Unit 3 AoS 1

Question 1

Unlimited N/W caused by…

Answer 1

1. Recurring (food)
2. Growing expectations of material things
3. Population growth
4. Advertising/trends
5. Planned obsolescence
6. Materialism

Question 2

Factors Affecting Choices of Individuals

Answer 2

• Income
• Taste
• Fashion
• Season
• Gov Policy

FIGST

Question 3

Factors Affecting Choices of Businesses

Answer 3

• Production Cost
• Profit
• Decisions of Rivals
• Community Opinion
• Gov Policy

PROGC

Question 4

Factors Affecting Choices of
Gov

Answer 4

• Election Promises
• Voter Expectations
• Desire to Correct Problems
• Party Values

PVPV

Question 5

PPD can illustrate…

Answer 5

1. Productive Capacity
2. Opportunity Cost
3. Economic Growth
4. Underemp/underutilise
5. Max Eff Res Use
6. Unachiev. Combos

Question 6

Assumptions of he PPD

Answer 6

1. Nation can only produce 2 types
2. Full use of scarce resources
3. Fixed volume of resources at time
4. Most Eff Produc Method Used

Question 7

Describe Pure/Perfect Comp

Answer 7

1.5

Question 8

Describe Monopolisti Comp

Answer 8

1.5

Question 9

Describe Oligopoly

Answer 9

1.5

Question 10

Describe Pure/Perfect Monopoly

Answer 10

1.5

Question 11

Assumptions of a Free Market

Answer 11

1. Strong Comp&raquo_space; No Market Power
2. Consumer Sovereignty
3. Homogenous Products
4. Profit Max + Rational Behav
5. Mobile Resources
6. Perfect Market Knowledge Exists
7. Ease of Entry/Exit

Can Charlie Ever Have Microwaved Popcorn Kernels?

Question 12

Strong Comp is Good because…

Answer 12

1. Efficient Resource Allocation
2. Better Quality GnS
3. Lower Prices
4. LS up
5. Improved Intercomp
6. More GnS Output

Even Quiet Princes Love International Output

Question 13

Too much Comp is Not Good Because

Answer 13

1. Aggressive Cost Cutting
2. Small Businesses with low sales volume can not gain EoLSP

Question 14

How Market Decides 3 Econ Questions

Answer 14

1.6

Question 15

Process of Decision Making

Answer 15

Relative Scarcity»
1. Buyers/Sellers Negotiate Equil
2. Equil Shifts with NPC
3. Relative Prof Changes Overtime
4. Resource Owners Make Decisions

Question 16

Theories behind Law of Demand

Answer 16

1. Income Effect
2. Substitution Effect
   1.6

Question 17

Theories behind Law of Supply

Answer 17

1. Profit Motive
   Consideration of OC

Question 18

NPC of Demand

Answer 18

1. Changes in Dispose Income
2. Population
3. Fashion/Trends
4. Interest Rates
5. Substitutions
6. Complementary
7. Consumer/Business Conf
8. Seasons
9. Gov Policy

Question 19

NPC of Supply

Answer 19

1. Production Costs
2. Tech/Productivity
3. Climatic Conditions
4. Gov Policy

Question 20

Determinants of PED

Answer 20

1. Degree of Necessity
2. Availability of Subs
3. Time Period
4. Proportion of Income

I NEED to WAIT for the EXPENSIVE SUBSCRIPTION

Question 21

Determinants of PES

Answer 21

1. Product Storability
2. Avail of Spare Capacity
3. Time Period

Question 22

Significance of PED/S

Answer 22

1. Pricing Policies of Sellers
2. Raising Gov Rev

Question 23

5 Types of Market Failure

Answer 23

1. Abuse of Market Power
2. Asymmetric Info
3. Externalities
4. Failed Provide of Public GnS
5. Common Access Resources

Question 24

Solution - Abuse of Market Power

Answer 24

1. Dereg. Key Markets
2. Free Trade
3. Promote Price Comp and Reg. Monopolies

Question 25

Solution - Asymmetric Info

Answer 25

1. Full Product Disclosure 2. Gov Info Campaigns

Question 26

Solution - Externalities

Answer 26

1. Laws reduce Neg Extern 2. Indirect Taxes reduce Neg Extern 3. Subsidies Influence 4. Gov Direct Provide Social Desire GnS 5. Edu Campaign to Influence Behav

Question 27

Solution - Failed Provide of Public GnS

Answer 27

1. Budget

Question 28

Solution - Failed Common Access Resources

Answer 28

1. National Parks 2. Laws (Fishing) 3. International Agreements (CO2) 4. Taxes/Subsidies (Made in Aus)

Question 29

Examples of Gov Failures in Intervenion

Answer 29

1. Setting Minimum Wages 2. Encourage Home Ownership 3. Subsidies for FF