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Unformatted text preview: Short answer Questions. Assignment Week 5 You will be asked to write an answer to one of these questions in you tutorial class in Week 5. The writing task will last 30 minutes and is worth 15% of the total mark for the course. Please note you will have to prepare all of these questions as the question will be assigned to you on the basis of your tutorial. You will not get to choose your question. 1. What is meant by the term “opportunity cost? How does the Production Possibilities Curve reflect the Law of Increasing Opportunity Costs? What do the points on the production possibility curve indicate? Use a carefully labelled diagram in your answer, 2. What is meant by the term” elasticity of demand? What are the major determinants of price elasticity of demand? Explain the effect each has on the estimated value of elasticity. 3. Why does the government impose rent control in a rental market? Use the demand and supply model to help explain the result of this interference in the market. Describe two other policies you could suggest that would achieve the objectives of the government? 4. Use a carefully labelled demand and supply model to show the impact on equilibrium price and quantity of an increase in the cost of production of a good. Explain the process of adjustment to equilibrium in your answer. ...
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- Three '11