Econ 7002 Tutorial 1

ECON 7002 Semester 1 2012 Tutorial egress 1 Tutorial Topic 1 CHAPTER 1 Practise Economics head 2 In light of your answer to question 1, provide some explanations for the appargonnt differences in the relative share of organization expenditure in the countries listed in the higher up table. Governments spend money on social security, health services, infrastructure much(prenominal) as roads, bridges etc, and transfer payments such as unemployment benefits and pensions.The disparity inside the table is parti all(prenominal)y a reflection of the strength of the taxation dodging (without a strong tax system the government will omit the revenue to cover expenditure on the areas noted above) the need for government to replace private investment expenditure and the position of the government inside the economy, that is a planned versus a free economy. In the case of Australia, although it is sort as a mixed economy the relatively high take aim of government expenditure is accounted for by the strong taxation system and gigantic base of social security payments.Conceptual Questions Question 4 What are economic resources? Give some examples of each type of economic resource. Economic resources are also termed Factors of Production and can be divided into Physical and homosexual Resources that can then be broken down further into orbit forests, arable land, minerals and water Labour physical and mental labour capital physical capital such as factories, machinery and infrastructure. Remember MONEY is not an economic resource as it does not produce anything.Entrepreneurship the ability to typeset the various opposite resources together in an innovate manner- also a risk bearer One of the most important points to remember is that all economic resources are scarce and on that pointfore we need to make choices. uninflected Questions Question 3 Graph the data in the table. Are there constant or increasing opportunity costs for the mathematical product of missiles? thither are increasing opportunity costs in the production of missiles because the production of cars falls at a higher rate as larger quantities of missiles are produced. ECON 7002 Semester 1 2012 Tutorial Topic 1 40? manoeuvre? 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 improvement occurs in the engineering science of producing control missiles but not in producing cars. (a) Draw the new production possibilities curve on the diagram that you created in answering question 3. P1 is the received 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 maximum manageable production of cars (8 million) unchanged and an increase in the maximum possible make sense of missiles produced. (b) Now draw a curve that reflects technological improvement in the produ ction of both products. P3 represents an improvement in the technology of producing both cars and guided missiles and therefore an increase in the possible production of both. Discussion Questions Question 3 Comment on the following statement from a ewspaper Our secondary winding school serves a splendid hot meal for a dollar sign without costing the taxpayers anything, thanks in part to a government subsidy. all told government subsidies are ultimately borne by taxpayers. The cost will either result in an increase 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