because it is accessible to everyone and usually not owned by anyone this will naturally lead to excessive consumption of this good [insert example here] which may result in the depletion, degradation and even destruction of the common access resource. Therefore, intertemporal efficiency is decreased because current generation increase their LS at the expense of future generations.
Please forgive me for writing sooooo much. Anyway hoped that helped.
I had trouble writing this at the start of the year but I got the hang of. Here are some advice. Start of a definition if your really stuck. Then discuss the impact on society and then just insert a definition of one of the effiencies that bests matches it.  That’s how I managed to get full marks even when I didn’t know what to do. The most common one to do is allocative efficiency

2. as for The balance of payments question the BOP provides a record of financial transactions between residents of Australia and residents of the rest of the world.it is  made of two major accounts, the Current Account (CA) and the Capital and Financial Account (CAFA).  the CAFA is used to pay the CA. so if the CA is in a deficit the CAFA is in a surplus. both ofset each other making the BOP equal zero. just be careful there could be a question that may ask how a factor effects the BOP in that case you must talk about the CAD and then discuss if the CAFA surplus increases or decreases.

cheers.

headsup

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Re: Tips for the 2018 economics exam
« Reply #6 on: October 28, 2018, 06:51:12 am »
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Heyy!!!!

Looks good... great notes lifeisgood!

Also great tips!
All the very best with it  ;) ;D :D
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corza000

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Re: Tips for the 2018 economics exam
« Reply #7 on: October 28, 2018, 11:14:37 am »
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Wow thanks lifeisgood! you are a star!

Makes sense. And also thanks Chelsea.

:)