economics for decision making

ECO10250: Assessment details S2 2018

The assessment for this unit consists of two assignments and a final examination. The assessment is designed to test your understanding of issues and principles raised in the topics being studied.

The first assignment consists of five questions based on topics covered in the early part of this unit. The second assignment is a report on the Australian economy. The purpose of these assignments is to give you the opportunity to demonstrate the skills you have acquired in this unit. You will need to start gathering information for the second assignment almost immediatelythe session starts.

Assignment due dates and the examination period provided here apply to the Australian study period. These may be varied for students studying elsewhere, please confirm dates with your local tutor.

you should keep a copy of all submitted materials. It is important that you that you keep your receipt from Turnitin (it is sent to you once you submit your assignment) and make sure your score is acceptable. You will be able to check your Turnitin score more than once but be aware the first time you submit your assignment you will receive a score very quickly however your subsequent results may take up to 24 hours to get to you..

References and Referencing

You will be required togather information for your assignments and it is important to be aware that material posted on the web may not always be reliable. You are advised to carefully consider the authenticity of all sources of the information before using it in assignments.

It is also important to use Harvard-style referencing for ALL material used in your work.

School of Business and Tourism Extension Policy

It is VERY important that YOU make yourself aware of the School’s Extension Policy and Special Consideration Policy.

Students wanting an extension MUST make a request at least 24 hours before the assessment item is due and the request must be received in writing via email by the unit assessor or designated academic.

Extensions requested within 24 hours of the submission date or following the submission deadline WILL NOT be granted (unless supported by a doctor’s certificate or where there are exceptional circumstances – this will be at unit assessor’s discretion and will be considered on a case by case basis). Extensions will be given for a maximum of 48 hours (longer extensions supported by a doctor’s certificate or exceptional circumstances will be considered on a case by case basis).

A penalty of 5% of the total available marks will accrue for each 24 hour period that an assessment item is submitted late. Therefore an assessment item worth 20 marks will have 1 mark deducted for every 24 hour period.

Students who fail to submit their assignments according to the correct guidelines provided above will be deemed to have not submitted their assessment item and a penalty will be applied until the correct submission guidelines are followed.

Re-submissions and re-sits

In this unit there are no provisions for re-submitting assignments. If you have failed the unit after completing all three assessment items, there is an opportunity to re-sit the exam. The following conditions apply in this case:

• If you take up this option, the exam outcome (a pass or a fail) will be used as the sole determinant of your final result for the unit.

• The ability to re-sit the exam will only be open to you if you have submitted ALL assessment items.

• For any student who takes up this option a pass will be the highest result achievable.

Assignment 1

Due: 7pmTuesday,6August, 2018(Week 6)

Weighting: 25%

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 labelledgraphs wherever possible. Always provide a brief explanation of each graph, including how it relates to your overall answer/argument.

Question 1 (10 marks)

a. 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:

	Choices
Production possibilities	Grade (%)	Work (hours per week)
A B C D E	0 20 40 60 80	60 55 45 30 0

From the figures in the table above:

i. Plot the production possibility curve for Joan. (1 mark)

ii. 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)

iv. What would be happening if Joan’s combination of her grades and hours of work per week were below the curve asplotted above in Q1ai? (1 mark)

v. How could Joan push her combination of her grades and hours of work per week past the current curve? (2 mark)

b. After a periodof goodgrowing weatherAustralia produced a plentiful wheat crop- does this mean that it will not have a scarcity problemin regards to wheat? Provide reasons for your answer (300 words maximum).

(2 marks)

Question 2 (10 marks)

In February2018, it was reported that Australia’s solar power capacity could almost double in a year.

a. Use demand and supply curves to show the doubling ofcapacity. (3 marks)

b. 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)

c. Use demand and supply curvesof 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)

a. Explain in your own words, using demand and supply curves, the concepts of consumer and producer surplus.(3 marks)

b. Using demand and supply curves describe and illustrate what would happen to consumer and producer surplus if solar power capacity is increased.(4 marks)

c. 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)

a. 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)

Price ($)	Quantity demanded	Total revenue ($)	Percent change in price	Percentage change in quantity demanded	Elasticityvalue	Assessment of Elasticity
0.50	16
1	13
1.50	10
2.00	7
2.50	4
3.00	1

b. Do you think the price elasticity of demand for hot doughnuts in summer would be the same as in winteror would it become more elastic or more inelastic? Explain your answer.(3 marks)

c. What would you expect the price elasticity of demand for cigarettes to be? Explain your answer. (2 marks)

Question 5(10 marks)

ai. 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 (ATC) $	Marginal Cost (MC) $	Total Revenue (TR) $	Average Revenue (AR) $	Marginal Revenue (MR) $	Profit $
0	100.00		100.00
1			220.00
2			300.00
3			390.00
4			530.00
5			690.00

(4 marks)

ii. 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 companyproduce in order to maximise profit? Explain your answer.(2 marks)

iii. Graph the average total cost, marginal cost, average revenue and marginal revenue curves.(2 marks)

b. 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)

3