Economics Reflective Assessment 1 – Australia.

Unit Title : Economics Reflective
Assignment Type : Assessment 1
QUESTION 1
John was chatting with his friends about his future and told them that he had three options. He could take a gap year, work full time or attend University.  He said he decided to go to University.
a. Define and explain the opportunity cost of John’s decision to go to University. 
b. Describe an occasion where the concept of opportunity cost applied to you. 1
Economics Reflective Assessment 1 – Australia.

Economics Reflective Assessment 1 - Australia.

QUESTION 2 :
a. Using an example, explain the importance of the “ceteris paribus” assumption. 
b. Assume the amount of beer consumed in the pubs of Melbourne and the amount of rice eaten in the Melbourne restaurants have both been increasing over the last 20 years. Use these two events to high light the difference between the concepts of correlation and causation.

QUESTION 3 :
Mike, whilst walking along Collins Street came across a shop selling the “JOYRIDE” technology based NIKE running shoes considered superior by the world’s best athletics.  Although Mike already owns four pairs of NIKE runners, he decided to buy the new runners.

Feeling please with himself Mike went to the pub for a beer.  It was “Happy hour” at the Pub and the beers were 30 percent cheaper.  Mike drank three beers rather than his usual two beers.

a. Use demand and supply graphs illustrate and explain, which paragraph relates to the concepts below.
i. Change in quantity demanded”
ii. Change in demand”
b. Reflect on an occasion where the concepts in question 3 a applied to you      

Economics Reflective Assessment 1 – Australia.

Economics Reflective Assessment 1 - Australia.

QUESTION 4
a. Ceteris paribus, even though the demand for watermelon is higher in summer when watermelons are in season the price of watermelons are lower in summer. Use demand and supply graphs to illustrate and explain why this is so.  
b. Reflect on an occasion you have experience a similar situation as in the question. 

QUESTION 5 
Ceteris paribus, at the same time when the demand for yoga service has increased in Malaysia, the government of Malaysia introduced strict regulations resulting in a fall in the number of yoga service providers. Use demand and supply graphs illustrate and explain the impact on the equilibrium price and quantity in the market for yoga service? (HINT:  There is more than one possible outcome).

QUESTION 6
 a. The Singapore government is presently debating as to whether it should introduce a minimum wage for labour.  Use demand and supply diagram to illustrate and explain the possible impact of such an action on the labour market.
b. Reflect on two public goods you have used.  Explain why they are public goods.        

QUESTION 7
a. Assume, with the arrest of many heroin dealers, the police have been successful in reducing the amount of heroin in the market.  Use demand and supply graph(s) and the concept of the price elasticity of demand; explain the impact on the price and quantity of heroin if the:

Economics Reflective Assessment 1 – Australia.

Economics Reflective Assessment 1 - Australia.

i. Demand curve for heroin is elastic            
ii. Demand curve for heroin is inelastic.        

c. Suppose the price elasticity of demand for cigarettes is -0.30 and that Australians purchase about 15 billion cigarettes a year. If the price of cigarettes increased by 30%.  What would be the effect on the quantity of cigarettes demanded?
d. How can the concept of the price elasticity of demand help you to increase the total revenue of your business?        

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