Short Questions
Total Points: 100
- Answer all questions.
- Draw clearly labelled diagrams where necessary.
- The questions are based on the first 6 modules.
- A short explanation is sufficient for each question. So, not a lot to write. However, as you already know, careful thought goes into preparing a good response. So, quality trumps quantity.
- Each question has a required reading. So, read the question, do the reading, and apply the relevant concept discussed in the course to prepare your response.
- Also, leave some time to review and refine your responses. Do not forget to spell-check and grammar-check before submitting your responses.
Q1) (Module 1) (Opportunity Costs in the Brain) Opportunity cost of something of value is what you give up to get it (resources are finite, so if some resources are allocated to an option, then such resources are no longer available for another option). Of course, it is not just the resources available in the external world that are finite, internal brain resources (neurons and energy) are finite too. This question invites you to consider the opportunity cost of such internal brain resources. Read the following article: Of Diet Coke and Brain-Focused Economics by Richard McKenzie (ECONLIB ARTICLES MARCH 5, 2018). After reading the article, discuss at least one example from your own life (it could also be something that you have observed or heard about) where something that seems irrational at first starts to make sense when the opportunity costs of the internal brain resources are also considered. (25)
Q2) (Module 3) (Implications of a 4-day Work Week) Read the following article: After a century of Monday to Friday, could the 4-day week finally be coming to Australia? by John L. Hopkins.
- With the help of a clearly labelled supply-demand diagram of the labour market, show the impact of the introduction of the 4-day work week. Briefly explain. (10)
- Suppose the 4-day work week is implemented and the resulting superior work-life balance makes employees more productive (the best-case scenario described in the article is realized). Show the resulting impact with the help of supply-demand diagram of the labour market. Briefly explain. (15)
Q3) (Module 4) (Negative Externality of Mortgage Contracts) Read the following article: Shared Responsibility Mortgages by Atif Mian and Amir Sufi.
A) With the help of a clearly labelled diagram, explain the negative externality associated with the standard debt-based mortgages. (10)
B) With the help of a clearly labelled diagram, explain how the govt tilts the field in favor of standard debt-based mortgages and what are the consequences of this tilt. (15)
Q4 (Module 5 and Module 6) Read the following article: The Australian economy has changed dramatically since 2000 – the way we work now is radically different by John Quiggin.
- John Quiggin attributes Australia’s success in dealing with the GFC-2008 and Covid pandemic to a combination of good management and good luck. Briefly explain with the help of AD/AS diagram. (13)
- Suppose AI leads to massive job destruction as companies replace humans with AI. Show the impact with the help of AD/AS diagram. (12)