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TASEconomics

Microeconomics

6 dot points across 6 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How responsive are buyers and sellers to changes in price and income?

Define and calculate price, income and cross elasticity of demand and price elasticity of supply, and explain their determinants and uses.
Price, income and cross elasticity of demand and price elasticity of supply: definitions, formulae, determinants, and why elasticity matters for revenue and tax.
6 min answer →

Why do markets sometimes fail, and how can government intervention improve outcomes?

Explain the main sources of market failure and evaluate government policies used to correct them.
Externalities, public goods, information failure and market power as sources of market failure, plus taxes, subsidies, regulation and other government responses in Australia.
7 min answer →

How does the level of competition affect price and output?

Compare the characteristics and outcomes of perfect competition, monopoly, oligopoly and monopolistic competition.
The four main market structures, their features, and how competition shapes price, output, efficiency and the role of the ACCC in Australia.
7 min answer →

How do demand and supply interact to determine price and quantity in a market?

Explain how the forces of demand and supply establish equilibrium price and quantity, and how shifts in the curves change that equilibrium.
How demand and supply curves set the equilibrium price and quantity in a competitive market, and how shifts and movements change outcomes, with Australian examples.
6 min answer →

Why must every society make economic choices?

Explain the economic problem of relative scarcity and how it forces individuals, firms and governments to make choices that carry an opportunity cost.
The economic problem of relative scarcity, the choices it forces on consumers, firms and government, opportunity cost and the production possibility frontier, with Australian examples.
8 min answer →

How does a market economy coordinate millions of decisions without a central plan?

Describe the key features of a market economy and use the circular flow model to explain how income, spending and resources move through the Australian economy.
Features of the market economy, the role of the price mechanism, and the two, three and four sector circular flow model with leakages and injections, using Australian examples.
8 min answer →