Section A:

Question 1:

Part (a):

(0.56/14)*100= 4%.

Part (b):

Gas and offshore wind.

Part (c):

A coal mining firm can benefit from technical economies of scale, as they can purchase advanced
technology equipment and enhanced machinery.

Part (d):

Cost of production, if the cost of production. If the cost of production is higher, it is most likely will be
price-elasticity of supply is elastic. The duration of the production, if the production takes a lot of time
then the price-elasticity of supply is elastic.

Part (e):

As the price of the coal will decrease, the supply curve

will shift to the left.

Part (f):

Not all countries have net exports of coals. Countries like China and India, have a negative net of exports
and that’s because their consumption is greater than their production, so they import coal the most. The
rest of the countries have positive net exports of coal and that’s because their consumption is less than
their production. Australia have the highest net export by 394 million tons of coal and China is the least
by -575 million tons of coal.
Part (g):

An increase in the coal industry in Australia will bring a lot of benefits to the economy, as the number of
workers will increase, which will then decrease the unemployment rate and decrease spending on
unemployment benefits. However, this increase can bring diseconomics of scale, which will then
increase the cost of production and causes unemployment to increase. At the end, I believe that it will
help the Australian economy as it will let them produce more coal and export it as well, which will lead
to an improve in the government budget.

Part (h):

Australia will not have budget deficit in 2026 as the predictions suggests that the GDP of Australia will be
increase, so more production and export leading to more revenue for the government. However, the
government will not have any deficit in the budget, as they increased the taxes, the revenue of the
government budget will be increased, thus no budget deficit. At the end, Australia may have budget
deficit by 2026, and that’s because both of the unemployment rate and population are increasing, so
there will be more spending on infrastructure and unemployment benefits, so there is a budget deficit.

Question 2:

Part (a):

Medium for exchange and store of value.

Part (b):

As education will be improved more people will be aware of the drawbacks of consuming cigarettes, so
there will be less consumption of cigarettes and the demand for cigarettes will be decreased. On the
other hand, when be are aware of the benefits of consuming fresh foods, they will consume more of the
fruits, so the demand for fruits will be increased.

Part (c):

An increase in government tax revenue will increase it’s spending, so the government may spend more
on infrastructure and this will enhance production and increase the country’s GDP. On the other hand,
increase in government revenue and spending will lead to inflation, which increases firms costs and
unemployment as well. Also, increase in government in tax revenue will mean that their will be an
appreciation in the foreign currency exchange, so the exports will become expensive and will be less
competitive, so less exports and change in the current account of balance.

Part (d):

An increase in government pending on unemployment benefits will help unemployment to pay for their
neccesities but they will be relative poverty as they will not have what average households have. It may
not include people like old people or immigrant who are relatively the poorest people in the economy,
so there is still people who are in either relative or absolute poverty. Besides, when there is an increase
in unemployment benefits, this will active as an disincentive for people to work, so there will be poverty
spreading. There are people who are been discriminated at work and are given low wages, even if the
unemployment benefits have been increased, the will still be in poverty.

Question 3:

Part (a):

The living of standards are bad in one country than the other and one country can have a worse health
care system than the other.

Part (b):

If there is an increase in the population, this will lead to an increase in the number of people entering
the labour workforce, hence more workforce. Decreasing the years of the education will also influence
in an increase in the number of workforce, as the duration spent at school and colleges, have been
decreased.

Part (c):

When the labour productivity is increased this means that he can produce high output with low input,
this mean that the country’s output will be increased, and this will increase the amount of exports for a
country and make the country less dependent on imports. Another thing is that, a high productive
worker may get the opportunity to work outside of his country, and then send money back to his
country, this will increase the surplus for the exchange of money out of the country to it, so a surplus in
the current account.

Part (d):

If there is a declining population in a country, that means that the consumption will be decreased and
this will lead to a decrease in demand and the prices of the goods and services will be decreased, so
their will be no inflation in the future. Some countries keep the interest rates so high for a long period of
time, this will encourage people to invest for a longtime, and this will keep inflation of the country stable
at a rate. Another factor is that there is confidience among the investors that their will be stable
economy for the country so, they will invest and work, and this will keep inflation low in the future.

Question (3):

Part (a):

They have more money and store value of their money