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Applying theory

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This exercise focuses on applying economic theory to your Economics problems and in your written work.

As in most university subjects, this is an important aspect in writing in Economics . Your lecturers want to see that you not only understand the theory or principles underpinning your subject, but also that you are able to apply them to other settings.

Identifying economic principles

Look at the example below of the application of the economic principle of "supply" to the assignment task on electricity.

[1] In analysing the market for electricity, the supply curve would be affected

[2] because there would be an increase in supply as there is a new product on the

[3] market and everybody would want it. The law of supply states that an increase

[4] in quantity demanded would increase the price of the product and therefore less

[5] will be demanded at the new process. This factor is exogenous as it did not

[6] appear in either of the axes and affects both demand and supply curves.

On which lines in the above example from the assignment is the economic principle presented?

Check your answer


Applying economic principles

On which lines is the application of the economics principle presented?

Check your answer


Linking economic principles to assignment topics

On which lines are the economic principles linked to the assignment topic?

Check your answer

Identifying economic principles: answer

If you answered Lines 3, 4, 5 and 6, you are correct.

Applying economic principles: answer

If you answered Lines 2 and 3 and Lines 5 and 6, you are correct.

Linking economic principles to assignment topics: answer

In Lines 2 to 5, the phrase "the supply curve would be affected because... and everybody would want it" explains the economic principle in practical terms. A link is evident between this and the next sentence because the next sentence provides the theoretical explanation for this phenomenon.

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