course material

1. economic – linking theory to practice’
economic essay – linking theory to practice’ EconomicsQuestion 1:The profit motive is an
essential ingredient of a market system. According to theory the pricemechanism in a free
market economy is an efficient distributor of goods and services. In practice,does the price
mechanism always distribute goods and services to those who need them?Establish the
meaning of the term market failure. Investigate an instance of market failure in
theAustralian economy. In your essay, identify the economic reasons for the market failure
and alsorecommend some strategies for dealing with these failures and turning the
business around.Criteria Q1Introduction to chosen essay topic, adhering to word count,
structure of the essay and APM cover pageStudents should be able to provide definitions for
“ the profit motive and the price mechanism” .Students should be able to demonstrate a
working knowledge of how the price mechanism works in afree economy.Students should
provide a valid explanation to support their answer to the question “ Does the
pricemechanism always distribute goods and services to those who need them?” Introduce
and link Adam Smith’ s theory to this question. Can use examples to support this.Definition
of Market failure and externalitiesExplain, using examples externalities and how it relates to
this question (introduction of governmenthere)Reference List and AppendixQuestion
2:Discuss and compare the four market structures covered in this unit. Include in your
discussionthe issues of competitors, barriers to entry, pricing and output decisions for
firms, pricedeterminations and price discrimination, economic profit in the short and long
run, resourceallocations, profit maximisation and cartels. Included in your analysis, please
discuss whetherOPEC is a form of cartel when it comes to regulating the world oil prices.
What would be thebenefits to member of OPEC and identify whether there are any
advantages of having anorganisation like OPEC in the interests of the consumers.Criteria
Q2Introduction to chosen essay topic, adhering to word count, structure of the essay and
APM cover pageStudents should be able to identify and explain the four market
structures.Students should be able to explain for each market
structure:? competition? barriers to entry? pricing and output decisions? resource
allocations? profit maximisation? cartelsStudents should be able to explain OPEC and
identify whether this is an example of a cartel or not,giving reasons to support their
answerStudents need to identify the benefits to members of OPEC (if any), This must be
discussed from therole of the government, consumer and oil/energy business.Question 3:Do
you agree with government intervention in the market to regulate prices? Discuss
usingexamples the various forms of government regulation in Australia and whether this

2. intervention isa positive or negative thing for the economy. (Please think of this situation
wearing youreconomics hats).Criteria Q3Introduction to chosen essay topic, adhering to
word count, structure of the essay and APM cover pageStudents need to answer the
question “ Do you agree with government intervention in the market toregulate prices?”
Support theory and examples need to be provided here.Students need to identify the
various forms of government regulation in Australia and state the effectson the economy
using examples.Referencing and indexingQuestion 4:Critically analyse inflation and its
consequences, including the meaning of real and nominalinflation and how inflation is
measured. The discussion should include reference to the ConsumerPrice Index, what it is
and how it relates to inflation, including any criticisms of the index. You canbase your essay
on the inflation statistics for Australia over the last five years.4HEP: NSW5028 | CRICOS
Provider Code: NSW 00246MCriteria Q4Definitions and explanations for all types of
inflation and consumer price index. Create a link betweenboth.Role of the government in
managing inflationRelationship between interest rates and inflationCriticisms of the CPI
(Consumer Price Index)Role of the GDP deflator and an explanation of what it is.Explain the
Fisher effect and the Quantum theory of money.Guidance for writing essaysGeneral Points1.
Identify the instruction words: e.g. Investigate/ Research/Explain2. Identify key words in
the question eg. price mechanism, consumer price index etc.3. Identify any terms which
need to be defined e.g. market, price discrimination.4. Remember DEEDA alternatively
DADA. This is a way to check you have covered all the mainrequirements of the
question.Define – have you defined all essential terms?Explain – is your explanation
clear?Example – is an example asked for in the question or would an example help your
explanation?Diagrams – are diagrams asked for in the question? Remember to use
diagrams /graphs wherepossible to help explain your argument.Analyse – is your analysis
clear and does it focus on the questionOR(Define, Assumptions, Diagrams, Analysis)