# Econ Individual Assignment

Answer all five (5) questions. Maximum of 400 words for each question. Use diagrams where appropriate to enhance and explain your response. Provide supporting evidence and references where applicable to justify your arguments. Your response should always be firstly identifying what part of theory the question relates to and explaining that theory, how the theory helps to answer the question and then presenting the solution to the question posed.

Question 1. The Covid-19 pandemic in early March has resulted in shortages of toilet paper, rice, flour, pasta and many other household items, and it took some time before supermarket shelves returned to normal. Explain why there were shortages of these products using demand and supply. You can pick one particular item or more to explain your answer.

Question 2. Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

Question 3. Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?

Question 4. For a high-income economy like Australia, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middleincome country such as India? A low-income country such as Afghanistan?

Question 5. Imagine that the government statisticians who calculate the inflation rate have been updating the basic basket of goods once every 10 years, but now they decide to update it every five years. How will this change affect the amount of substitution bias and quality/new goods bias?

Presentation

The following points are a general guide for presenting assessment items.

• Responses to assessment items should be typed. Use 1.5 spacing.
• Use a wide left margin. Markers need space to be able to include their comments. Use           a standard 12pt font such as Times New Roman, Calibri or Arial.
• Left- justify body text.
• Include a separate title page with your name, student number, subject code, assessment      Number your pages (except the cover page).
• Use a header or footer with your name and student number on each page.
• Always keep a copy of your assessments. Both a hard copy and an electronic copy.
• Most importantly, always use your spelling and grammar checker, but remember that this does not pick up all errors. You must still manually and carefully edit your work.
• You need to appropriately reference all the articles, reports and web-sites you employ in developing your assignments.

Please see the next page for the assignment marking criteria.

Marking criteria for the assignment

 Criteria HIGH DISTINCTION DISTINCTION CREDIT PASS FAIL 85%-100% 75%-84% 65%-74% 50%-64% < 50% Work applies principles of Applies correct economic Applies correct economic Applies correct economic Applies correct Applies limited or no economics correctly to realistic principles, analysis is principles, description is principles, description is economic principles, understanding of relevant situations. substantiated with workings, substantiated with workings, substantiated with workings, shows workings and principles. Working and and calculations in order to and calculations in order to and calculations in order to calculations but calculations are either not arrive at the right answer. There arrive at the right answer. arrive at the right answer. There contains some errors. shown or contain major are negligible errors/no errors in There are negligible are minor errors in calculations. errors. calculations. errors/no errors in calculations. Use diagrams in your answers to Diagrams created by students Diagrams created by Diagrams created by students Diagrams created by No diagrams provided or provide a more comprehensive are correctly and precisely students are correctly and are correct with an attempt at students are mostly they are incorrect, poorly response. labelled, relevant to the specific clearly labelled, relate to the labelling that maybe correct with an attempt labelled or irrelevant to the question, and used appropriately specific questions and unclear/incorrect, and at labelling, are specific question. The to demonstrate their high-level demonstrate a clear demonstrate an understanding of relevant to the specific diagram fails to understanding of all key understanding of all key most of the key economic question, and demonstrate the students economic concepts and economic concepts and concepts and principles required demonstrate some understanding of economic principles. principles. in this task. understanding of basic economic concepts and principles. concepts and principles. Work applies principles of Principles are applied in the Principles are applied in the Principles are applied in the Discussion reflects Principles are not applied economics correctly in appropriate manner to arrive at appropriate manner to arrive appropriate manner to arrive at basic understanding of appropriately; correct discussing results, conclusions, the correct answer. Written at the correct answer. the correct answer. Written relevant principles. answer is not provided. and/or recommendations. work shows analysis in order to Written work attempts to work shows the ability to Some inclusion of Written work does not interpret and make highly analyse, and shows the interpret and make relevant make suitable/relevant complex recommendations ability to interpret and make some key recommendations to recommendations. recommendations to relating to economic principles recommendations to economic principles covered in economic principles covered in economic principles covered this subject. covered in this subject. this subject. in this subject. Information, spelling, grammar Pass and written expression is set out Sustained, consistent and logical presentation of work. Structure of work does not demonstrate a consistent and logical presentation in a coherent manner, with Accurate spelling and grammar, excellent written expression and syntax. format. Inaccurate spelling and use of grammar, inconsistent written professional presentation. Appropriate use of font, formatting, diagrams etc., where relevant. Appropriate referencing of articles and web-sites. expression. Incomplete or inaccurate referencing.