Draw a well labelled graph showing the demand curve, supply curve and equilibrium point. Draw and label on the graph a binding price floor, what may this cause? Draw and label on the graph a binding price ceiling, what may this cause? Explain in words and with the use of a well labelled graph the effect of the government placing a tax on the seller. Explain in words and with the use of a well labelled graph the effect of the government placing a tax on the buyer. If the price of droids increases from $20 to $24 and the quantity demanded of droids falls from 4000 to 2800, find the price elasticity of demand. Is the price elasticity of demand for droids elastic or inelastic? Why? What does it mean if the price elasticity of demand is unit elastic"? What will be the likely elasticity of a luxury good? 1:06 am Mon 5 Feb 7 K Previous (e) Switch To Light Mode What will be the likely elasticity of a necessity good? (f) What will be the likely elasticity of a good with close substitutes? (g) State one of the factors that determines price elasticity of demand (h) Explain, "income elasticity of demand" (i) Explain, price elasticity of supply" MARKET STRUCTURES 3. (a) What are the features of a perfectly competitive market? (b) With the aid well labelled graphs explain the shape of the demand curve for an individual firm in a perfectly competitive market and why is it shaped this way? 4. (a) What are the features of a monopoly? (b) What is a natural monopoly? How can a natural monopoly occur? MAXIMISING PROFITS 5. (a) a (b) Explain using a well labelled graph showing all cost curves, how a firm in perfectly competitive market can maximise profits. When will a firm in a perfectly competitive market make a profit in the short run? 56% 4 Dashboard Calendar 0= To Do Notifications Inbox Next 1:07 am Mon 5 Feb K 7 Previous run? (c) (d) Switch To Light Mode When will a firm in a perfectly competitive market make a loss in the short run? When will a firm in a perfectly competitive market shut down in the long 6. Explain using a well labelled graph how a monopolist can maximise profits. TRADE 7. (a) advantage. (b) Explain the difference between absolute advantage and comparative A country should specialise and trade in a good which it has a comparative advantage. What are the benefits to the country by trading? (c) Why do countries place trade restrictions on some goods? MONEY 8. (a) What are the three functions of money? (b) Which organisation in Australia is responsible for maintaining a stable financial system? (c) Explain what the effect is if the RBA buys government securities. (d) Explain what the effect is if the RBA sells government securities GDP 9. (a) What does GDP represent? (b) What does the formula Y = C + I + G + NX calculate? (c) What do the components C, I, G and NX represent? (d) Given the data about the economy in the table below, calculate the GDP using the expenditure approach (show working) Tax revenue $ 500 million 56% 4 Dashboard Calendar 0= To Do Notifications Inbox Next 1:07 am Mon 5 Feb K 7 Previous Tax revenue Switch To Light Mode $ 500 million $ 400 million Household consumption Investment $ 350 million Government expenditure $ 250 million Exports $ 100 million Imports Government transfer payments $ 200 million| $ 300 million (e) What are the advantages and disadvantages of using GDP to measure economic wellbeing? (f) Explain the difference between nominal GDP and real GDP. (g) What is GDP per capita? Why may GDP per capita be a more appropriate than real GDP to indicate living standards in a country? (h) What does GDP deflator measure? CPI 10. (a) What is the CPI? What does it measure? How is it calculated? (b) (b) What is deflation? Inflation rates can be determined from both CPI and GDP deflator. Explain how the CPI and GDP deflator differ. (c) What are some of the problems or biases when using CPI? (d) If in the economy the unemployment rate is 5%, the nominal interest rate is 4% and the inflation rate is 1%, calculate the approximate real interest rate. UNEMPLOYMENT 56% 4 Dashboard Calendar 0= To Do Notifications Inbox Next 1:07 am Mon 5 Feb K 7 Previous UNEMPLOYMENT 11. (a) Switch To Light Mode Briefly explain what is meant by the following terms; natural rate of unemployment employed, unemployed labour force (b) Give two examples of a person who is not in the labour force (c) What are the three types of unemployment? (d) Describe each type of unemployment and the reason each is caused. (e) Write the formula that is used to calculate the unemployment rate. (f) Calculate the unemployment rate based upon the following figures: Employed Unemployed 13,000,000 1,000,000 Not in the Labour Force 2,000,000 Adult Population Total Population 16,000,000 |20,000,000| (g) Describe some weaknesses of the unemployment rate as a measure. (h) A government may implement a minimum wage policy. Describe in words what this may cause and show on a graph. 56% AGGREGATE DEMAND & AGGREGATE SUPPLY 12. (a) Draw an AD-AS diagram and correctly label both axes, the aggregate demand curve AD, the short run aggregate supply curve SRAS, the long run aggregate supply curve LRAS and the equilibrium point. (b) If interest rates increase then households and firms will have less money to spend, and the Aggregate Demand will decrease. Show the impact of this Next 4 Dashboard Calendar 0= To Do Notifications Inbox 1:07 am Mon 5 Feb K 7 Previous (b) Switch To Light Mode shock on a graph and the effect on prices and output in the short run. Then if the economy is allowed to adjust on its own, explain and show what happens to prices and output in the long run. Show on a graph how if the SRAS curve shifts left, higher price levels and lower GDP can result. What term describes this situation? 13. Write each of the following words or phrases in the correct column in the table: costs of production, technology, income tax, sales tax, interest rates, transfer payments, level of workers' productivity, cost of imported raw materials, government spending, expectations about inflation, wage award, net exports. Shifts AD Shifts AS MONETARY and FISCAL POLICY 14. (a) What is monetary policy? (b) (c) Who implements and is responsible for monetary policy? Assume that an economy is initially in the long 56% 4 Dashboard Calendar To Do Notifications Inbox Next 1:07 am Mon 5 Feb 7 K Previous (c) (d) Switch To Light Mode Assume that an economy is initially in the long run equilibrium. Use the Money Market diagram and Aggregate Demand diagram to show and explain the impact of an expansionary monetary policy on interest rate, output, and price levels._ Assume that an economy is initially in the long run equilibrium. Use the Money Market diagram and Aggregate Demand diagram to show and explain the impact of a contractionary monetary policy on interest rate, output, and price levels.__ (e) What is fiscal policy? (f) Who implements and is responsible for fiscal policy? (g) What are the two instruments of fiscal policy? (h) Explain the "multiplier effect" (i) Explain the "crowding out effect" 56% 4 Dashboard Calendar 0= To Do Notifications Inbox Next