General Thoughts: Economics (2 Viewers)

[lochnessmonsta]

Here are the answers for the MC 2013 paper are: (please correct me if you think any are wrong)

1. A
2. B
3. B
4. C
5. A
6. C
7. A
8. A
9. C
10. D (However, a bit ambiguous as we are not given any information about the financial account, so could be B)
11. A
12. B
13. C
14. B
15. B
16. D
17. B
18. A
19. A
20. B

3 is C, because there is less inequality
18 is D, because increase in oil supply -> lower cost of oil -> lower headline inflation
19 is D, that's standard maths stuff
20 is D, there was no initial revenue

I'm not sure about 11. I really don't know the answer

 

[heytherewhatsup]

Plzq20 be B!!! I put B

 

[lochnessmonsta]

Ok I'm sorry but I don't understand how question 20 is D. Isn't a tariff a tax on imports? That would mean that imports exist in the economy simply due to the existence of the tariff right? Therefore, a reduction in tariffs results in a reeducation of revenue as tariffs are revenue based


Hayley

If I were PM and said all iron ore imports now have a 10% tax, I wouldn't get any money. That's because we don't import any iron ore (that I know of).

In the question, when the price is $30 they don't have any imports. Hence no revenue. But when they lower the tariff they do get some imports. Hence it increases

 

[andrew29223]

3 is C, because there is less inequality
18 is D, because increase in oil supply -> lower cost of oil -> lower headline inflation
19 is D, that's standard maths stuff
20 is D, there was no initial revenue

I'm not sure about 11. I really don't know the answer

Spot on, 11 is A everyone. A mining sector/manufacturing sector change will obviously affect structural because its clearly to do with the structure of AUs industry. Frictional will be impacted with any increase in unemployment because people will be temporarily unemployed in searching for new job. Long term can result from structural/cyclical (hysteresis) especially since Aus manufacturing industry is declining and workers that have been working in manufacturing for a long time will have no skills etc. it is A, seasonal is the hardest to argue for an impact therefore it is NOt effected

 

[chris_power_96]

3 is C, because there is less inequality
18 is D, because increase in oil supply -> lower cost of oil -> lower headline inflation
19 is D, that's standard maths stuff
20 is D, there was no initial revenue

I'm not sure about 11. I really don't know the answer

I'm pretty sure 20 is b, the current tariff is $10, which is then reduced to $5. How would it increase tariff revenue when foreign imports have to pay less to the government.

 

[Randox]

Spot on, 11 is A everyone. A mining sector/manufacturing sector change will obviously affect structural because its clearly to do with the structure of AUs industry. Frictional will be impacted with any increase in unemployment because people will be temporarily unemployed in searching for new job. Long term can result from structural/cyclical (hysteresis) especially since Aus manufacturing industry is declining and workers that have been working in manufacturing for a long time will have no skills etc. it is A, seasonal is the hardest to argue for an impact therefore it is NOt effected

+1 yeah that's what I thought.

 

[TurtleyyEpic]

3 is C, because there is less inequality
18 is D, because increase in oil supply -> lower cost of oil -> lower headline inflation
19 is D, that's standard maths stuff
20 is D, there was no initial revenueI'm not sure about 11. I really don't know the answer

I agree with you on 3 and 19 (18 not sure), but with 20, how does tariff revenue increase when the level of the tariff decreases?

 

[andrew29223]

I agree with you on 3 and 19 (18 not sure), but with 20, how does tariff revenue increase when the level of the tariff decreases?

Big trick question, fooled me. At the original tariff there was no imports at all (see the diagram). no imports = no tariff revenue. But when the drop the tariff, there are imports and there is that little box for tariff revenue.

 

[hayleyemma96]

If I were PM and said all iron ore imports now have a 10% tax, I wouldn't get any money. That's because we don't import any iron ore (that I know of).

In the question, when the price is $30 they don't have any imports. Hence no revenue. But when they lower the tariff they do get some imports. Hence it increases

They wouldn't have a tariff in place if there weren't any imports to begin with...


Hayley

 

[andrew29223]

They wouldn't have a tariff in place if there weren't any imports to begin with...


Hayley

No they had a large enough tariff that there weren't any more imports

 

[lochnessmonsta]

If anyone can tell me how much revenue the government was getting at a $10 tariff I will concede that it is B lol

 

[Randox]

No they had a large enough tariff that there weren't any more imports

Lol wtf.

 

[andrew29223]

If anyone can tell me how much revenue the government was getting at a $10 tariff I will concede that it is B lol

+1

 

[TurtleyyEpic]

Big trick question, fooled me. At the original tariff there was no imports at all (see the diagram). no imports = no tariff revenue. But when the drop the tariff, there are imports and there is that little box for tariff revenue.

Ohh far out haha got it thanks for explaining

 

[rainlewis]

Question 20 is definitely B. The diagram is only for the question underneath it which is the situation where the tariff is $5. You arent suppose to think about the tariff being $10 on the same diagram. A decrease in a tariff on importers would ALWAYS mean decreased government revenue, and fall in domestic outputs as there would be increased competition from importers.

 

[Richard III]

There was no direct case study question right? Cant believe it :/ That must be the first year they've done that

 

[lochnessmonsta]

Question 20 is definitely B. The diagram is only for the question underneath it which is the situation where the tariff is $5. You arent suppose to think about the tariff being $10 on the same diagram. A decrease in a tariff on importers would ALWAYS mean decreased government revenue, and fall in domestic outputs as there would be increased competition from importers.

We all agree they get 5*20 =$100 in tariff revenue when it is a $5 tariff.

All I'm asking is can you tell me how much they were getting when it was $10, if you are so sure.

 

[rainlewis]

There was no direct case study question right? Cant believe it :/ That must be the first year they've done that

No, there was no direct case study question. But the 6 marker short answer that asked about globalisation in relation to environmental sustainability, that's where you would talk about your case study essentially to get the full 6 marks.

 

[rainlewis]

We all agree they get 5*20 =$100 in tariff revenue when it is a $5 tariff.

All I'm asking is can you tell me how much they were getting when it was $10, if you are so sure.

You are not given that information. That is what i'm saying. Its basic economics, a tariff decrease will subsequently reduce government revenue. You should approach the question without looking at the diagram, as the diagram is just for the $5 tariff situation.

 

[Richard III]

Isn't when the tariff is $10 the price is $30--> which is the equilibrium price (consumers only demanding 100 of domestic produce?).. and :. no Ms? :. Answer D?