BUSS1040 · Economics For Business Decision Making
The Complete Exam Bible · S2 2026Economics for Business Decision Making
BUSS1040 Economics for Business Decision Making is the University of Sydney Business School's first-year economics gateway — assumed knowledge for the Finance and Banking majors. It pairs a full microeconomics core (Topics 1–9: opportunity cost and trade, production and costs, supply and demand, elasticity and welfare, perfect competition, monopoly and price discrimination, game theory and oligopoly, and market failures) with a macroeconomics tail (Topics 10–12: GDP and the business cycle, unemployment and inflation, and stabilisation policy), built on Nguyen and Wait's Essentials of Microeconomics plus the Bernanke macro readings.
It is assessed by a 3% early-feedback quiz, four online quizzes worth 12% (best 3 of 4 count), a 25% closed-book in-person mid-semester exam covering Weeks 1–5, and a 60% closed-book in-person final exam (120 minutes plus 10 minutes reading; 20 MCQ for 30 marks plus 3 multi-part short-answer questions for 30 marks). There is no single-component hurdle — you pass on a weighted average of at least 50% — but the final dominates the grade, and roughly 80% of it is drawn from the harder Topics 6–12, so where your revision goes matters as much as how much you do.
What BUSS1040 covers
The whole subject → one exam-ready map. Each topic links to its free chapter guide.
How BUSS1040 is assessed
| Component | Weight | Format |
|---|---|---|
| Early Feedback quiz | 3% | Short Canvas quiz; due Friday of Week 3, 11:59pm; feedback returned Week 4 |
| Online quizzes ×4 | 12% (4% each, best 3 of 4 count) | On Canvas; due Fridays of Weeks 6, 9, 11 and 13 at 11:59pm (dates subject to change in your unit outline) |
| Mid-semester exam | 25% | In-person written, 60 minutes, Week 7; 20 MCQ (20 marks) + 1 short-answer (5 marks); covers Weeks 1–5 lecture material only; uni-approved bilingual dictionary + non-programmable calculator permitted |
| Final exam | 60% | In-person written, 120 minutes + 10 minutes reading; 20 MCQ (30 marks) + 3 multi-part short-answer (30 marks); covers Topics 1–12 (approx 20% from Topics 1–5, 80% from Topics 6–12); handheld calculator + pen/pencil permitted |
Comparative advantage and the gains from trade (short-answer style)
- 2 marksAbsolute advantage = who produces more with the same resources. Mara makes more of both (12 > 6 chairs and 24 > 18 tables), so Mara has the absolute advantage in both goods.
- 1 markCompute the opportunity cost of 1 chair for each person = tables given up ÷ chairs gained. Mara: 24/12 = 2 tables per chair. Tom: 18/6 = 3 tables per chair.
- 2 marksComparative advantage = the lower opportunity cost. Mara's 2 < Tom's 3, so Mara has the comparative advantage in chairs; by elimination Tom has the comparative advantage in tables (Tom's OC of a table = 6/18 = 1/3 chair < Mara's 12/24 = 1/2 chair).
- 1 markA mutually beneficial trade price for 1 chair must lie between the two opportunity costs — above Mara's 2 tables (or she would rather make her own) and below Tom's 3 tables (or he would rather make his own). So 1 chair trades for between 2 and 3 tables.
Key terms
- Opportunity cost
- The value of the next-best alternative given up when you make a choice. It is the unit of account for almost every BUSS1040 decision — comparative advantage, the shut-down rule, and a firm's marginal choices are all opportunity-cost arguments in disguise.
- Comparative advantage
- Having the lower opportunity cost of producing a good. The gains from trade come from each party specialising in its comparative advantage and trading, NOT from absolute advantage (raw productivity) — a high-marks distinction examiners test repeatedly.
- Marginal cost (MC)
- The change in total cost from producing one more unit, MC = ΔTC/Δq. For a quadratic cost TC = F + aq + bq², MC = a + 2bq. MC drives the firm's output rule (P = MC under competition, MR = MC under monopoly) and cuts both AVC and ATC at their minimum points.
- Deadweight loss (DWL)
- The loss of total surplus when output is pushed away from the efficient quantity — by monopoly, a tax or subsidy, a price control, or an unaddressed externality. Almost always a triangle: DWL = ½ × base × height between the relevant curves over the distorted range.
- Nash equilibrium
- A combination of strategies in which no player can do better by unilaterally changing their own strategy — best response to best response. In a sequential game, backward induction picks out the subgame-perfect equilibrium and rules out incredible threats.
BUSS1040 FAQ
Is BUSS1040 hard?
It is a manageable subject if you keep up, but the difficulty is heavily back-loaded. Topics 1–5 (opportunity cost, costs, supply and demand, welfare and elasticity, perfect competition) are intuitive once you draw the diagrams; the step up comes at Topics 6–12 — monopoly pricing and price discrimination, game theory, tax and externality algebra, and a whole macro module (GDP, the deflator, CPI, Okun's law and the expenditure multiplier) with no obvious shortcut. Because roughly 80% of the 60% final is drawn from that hard half, students who treat the macro tail and game theory as 'later' problems are the ones who find it hard.
Is there a hurdle I have to pass?
No single-component hurdle is stated in the source — you pass BUSS1040 on a weighted average of at least 50% across the early-feedback quiz (3%), the four online quizzes (12%), the mid-semester exam (25%) and the final (60%). But with the final worth 60% and ≈80% of it weighted to Topics 6–12, the final effectively decides your grade, so always confirm the current rules in your own unit outline.
What can I bring into the exams?
For the mid-semester exam the source allows a uni-approved bilingual dictionary and a non-programmable calculator (plus pen/pencil). For the final you may bring a handheld calculator and pen/pencil. Both are closed-book, in-person written exams — no formula sheet is mentioned, so the formulas (MR = a − 2bQ, the multiplier 1/[1 − b(1 − t)], the GDP deflator, and the surplus/DWL triangles) need to be at your fingertips.
How is the mid-semester exam different from the final?
The mid-semester (25%, 60 minutes, Week 7) covers only Weeks 1–5 lecture material — the micro foundations up to perfect competition — as 20 MCQ (20 marks) plus one short-answer (5 marks). The final (60%, 120 minutes + 10 minutes reading) covers all of Topics 1–12 as 20 MCQ (30 marks) plus three multi-part short-answer questions (30 marks), with about 80% of the marks on the harder Topics 6–12, including the macro module the mid-semester never tests.
Do the quizzes really only count 'best 3 of 4'?
Yes — the source states the four online quizzes are worth 12% total at 4% each, with the best 3 of 4 counting. That means one weak or missed quiz can be dropped, but it also means you should not bank on dropping one in advance; treat all four as practice for the exam-style questions and let the safety net be a bonus, not a plan. Dates (Fridays of Weeks 6, 9, 11 and 13) are subject to change, so check Canvas.
How to study for the exam
Treat BUSS1040 as two subjects taped together and budget your time where the marks are. (1) Lock the micro toolkit early (Topics 1–5): opportunity cost, the cost-curve family, supply and demand, the surplus/DWL triangles and the P = MC rule are the MCQ bread-and-butter and the mid-semester's entire scope — get them automatic so they cost you no time later. (2) Spend the most revision on Topics 6–12, because ≈80% of the 60% final lives there: drill monopoly profit-max and the three degrees of price discrimination, the game-theory ladder (dominant strategy → Nash → backward induction → Cournot → repeated games), tax/subsidy incidence and DWL, and the Pigouvian externality fix until the setups are reflexes. (3) Do not leave the macro tail until swotvac — GDP and the deflator, the unemployment rate and Okun's law, and the PAE multiplier with output gaps have no micro analogue, so they need their own dedicated passes. (4) Practise the short-answer ritual the practice finals reward: write the formula in symbols, substitute the numbers, label the diagram, and state a one-line economic conclusion — partial marks accrue at every step. (5) Work the real practice finals and tutorials under timed conditions; the exam explicitly tests connecting concepts across weeks and the source warns that MCQ patterns reappear as multi-part problems, so rehearse moving between a number and its diagram. (6) Use the four online quizzes as low-stakes dress rehearsals — the 'best 3 of 4' rule gives you a safety net, but the real payoff is feedback on exactly the question styles the exams reuse.
