Econ 7002 Tutorial 1

ECON 7002 Semester 1 2012 tutorial carnal 1 Tutorial Topic 1 CHAPTER 1 Practise economicals question 2 In light of your adjudicate to question 1, provide virtually explanations for the ostensible differences in the relative sh be of political relation phthisis in the countries listed in the supra table. Governments spend money on amicable security, health services, infrastructure such as roads, bridges etc, and transfer payments such as unemployment benefits and pensions.The disparity within the table is part a reflection of the strength of the revenue enhancementation system (without a beardown(prenominal) tax system the governance pull up stakes deprivation the revenue to cover expenditure on the atomic arrive 18as noned above) the need for government to supplant private investment expenditure and the authority of the government within the economy, that is a aforethought(ip) versus a free economy. In the baptistry of Australia, although it is classified as a mingled economy the relatively high direct of government expenditure is accounted for by the strong taxation system and broad base of social security payments.Conceptual indecisions Question 4 What be economic resources? Give some examples of each type of economic resource. Economic resources are also termed Factors of Production and cigaret be divided into Physical and homophile Resources that can then be downcast down further into Land forests, arable land, minerals and water Labour physical and intellectual labour Capital physical keen such as factories, machinery and infrastructure. Remember cash is NOT an economic resource as it does not produce anything.Entrepreneurship the ability to typeset the various other resources together in an innovate manner- also a venture bearer One of the most grievous points to remember is that all economic resources are scarce and in that locationfore we need to induce choices. Analytical Questions Question 3 chart the data in the table. Are there constant or increasing prospect costs for the occupation of missiles? There are increasing opportunity costs in the proceeds of missiles because the outturn of cars falls at a high rate as larger quantities of missiles are produced. ECON 7002 Semester 1 2012 Tutorial Topic 1 40? control? Missiles? (thousands)? 35? 30? 25? 20? 15? 10? 5? 0? 0? 2? 4? 6? Cars? (millions)? P1? P2? P3? 8? 10? 12? Question 7 Suppose overture occurs in the applied science of producing guided missiles barely not in producing cars. (a) Draw the new production possibilities weave on the diagram that you created in answering question 3. P1 is the original PPC and P2 represents an improvement in the technology of producing guided missiles but not in the production of cars.The production possibilities curve therefore rotates clockwise with the uttermost possible production of cars (8 million) unchanged and an ontogenesis in the maximum possible number of missiles produced. (b) Now draw a curve that reflects technological improvement in the production of both products. P3 represents an improvement in the technology of producing both cars and guided missiles and therefore an emergence in the possible production of both. raillery Questions Question 3 Comment on the following statement from a ewspaper Our standby school serves a splendid earnest meal for a dollar without cost the taxpayers anything, thanks in part to a government subsidy. All government subsidies are ultimately borne by taxpayers. The cost pass on either result in an gain in taxes to pay for the subsidy or some other government expenditure must be forgone, or the government will spend newly created money, which will be inflationary and thus be paid for by taxpayers through higher prices for other goods and services. Thus, this statement is incorrect. 2