In a business, provide two examples of explicit cost and two examples of implicit cost. Explain how these costs affect accounting and economic profit.   2 Marks 

1.  
2. With relevant assumptions, use a numerical example to explain the concept of increasing and decreasing marginal returns and its impact on marginal cost. 3 Marks 
3.  

QUESTION 2

Define game theory and apply the game theory matrix diagram to illustrate and explain a strategic decision YOU made recently. 3 Marks

QUESTION 3

2. Why is it that in some countries even as real per capita gross domestic product increases, the welfare of many people does not improve? Explain by providing four (4) reasons. 2 Marks
4. Use a numerical example and explain if it possible for real GDP to be greater than nominal GDP in any given year. 2 Marks
6. Economist are predicting that stagflation could become an issue. Graphically represent and explain how stagflation can occur and highlight two main economic problems of stagflation. 3 Marks

QUESTION 4

2. It is reported that the consumer price index has increased by 7.3 %. Does this mean that the cost of living of every Australian has increased by 7.3 %? Provide 3 reasons to justify your answer. 3 Marks
4. Define and explain how changes in participation rate can impact the unemployment rate. 2 Marks
6. use graphs where possible