Reference no: EM132359909
Economics for Decision Making Assignment -
Assignment 1 -
Note that when you are answering questions that require mathematical calculations, you should provide details as to how the answers were derived. In completing your answers, you should use correctly labelled graphs wherever possible. Always provide a brief explanation of each graph, including how it relates to your overall answer/argument.
Question 1 -
a. Joan, who has been a university student for a year, has just started a new job. She realises that if she works more hours there will be an impact on her grades. The following is Joan's production possibility table for work and her average grades:
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Choices
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Production possibilities
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Grade (%)
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Work (hours per week)
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A
B
C
D
E
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0
20
40
60
80
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60
55
45
30
0
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From the figures in the table above:
i. Plot the production possibility curve for Joan.
ii. Explain the concept of increasing opportunity cost using the production possibility table and curve plotted in Q1ai above.
iii. If the opportunity cost of Joan increasing her grade was constant regardless of how many hours she worked, what would be the shape of her production possibility curve? Draw this graph. Which of the two shapes would be more likely, and why?
iv. What would be happening if Joan's combination of her grades and hours of work per week were below (inside) the curve as plotted above in Q1ai?
v. How could Joan push her combination of her grades and hours of work per week past (outside) the current curve?
b. Joan has returned to work after a year of unemployment and has found a high-paying job with an international hotel firm. Does this mean that Jane will no longer experience the problem of 'scarcity'? Explain the reasons for your answer.
Question 2 -
a. Continual research into solar power generation has seen a breakthrough in the manufacturing of solar-powered motor vehicles which will substantially reduce their costs of production. Use demand and supply curves to illustrate what will happen to:
i) the equilibrium price and quantity of solar powered motor vehicles.
ii) the equilibrium price and quantity of conventional motor vehicles.
b. In an attempt to support the solar-powered motor vehicle industry the government sets a minimum price for solar-powered vehicles that is below the market price. Do you think this is a good idea? Explain your decision using graphs.
Question 3 -
a. Complete the table below outlining the hourly kiosk demand for ice creams in summer. In your calculations use the midpoint method to calculate the price elasticities.
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Price ($)
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Quantity demanded
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Total revenue ($)
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Percent change in price
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Percentage change in quantity demanded
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Elasticity value
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Assessment of Elasticity
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1.00
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40
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1.50
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34
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2.00
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28
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2.50
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22
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3.00
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16
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3.50
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10
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b. Do you think the price elasticity of demand for ice creams in winter would be the same as in summer or would it become more elastic or more inelastic? Explain your answer.
c. What would you expect the price elasticity of demand for cigarettes to be? Explain your answer.
Question 4 -
a. Complete the cost schedule below for a company operating in a free-market. Fixed costs are $2,000. Output is sold for $150 per item. Highlight the profit maximising output.
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Workers
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Output
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Total Variable Cost (TVC) $
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Total Cost (TC) $
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Average total cost (ATC) $
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Marginal Cost (MC) $
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Total Revenue (TR) $
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Average Revenue (AR) $
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Marginal Revenue (MR) $
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Profit $
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0
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0
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2000
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1
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25
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2500
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2
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50
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2900
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3
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85
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3600
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4
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130
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5000
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5
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160
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7500
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6
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180
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10500
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7
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195
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13800
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b. Explain why a firm can make a loss and continue operating in the short run and under what circumstances it will shut down.
c. Discuss and show how a price-taking firm determines its profit-maximising output level.
Question 5 -
Do you think that the Australian Banking industry is closer to a Monopoly or Perfect Competition market structure? Give reasons for your answer. In your answer discuss how your choice benefits or harms the public interest. Can you think of any other industry structures that are similar to the banking industry?
Assignment 2 -
Requirement: For Assignment 2 you are required to prepare a report on the current (i.e., August/September 2019) state of the Australian economy and compare its performance with the state of the economy over the period from 2015 to 2019. In completing your report it will be necessary to examine the latest figures and the comparable figures commencing in 2015 to develop an annualised (2015, 2016, 2017, 2018, 2019) trend analysis. The following four economic indicators - economic growth (GDP), unemployment, inflation and trade (trade includes the terms of trade, the current account, net foreign debt and the value of the Australian dollar) are to be examined in your report. In examining the performance of the Australian economy it will be useful to outline any expected target values that may exist for the economic indicators. Finally, given your analysis, you are asked to highlight three major issues facing the Australian economy over the next 12 months and why these as of concern.
Presentation of report - The report should be between 1500 and 2000 words. This word limit does not include the abstract, tables, graphs and reference list.
The report should be word processed using Times New Roman font size 12 with 1.5 line spacing.
Structure of report
Your report must include:
- an appropriate title
- an abstract (sometimes called an executive summary) summarising the report
- an introduction in which you briefly explain what you are going to address in the report and why
- the body of the essay broken into sections with appropriate section headings
- a brief conclusion that should summarise your analysis
- appropriate in-text referencing and a reference list at the end of the report.
Although the requirements for presentation and structure may appear pedantic, they are not. In the business world you may often find yourself involved in writing a report - perhaps even for multilateral and government organisations such as the IMF or OECD. We suggest that you devote some time to developing this skill. Your future career can only be enhanced by your ability to communicate effectively in writing.
Report Structure -
Abstract
Introduction
The body of the report providing:
- An appropriate description and discussion of the current state of the Australian economy as reflected by the four economic indicators - economic growth, unemployment, inflation and trade in Australia and the economy in 2019. You also need to comment on the trends in these indicators since 2015.
- A succinct description of three major issues facing the Australian economy over the next 12 months.
Conclusion
Evidence in the report of a depth of research
Accuracy in referencing (Harvard Style)
Presentation, grammar, structure, etc.
Note - Need Assignment 1 only. Total Words 1000 words + 1 calculation question. Need Harvard reference. Number of ref: above 2 (if Reference is not needed, let me know).
Attachment:- Economics for Decision Making Assignment File.rar