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Year 11 Prelim Economics Question Bank [Pt 2]: All The Short Answer Questions and Answers You’ll Ever Need

All The Short Answer Questions and Answers You’ll Ever Need!

Xerxes Lopes
99.65 ATAR, AR at Normanhurst Boys, 1st in Economics (97)

Updated on:

January 10, 2022

Year 11 Guides

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Short Answer Questions; How do I know what will get me full marks in year 11 economics?

The second type of question that will pop up in your economics exams (and arguably the most common type you’ll come across) are short answer questions. Short answer questions aim to test your content in as many application based-scenarios as possible, whilst also making sure you know your fundamentals. The marks associated with these questions generally range between 1 and 6 marks. 

If you’re unsure of how to approach questions, look back on your summary notes. You can even ask your friends or teachers to explain the possible correct responses to you. In reality, most of these questions are very application based and few will be definitions-based. This means that you need to make sure you’re familiar with how to apply economic theory before you start practicing these - this is usually done by ensuring your summary notes are finished. If you have no idea where to start with your summary notes, have a read of this article, which explains how you can use the syllabus to ensure you save time by only learning relevant content.

If you want to get full marks in your short answer responses, you’ll need to develop your own special exam technique. Unfortunately, it’s not something that you can learn overnight, but once you establish the skill through effort and practice you’ll be able to score high marks in preliminary economics and set yourself a solid foundation to ace year 12 HSC economics too! Let’s deconstruct a few from each topic using some different techniques:

Topic 1 Introduction to Economics

Outline the impact of opportunity cost on consumers and firms (2).

This question comes from the “The nature of economics” part of the syllabus.

  • With the outline directive verb in year 11 economics, we want to provide a point for every 1 mark.
  • For an outline response, we want to outline every point in general terms.
  • Given this is a 2 marker, we should therefore provide 2 points - 1 for consumers and 1 for firms

Here’s an exemplar answer:

Consumers can choose to satisfy immediate wants through consumption, where there is an opportunity cost in the loss of satisfying future wants (through savings). Firms face a similar problem, where they can choose whether to distribute their profits through dividends, where there is an opportunity cost in the loss of capital investment into the business (for future growth).



Topic 2 Consumers and Business

Explain how consumer sovereignty in the market for smartphones may be undermined (4).

This question comes from the part of the syllabus where Advertising is a factor that influences consumer choice.

  • With the explain directive verb in year 11 economics, we want to provide a point for every 2 marks.
  • For an explain response, we want to use a cause and effect response
  • Given this is a 4 marker, we should therefore provide 2 ways in which consumer sovereignty can be undermined through Advertising - specifically in the market for smartphones. 

Here’s an exemplar answer:

Marketing from firms who sell smartphones can be used to alter spending patterns of consumers, manipulating them into purchasing their products over others. This will undermine the control that consumers have over the production of goods and services, reducing consumer sovereignty.

Smartphone firms may also produce goods that are designed to deteriorate rapidly, in order to encourage consumers to make more purchases in the future. This is known as planned obsolescence, which further reduces the control that consumers have in production decisions, lowering consumer sovereignty.

Outline the ways in which the internal economies of scale for a steel manufacturing firm can be achieved (3).

This question comes from the Internal and External Economies of Scale part of the syllabus.

  • With the outline directive verb in year 11 economics, we want to provide a point for every 1 mark.
  • For an outline response, we want to outline every point in general terms.
  • Given this is a 3 marker, we should therefore provide 3 ways (1, 2, 3)  in which the internal economies of scale for a firm can be achieved - specifically an iron ore mining firm. 

Here’s an exemplar answer:

A steel manufacturing firm can purchase more raw materials in bulk, which reduces per unit (average) costs and moves the firm closer to their technical optimum. They can further achieve internal economies of scale by investing in more efficient manufacturing capital equipment, increasing productivity and lowering average costs. The firm can also invest in research and development to develop more cost efficient methods of manufacturing steel, lowering per unit costs and achieving an internal economies of scale.



Topic 3 Markets

Explain factors that will increase the level of demand for fuel (4).

This question comes from the Factors Affecting Demand part of the syllabus.

  • Remember, with the explain directive verb in year 11 economics, we want to provide a point for every 2 marks.
  • We also want to use a cause and effect breakdown
  • Given this is a 4 marker, we should therefore provide 2 ways in which demand for goods or services can increase - specifically in the market for shampoo. 

Here’s an exemplar answer:

The price of substitutes, such as public transport, will directly influence the demand for fuel. If the price of public transport rises, a substitute for driving a car, then the demand for fuel used in cars will rise. Speculation regarding the future price of fuel will influence the demand for it in the present. If the price of fuel is suspected to rise in the future, consumers will bring forward their purchasing decisions, thus increasing the demand for fuel. 


Topic 4 Labour Markets

Discuss the impacts of an inequitable distribution of income (6).

This question comes from the “arguments for and against a more equitable distribution of income from work” part of the syllabus.

  • With the discuss directive verb in year 11 economics, we want to provide a point for every 1-2 marks.
  • We should also breakdown our answer into positive and negative effects
  • Given this is a 6 marker, we should therefore provide 4 effects of an inequitable distribution of income - with 2 positives and 2 negatives.

Here’s an exemplar answer:

An inequitable distribution of income means that a greater population of low income earners require more support from government social services and the social wage. This will increase government expenditure and create a greater taxation burden on higher income earners. Additionally, a greater number of lower income earners could result in increased levels of absolute and relative poverty, worsening standard of living. However, an inequitable distribution of income incentivises lower income earners to increase productivity to attain higher wages (under a decentralised wage system). Additionally, as more income is concentrated on higher income earners who have a higher marginal propensity to consume, there will be an increase in national savings. This will increase a country’s investment capacity, increasing economic growth.

Explain how the unemployment rate can be reduced through the demand side of the labour market (4).

This question comes from the “factors affecting demand” part of the syllabus.

  • Remember, with the explain directive verb in year 11 economics, we want to provide a point for every 2 marks.
  • We also want to use a cause and effect breakdown, with specific reference to theory about the labour market
  • Given this is a 4 marker, we should therefore provide 2 ways in which demand for labour can increase, and thus reduce unemployment.

Here’s an exemplar answer:

An increase in the cost of capital substitutes will lead to an increase in demand for labour by firms, due to lower relative costs which maximise profit margins. This increase in demand for labour will reduce the gap between supply of and demand for labour in the labour market, reducing unemployment. An increase in labour productivity will further increase the demand for labour by firms, since they can increase output at the same total cost. The increase in demand for labour will further reduce the unemployment gap in the labour market.


Topic 5 Financial Markets

Compare and contrast the role of the Australian Prudential Regulations Authority and the Australian Securities and Investments Commission in regulating Australia’s financial markets (3).

This question comes from the “Regulation of financial markets” part of the syllabus.

  • With the compare and contrast directive verbs in year 11 economics, we want to provide a point for every 1-2 marks.
  • We should also break-down our answer into similarities and differences.
  • Given this is a 3 marker, we should therefore provide 2 points - 1 similarity and 1 difference.

Here’s an exemplar answer:

The Australian Prudential Regulation Authority (APRA) provides and enforces regulations on all deposit taking institutions, whereas the Australian Securities and Investments Commission (ASIC) regulates the actions of Australian companies and financial markets, such as the ASX. APRA ensures that these institutions meet their obligations to depositors, which protects the interests of individuals and firms who lend money to receive an interest. Similarly, ASIC aims to protect the interests of individuals and firms investigating misleading and deceptive conduct, illegal acts in financial markets and unethical investment products.

Describe how the Reserve Bank of Australia can lower domestic interest rates (3).

This question comes from the “Interest Rates” part of the syllabus.

  • With the describe directive verb in year 11 economics, we want to provide a point for every 1-2 marks.
  • In this case, there is ONE central argument that needs to be explained. So instead of focusing on how many arguments to provide, we should instead break a response down by how many points in the ONE argument to provide.
  • Given this is a 3 marker, we should therefore provide 3 points (1, 2, 3).

Here’s an exemplar answer:

The Reserve Bank of Australia (RBA) must implement expansionary monetary policy by buying second-hand Commonwealth Government Securities from commercial banks in the short-term money market (STMM). This will increase the liquidity of funds in the STMM, pushing down the cash rate. Commercial banks will pass on a lower cash rate to the rest of the economy in the form of lower interest rates, to maintain competitiveness with other lending institutions. 



Topic 6 Government and the Economy

Explain how the Australian Government fulfills its economic role of the redistribution of income (4).

This question comes from the “redistribution of income” part of the syllabus.

  • Remember, with the explain directive verb in year 11 economics, we want to provide a point for every 2 marks.
  • We also want to use a cause and effect breakdown.
  • Given this is a 4 marker, we should therefore provide 2 ways in which the Australian Government aims to redistribute income.

Here’s an exemplar answer:

The Australian Government redistributes income through the progressive income tax system, where the marginal rate of tax increases as income increases. With a tax-free threshold of up to $18,200 and a top marginal tax rate of 45% for incomes higher than $180,000, the government collects tax revenue by reducing the disposable income of higher income earners. The Australian Government uses this tax revenue to redistribute income through social welfare payments. These social welfare payments, including unemployment benefits, push up disposable incomes of those without income, which overall redistributes income to improve its distribution.

Distinguish between the influence of businesses and unions on government policies (2).

This question comes from the “Influences on government policies in Australia” part of the syllabus.

  • With the Distinguish directive verb in year 11 economics, we want to provide and show the differences between the concepts given.
  • We should make sure to use words such as ‘whereas’, ‘however’ or ‘on the other hand’ to connect our two sentences (shown below)
  • Given this is a 2 marker, we should therefore provide a distinguishing characteristic for each group - 1 for businesses and 1 for unions

Here’s an exemplar answer:

Businesses provide financial assistance to political parties, to lobby them to implement corporate tax breaks or other favourable legislation that increases their profit margins. On the other hand, unions are organisations of workers who aim to lobby political parties to push for legislation that increases the rights of employees.



Your Prelim Economics Formula Sheet for Short Answers

From the questions we just deconstructed you might’ve realised that there are ALOT of formulas required in preliminary economics. To ensure you don’t lose a single mark in these 1 markers, it’s highly recommended that you make your own formula sheet throughout year 11. Here are some important things to include:

  • The Equation - using a different font or style will help you break up your formula sheet better
  • Types of Questions - Try to list out the types of questions that can come up when using that formula. This will help you identify the formula required for MCQs a lot quicker in exam situations.
  • Question Examples - Make sure to include question type examples and a fully deconstructed answer. You will learn lots of formulae over 9 months, so if you forget one from early on or how to use it, an exemplary answer with an explanation will help you relearn it fast.

Go smash those year 11 economics exams!
Ultimately, your year 11 economics exams aren’t going to be hard if you understand the techniques that can push you to that top band. We hope this gave you a better idea on how to approach the different types of questions in your exams! Good luck for prelims!

If you’re looking for more support and practice in economics, I’d love for you to join one of our tuition classes at Project Academy!

This article is part two of Project Academy’s Year 11 Economics Practice Exam Bank Series. 

FAQs

Q: What topics are there in Year 11 Economics?

There are 6 topics in Year 11 Economics, including:

  1. Introduction to Economics
  2. Consumers and Business
  3. Markets
  4. Labour markets
  5. Financial markets
  6. Government and the Economy

Q: Is Year 12 Economics similar to Year 11 Economics?

Similar to most Year 12 courses, HSC Economics builds on the foundational skills and knowledge taught in Year 11. Moving into Year 12, we focus on how the concepts of consumers, businesses, governments, and markets apply to a larger, macroeconomic scale; the Australian Economy & the Global Economy as a whole.

Q: How can I find more practice papers for Year 11 Economics?

To find more practice papers for Year 11 Economics, ask around! Ask your teachers, friends who’ve completed the subject already and friends from other schools. If you’re still looking for practice, Project Academy offers over 300 past papers in addition to homework exam-style questions assigned each week according to the syllabus.

Q: What are the best Economics textbooks?

Most schools will use one of two textbooks, either:

  • Tim Riley’s “Year 11 Economics” Textbook
  • Tim Dixon’s and John Mahoney’s “The Market Economy” Textbook

In year 12, both publishers produce textbooks as well:

  • Tim Riley’s “Year 12 Economics” Textbook
  • Tim Dixon’s and John Mahoney’s “Australia in the Global Economy Textbook”

Both textbooks are sufficient, but Riley tends to add extension information and concepts that build upon syllabus content. If you’re looking for something simple, use Dixon. 

Q: Overall, is it hard to achieve a Band 6 in HSC Economics?

Year 11 and year 12 Economics can be hard at times, but staying on top of content, theories, policies, and contemporary information is your gateway to doing well. 

Of course it isn’t as simple as that when it comes to achieving a band 6. If you want to be in that top band you’ll need to focus on smashing that final exam, section-by-section. If you break down your preparation according to the syllabus (both by content tested and how it can be tested as I’ve done above), you will achieve amazing exam results.


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