Answer the following:
Question 1: "Economic models are false and so government should ignore their predictions." Explain, discuss and evaluate the accuracy of this statement.
Question 2: Using the economics or other literature (but not the textbook) to identify estimates of the price elasticity of demand for at least three different products. Provide full citations for the employed literature. Comment on the magnitudes of these estimates in relation to the standard economic determinants of the price elasticity of demand.
Rationale - The question addresses the following learning outcomes:
- be able to apply demand and supply analysis to make a range of market related decisions
- be able to identify and critically evaluate opportunities for specialisation and exchange.
- be able to make decisions that incorporate the relevant benefits and cost analysis
Following book should be used for this assignment:
Hubbard, G., Garnett, A., Lewis, P. and O'Brien, T. (2015) Essentials of Economics, Pearson Australia: Frenchs Forest; and the associated MyEconLab to accompany the text.