BUSINESS115 Cheatsheet · Economics, Markets and Law

0 · Exam Mapcourse.json · brief

"The exam is online, open book, and out of 100 marks." (BUSINESS 115 Assessment Overview, Semester Two 2026)

1 · Universal Response Methodall chapters · FAQ

when asked to analyse or recommend1 Define the object + units → 2 select the economic model or institutional rule → 3 show the mechanism line by line → 4 trace winners, losers and wider welfare → 5 state the boundary that could narrow or reverse the conclusion.

Before calculation: separate supplied inputs from derived quantities; predict the direction; keep signs, denominators and baselines visible. After calculation: test plausibility and one changed assumption. A calculator output is not a method.

2 · Choice, Welfare, MarginsC2 topic · glossary

Opportunity cost = value of the best forgone alternative. Explicit costs are payments; implicit costs are opportunity costs of resources already owned. A sunk cost is past and unrecoverable: exclude it from the forward choice.

marginal decision rulecontinue while marginal benefit exceeds marginal cost; compare the additional benefit and additional cost of one more unit or a small change.

3 · Demand, Supply, EquilibriumC3 topic · glossary

Movement along a curve: the good’s own price changes. Shift: a non-price determinant changes quantity demanded or supplied at every price. Name the determinant before shifting.

4 · Market-Shock Decision TableC3 FAQ · C6

5 · Elasticity: Response LogicC6 topic · FAQ

Price elasticity asks how responsiveness changes stakeholder outcomes after a price or policy shift. Keep price response separate from income and cross effects; then trace the implication for revenue and incidence.

use when asked to predict a responseDefine the measured response + range → identify own-price, income or cross effect → predict direction → connect to revenue / incidence → name who bears the effect.

Boundary: elasticity varies with time horizon, alternatives and measurement range. An estimate travels to a new case only when those conditions are comparable.

7 · Market Power & RegulationC8 topic · FAQ

Start with monopoly or oligopoly, but do not stop at structure. Identify the strategic conduct, show its effect on price and innovation, then evaluate the regulatory option.

when asked whether policy followsstructure → conduct → effect → competition-policy option → implementation / stakeholder limit

Concentration is evidence to investigate, not automatic proof of abuse. A conclusion needs behavioural and effect evidence, not a label.

8 · New Zealand Legal MethodC4 topic · glossary

Identify the source of law, locate it in the constitutional setting, then assign the relevant role to courts or Parliament. The task is to identify institution, authority and decision pathway.

Tikanga Māori comprises Māori values, principles and customary practices recognised within Aotearoa New Zealand’s legal system. Te Tiriti o Waitangi frames enduring relationships and obligations between Māori and the Crown.

9 · Te Tiriti, Government, LegitimacyC5 topic · FAQ

Give three concepts separate jobs: Te Tiriti o Waitangi fixes the relationship or context; the three branches of government explain authority; regulation and legitimacy test the decision and stakeholder consequences.

when asked about a policy or business issueinstitutional / Treaty context → branch and authority → regulatory mechanism → affected stakeholders → legitimacy and evidential boundary.

Boundary: legal and historical claims require current authoritative sources and respectful context. Do not reduce legitimacy to a generic branch diagram.

10 · GDP, Inflation, LabourC9 topic · FAQ

Read real GDP, price level and inflation, and unemployment together. Give each indicator a distinct job, then explain what the combination does and does not establish about wellbeing.

Boundary: national averages conceal distribution and unpaid or informal activity.

12 · Trade & Exchange RatesC11 topic · FAQ

Begin with comparative advantage, connect it to a named balance-of-payments flow, then trace the exchange-rate movement to exposed businesses and households.

when evaluating a currency movementtransaction + exposure → trade / financial flow → exchange-rate movement → importer, exporter, household or firm effect → qualified judgement.

Boundary: a currency movement creates winners and losers rather than one national effect.

13 · Cycle & StabilisationC12 topic · FAQ

Diagnose business-cycle conditions; separate fiscal and monetary mechanisms; compare the options by lag, risk and stakeholder impact; confront the inflation–recession trade-off.

Boundary: calibration depends on uncertain and revisable economic data.

15 · Worked 1: Solve Equilibriumcourse data · C3 · 4 marks

Given: Demand / MB = 22 − 2Q; Supply / MC = 2 + 0.5Q. Find the competitive equilibrium and interpret the method.

1 · equate demand and supply [1]22 − 2Q = 2 + 0.5Q

2 · collect terms [1]20 = 2.5Q → Q* = 8

3 · substitute back [1]P* = 22 − 2(8) = 6
check: 2 + 0.5(8) = 6 → P* = 6

4 · interpret [1]At Q = 8, marginal benefit equals marginal cost at price 6, subject to the competitive model’s assumptions.

16 · Shock DrillC3 worked method

1. Name the changed non-price determinant.
2. State whether D or S shifts and in which direction.
3. Recompute or compare the new P* and Q*.
4. Trace consumer surplus, producer surplus and wider welfare.

Trap: if only the good’s own price changed, it is movement along the curve—not a shift.

17 · Worked 2: Welfare ChoiceC2 worked example · 4 marks

Task: compare a private decision with wider social costs and benefits without collapsing scarcity, welfare, efficiency and equity.

1. [1] State the exact comparison and the scarce resource or choice.
2. [1] Apply scarcity and incentives to the private decision; exclude sunk costs and identify the opportunity cost.
3. [1] Apply social welfare: consumer surplus + producer surplus before external costs or benefits.
4. [1] Use efficiency and equity to qualify the result: who gains, who loses, and is the process legitimate?

model answer shapePrivate incentive → allocation → CS + PS → wider cost / benefit → distribution → qualified judgement.

Boundary: efficiency does not by itself settle distribution or legitimacy.

18 · Fast Recall: Cost & Welfareglossary · C2

19 · Worked 3: Externality InstrumentC7 worked example · 4 marks

Task: compare instruments by incentive, information, equity and implementation.

1. [1] Define the external cost or benefit and identify the uncompensated third party.
2. [1] Name the Pigouvian instrument and the behaviour it changes at the margin.
3. [1] Compare information need, who bears the cost or receives the benefit, and administrative burden.
4. [1] Apply the sustainable-business response and give a qualified recommendation.

model answer shapeprivate transaction → external effect → instrument → incentive response → admin. + distribution → recommendation.

Boundary: a correction can create new administrative and distributional effects.

20 · Market-Power Mini DrillC8 worked method

A draft jumps from “oligopoly” to “regulate”. Repair it:

1. State the market structure as the starting condition.
2. Name the alleged strategic conduct.
3. Show the price, innovation or stakeholder effect.
4. Compare a competition-policy option and its implementation limit.

Do not write: “high concentration proves abuse.” It is evidence to investigate, not the conclusion.

State why the selected response fits the conduct and effect.

21 · Worked 4: Law + Te TiritiC4–5 worked examples · 4 marks

Task: explain how institutional and Treaty context shapes a policy or business issue.

1. [1] Identify the source of law and the specific object, relationship or condition being analysed.
2. [1] State the constitutional setting and which branch or institution has the relevant authority.
3. [1] Use Te Tiriti o Waitangi, regulation and legitimacy for a consequence or check that could change the result.
4. [1] Give the requested conclusion within current authoritative evidence and respectful context.

model answer shapesource → institution / authority → Treaty context → decision path → stakeholder + legitimacy check.

Boundaries: this study analysis is not legal advice for an actual dispute; legal and historical claims require current authoritative sources.

22 · Legal Recall TableC4–5 glossary · FAQ

23 · Worked 5: Macro → PolicyC9–12 worked methods · 4 marks

Task: compare stabilisation options through mechanism, lag, risk and stakeholder impact.

1. [1] Diagnose the condition with real GDP, inflation and unemployment; state what the averages omit.
2. [1] Select fiscal or monetary policy and write the first mechanism it changes.
3. [1] Trace the channel through interest rates or activity to households, firms and asset markets; name the delay and exposure.
4. [1] Weigh inflation–recession risk and give a revisable judgement.

model answer shapeindicator diagnosis → instrument → transmission channel → lag → stakeholder effect → risk-qualified judgement.

Boundary: calibration depends on uncertain and revisable data; transmission varies by delay and exposure.

24 · Money + Macro Trap TableC9–10 FAQs

25 · Trade / FX DrillC11 worked example

A draft jumps from comparative advantage straight to “the country benefits”. Repair it:

1. Name the transaction and currency exposure.
2. Connect comparative advantage to a named trade or financial flow in the balance of payments.
3. State the exchange-rate movement and trace it to importer, exporter, household or firm.
4. Conclude with winners and losers; do not assert one national effect.

safe conclusion“The currency movement changes [named exposure], helping [stakeholder] while hurting [stakeholder]; it therefore has no single national effect.”

26 · Method Chooser + Boundarytopic maps · FAQs