ECON 7002: Semester 1 2012
Tutorial Topic 1
CHAPTER 1 Practise Economics:
Question 2: In light of your answer to question 1, provide some explanations for the apparent differences in the relative share of government expenditure in the countries listed in the above table. Governments spend money on social security, health services, infrastructure such as roads, bridges etc, and transfer payments such as unemployment benefits and pensions. The disparity within the table is partially a reflection of the strength of the taxation system (without a strong tax system the government will lack 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 within the economy, that is a “planned” versus a “free” economy. In the case of Australia, although it is classified as a mixed economy the relatively high level of government expenditure is accounted for by the strong taxation system and broad base of social security payments.
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 Human Resources that can then be broken down further into: ♦ ♦ ♦ Land: 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 put the various other 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 therefore we need to make choices.
Question 3: Graph the data in the table. Are there constant or increasing opportunity costs for the production of missiles? There are increasing...
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