Reference no: EM132603721

Answer all the questions:

Question 1. During the recent COVID 19 situation the positive incentives were less like Bonuses, Gifts and allowances and negatives incentives were many like job losses, termination and cutting off the perks eligible. Comment above with the macroeconomics angle point of view.

Question 2. The Government has various tools available to deal with the Market Failure , the few of the tools available to the Government was
• Price Profit Regulations
• Restrictive Trade policy and practices
• Direct Controls or Regulations
• Patents and Law of Tort
• Subsidy Policy
• Tax Policy
• Foreign Exchange Policy. Briefly provide your views on all the above to predominantly sustain for an Economy in Market forces.

Question 3. The Abner Corporation, a retail seller of television sets, wants to determine how many tele vision sets it must sell to earn a profit of $10,000 per month .The price of each television set is $300, and the average variable cost is $100.
a. What is the required sales volume if the Abner Corporation's monthly fixed costs are $5,000 per month?
b. If the firm sells each television set at a price of $350 rather than $300, what is the required sales volume?
c. If the price is $350, and if average variable cost is $85 rather than $100, what is the required sales volume?

Question 4a. What are the factors that causes an increase (rightward or upward shift) in demand and supply? (Write down at least 10 points)
Question 4b. Why do the price of some goods like Airline tickets to Europe go up during the months of heaviest consumption, while others like sweet corn go down during the months of heaviest consumption?

Question 5. The following cost relates to Lincon company .Fill in the blanks with all the costs

Output	Total Cost	Total Fixed Cost	Total Variable Cost	Average Fixed Cost	Average Variable Cost
0	50	50	0
1	75
2	100
3	120
4	135
5	150
6	190
7	260

Question 6. Externalities and Air Transport

The Government recognizes the benefits that the expansion in air travel has brought to people's lives and to the economy of this country. The increased affordability of air travel has opened up the possibilities of foreign travel for many people, and it provides the rapid access that is vital to many modern businesses. But we have to balance those benefits against the environmental impacts of air travel, in particular the growing contribution of aircraft emissions to climate change and the significant impact that airports can have on those living nearby."

Air travel has increased five-fold over the past 30 years, and demand is projected to be between two and three times current levels by 2030.Some of our major airports are already close to capacity, so failure to allow for increased capacity could have serious economic consequences, both at national and at regional level. That must be balanced by the need to have regard for the environmental consequences of air travel. The Government believes that simply building more and more capacity to meet demand is not a sustainable way forward. Instead, a balanced approach is required which:

• Recognizes the importance of air travel to our national and regional economic prosperity, and that not providing additional capacity where it is needed would significantly damage the economy and national prosperity;"
• Reflects people's desire to travel further and more often by air, and to take advantage of the affordability of air travel and the opportunities this brings.
Seeks to reduce and minimize the impacts of airports on those who live nearby, and on the natural environment;"
• Ensures that, over time, aviation pays the external costs its activities impose on society at large - in other words, that the price of air travel reflects its environmental and social impacts;"
• Minimizes the need for airport development in new locations by making best use of existing capacity where possible
respect the rights and interests of those affected by airport development.
• Provides greater certainty tor all concerned in the planning of future airport capacity, but at the same time is sufficiently flexible to recognize and adapt to the uncertainties inherent in the long-term planning.

As part of this approach, the Government believes more needs to be done to reduce and mitigate the impacts of air transport and air development. At the global level, the government will play a major role in pressing for new solutions and stronger action by International bodies. And the White paper sets out proposals to bring the aviation within the European Union emissions trading scheme, to help limit the greenhouse gas emissions.

Answer all the questions:
1) What is meant by Externalities?
2) Outline the advantages and disadvantages of an expansion in air travel

Attachment:- Managerial Economics.rar