Reference no: EM132649890

HC1072 Economics and International Trade Tutorial Questions Assignment - Holmes Institute, Australia

Purpose of the assessment and linkage to ULO - This assignment is designed to assess your level of knowledge of the key topics covered in this unit.

Unit Learning Outcomes Assessed:

- Develop a broad understanding of the principles of macro and microeconomics in an economy.

- Analyze economic environment nationally and internationally and its influence on business and national economic performance.

- Critically analyze government's fiscal and monetary policy and their influences on the economy and business in general.

- Comprehend how economies benefit from international trade.

- Synthesize theoretical and practical knowledge of economics for application in work-life situations.

Assignment Specifications -

Question 1 - Stated below are 8 Economic Principles that we have covered in this unit. Select any 2 (out of 8) and explain the application of the principle by providing real life examples.

Principle 1: People face trade-offs.

Principle 2: The cost of something is what you give up to get it.

Principle 3: Rational people think at the margin.

Principle 4: People respond to incentives.

Principle 5: Trade can make everyone better off.

Principle 6: Markets are usually a good way to organize economic activity.

Principle 7: Governments can sometimes improve market outcomes.

Principle 8: A country's standard of living depends on its ability to produce goods and services.

Question 2 - Draw a graph of market equilibrium. Explain what the equilibrium point means. On the same graph, draw a condition of surplus. Discuss what surplus means by answering the following sub-questions. a) Describe the behavior of buyers and sellers in times of surplus. b) From your surplus price describe what will happen to the market price.

Question 3 - Compare and contrast Accounting Profit versus Economic Profit. Can firms who earn zero economic profit continue to operate? Provide an explanation for your answer.

Question 4 - Describe and compare the level of price control within the four market structures. Identify the market structure/s where a firm can be a price-maker. If the firm is a price-maker, then the company will always be profitable. Explain why you agree or disagree with his statement.

Question 5 - Cite and discuss the phases of a full business cycle with respect to GDP and unemployment.

Question 6 - The Australian government has taken several actions to manage the economy in response to the corona virus. Select any 2 actions and classify whether they fall under Fiscal Policy or Monetary Policy by stating the tools used and the desired effect of the action. Does an economy need both Fiscal and Monetary Policy? Support your answer by enumerating the limitations of each policy.