Assignment: Short Answer Questions
Task
Assignment 1 consists of two short answer questions (worth 5 marks each) based on Text material. Before attempting this assignment you are expected to have read Text chapters 1, 2, 3 and 4. Sources used in your answer should be fully referenced in APA 6th style.
Answer the following questions ensuring that you apply economic principles or theory related to (a) the concepts of supply and demand for Question 1 and (b) the concepts of specialisation and exchange for Question 2 to inform your analysis and support your decisions. Communicate your ideas with correct grammar, spelling and writing style and support your answers with diagrams as necessary.
Question 1 - Explain the concept of the price elasticity of demand and provide examples where understanding the nature of the price elasticity of demand has been important in the decision making of a firm.
Question 2 - Explain the concepts of comparative advantage and absolute advantage and provide examples of situations in which countries have ignored the principle of comparative advantage to their cost.
Rationale
This assignment provides an opportunity for you to demonstrate that you have engaged with the subject and that you are familiar with the use of the model of supply and demand and concepts of specialisation and exchange.
The questions address the following learning outcomes:
Learning Outcome 1: be able to apply demand and supply analysis to make a range of market related decisions.
Learning Outcome 2: be able to identify and critically evaluate opportunities for specialisation and exchange.
Presentation -
Answers should be typed and diagrams must be clear and neat and preferably drawn electronically. Hand-drawn diagrams are acceptable. Sources used in your answer should be fully referenced in APA 6th style. The answer to the question should be divided into three parts:
Part 1: Introduction
The introduction sets up your response by succinctly stating your understanding of the issues, what you think is the best way to analyse the situation - including choice of theory and sources of evidence, what type of findings you expect and what potential applications you expect there to be.
Part 2: Analysis
The analysis will represent the bulk of your work. Here you will provide your answer in detail by drawing upon the literature, the theory and the evidence to come up with an answer to the question posed. You may find that you want to break this section up into a number of sub-parts - one for a detailed discussion of the issues including your non-technical response, one for a detailed analysis of the tools of analysis you will use (theory), one for your extensive consideration of the evidence, one where you draw together your information and findings along with their implications.
Part 3: Conclusion
In the conclusion you briefly and succinctly review what you have done in answer to the question and indicate what further issues there might be to be considered.