Question 1:
You are an Economist and have been asked by the Gold Coast Council of Queensland to provide advice on the policy options to deal with the increasing use of jet skis on the Broadwater. The increasing use of jet skis has had an adverse effect on other water uses and people who live in the near vicinity have complained about the excessive noise.
Question 2:
You are an Economist advising the Federal Government about the Australian Labour Market and issues relating to unemployment. The issues that you have been asked to report are:
a) if the labour market is working properly why does Australia experience simultaneous periods of unemployment and job vacancies?
b) does the minimum wage prevent lower rates of unemployment?
c) what types of unemployment are the most serious? Explain your answer.
Rationale
The questions address the following learning outcomes:
- be able to apply demand and supply analysis to make a range of market related decisions
- be able to explain and defend why it is important to understand the structure of the market in which a firm operates
- be able to critically examine and demonstrate why it might be necessary for government to intervene in the production of goods and services and in the distribution of income
- be able to examine critically the health of the economy as a whole through analysis of major economic variables and advise on likely policy alternatives
In your working life you will be required to present arguments and explain your decisions. Economics gives you tools to do this. However, many of those with whom you work will have little, if any, understanding of the principles of economics and their application. To communicate with these people you will have to put your arguments succinctly into language that they understand. This does not mean that your argument is any less rigorous or sophisticated. Rather, it means that you are being asked to communicate important concepts and decisions in a manner that most people can understand. We see this as the most important result of your study of this subject and therefore a passing mark (50% to 64% depending on the quality of your answer) on any question will require that you are able to successfully explain to the lay person (one who has not studied economics) the issues associated with any question. Thus in the first part of an answer to any assessment question in this subject you will be required to summarize, in a non-technical manner, the essence of a correct answer.
Of course, you will need to know and understand the relevant theory and associated diagram(s)/model(s) on which you are basing your answer. Thus in the second part of your answer to any question you will be required to correctly outline the basic theory - including the construction and explanation of the diagram(s)/model(s) associated with it. This ability to theorize will indicate your ability to place the issues raised in the question into an appropriate theoretical/abstract context from which to further examine the economic issues and to draw appropriate conclusions. You should then correctly utilize the diagram(s)/model(s) to illustrate the changes to the diagram(s)/model(s) that the circumstances discussed in the question imply. This will illustrate your ability to manipulate the tools of economics. Finally you must come to a conclusion using the diagram(s)/model(s), the impact of the change on variables and issues of concern, determine if a response is required (by business or government), what that response should be and predict the impact of that response in both the short-run and the long-run.
Presentation
Answers should be typed and diagrams must be clear and neat and preferably drawn electronically. Hand-drawn diagrams are acceptable. The answer to the question should be divided into three parts:
Part 1
Introduction
Provide in 'everyday language' and without reference to diagrams a summary of a correct answer to the question asked. This summary should include a succinct description of the point from where the analysis commences, the initial impact of the change in economic circumstances discussed in the question, identification of the problem(s)/issue(s) these changes create, the likely business/policy measure(s) taken in reaction to these changes, the short run and long run results of the measure(s) employed and a brief evaluation of the measures taken.
Part 2
Analysis
Complete Part 1 and be able to recognise the correct economic theory and the associated diagram(s)/model(s) for the analysis. Be able to explain the basics of the theory and of the construction of the diagram(s)/model(s) and identify the appropriate equilibrium starting point in the context of the diagram(s)/model(s). Be able to identify the initial change in the diagram(s)/model(s) that results from the change in economic circumstances discussed in the question.
Part 3
Conclusion
Complete Part 2 and using the diagram(s)/model(s) correctly identify the economic problem(s)/benefit(s)/issue(s) created by the change in economic circumstances and analyse if business/government should respond, what the response should be and, if a response is made, analyse the effectiveness of the response by reference to the diagram(s)/model(s) in the short-run and long-run.
Each part should be carefully labelled.