BEA111 Principles of Economics 1
TUTE02 Tutorial Exercises 6 – Solutions
• Review the lecture resources and your own notes and the required reading.
• Prepare rough answers to all problems before attending your workshop.
• Be ready to both answer and to ask questions.
• There might not be enough time to work through each question during the workshop. For this reason, it is important that you have attempted each question and come prepared with questions with material that you are having difficulties with.
• Solutions to some questions will be available on MyLO once all workshop groups have met.
• You must submit an answer to the * question (Qu. 7) on MyLO by April the 7th, 23:59pm.
• This week you must also submit your links for the # question (Qu.10)
• Type your answer into a MS-Word document (or other word processor) and convert to a PDF document. (All submissions must be in PDF form)
• At the bottom of your answer include your Name, Student ID and Tutorial Day/Time.
• Save your file as BEA111 TUTE02 123456, where 123456 is your student ID.
• Log into BEA111 MyLO and select the Assessment/Assignments link. Select the Tutorial 2 Submission link.
• Upload your PDF file containing your typed answer to the * and # questions by selecting the “Add a File” button and then click the “Submit” button at the bottom of the page.
• Explain how total production in an economy is measured.
• Discuss the difference between real GDP and nominal GDP.
• Discuss whether GDP is a good measure of economic wellbeing.
• Understand how the economic growth rate is measured.
Qu. 7* a. What is labour productivity and how does it relate to long-run economic growth?
b. Assuming that the legal system is already efficient at enforcing property rights and contracts what two factors can increase labour productivity?
c. Based on your answers to questions a. and b. in the medium to long term would it be efficient for the government to increase expenditure on the university sector (assuming the money will be spent on teaching and research)?