Reference no: EM131306716

ASSIGNMENT: ECONOMICS

Read the following case study and answer the given question.

THE MACROECONOMICS OF POVERTY REDUCTION: THE CASE STUDY OF BANGLADESH

Adapted: Osmani, S.R; Mahmud, W; Sen, B; Dagdeviren, H; and Seth, A (2003), The Macroeconomics of Poverty Reduction: The Case Study of Bangladesh, United Nations Development Programme, The Asian-Pacific Regional Programme on Macroeconomics of Poverty Reduction.

QUESTION 1 -

Faster reduction in poverty in the 1990s has been accompanied by a worsening of income distribution. Thus, the Gini ratio for urban areas shot up from 0.32 in 1991/92 to 0.38 per cent in 2000, while the rural Gini increased from 0.26 to 0.30 during the same period.

1.1: Explain the above statement in simple economic language to an ordinary person in Bangladesh in your own words.

1.2: With reference to the above Case Study, discuss the sources of economic growth in Bangladesh and also explain the difference between demand factors and supply factors as sources of economic growth.

QUESTION 2 -

2.1: Using the given case study, identify and critically evaluate the main problems being faced by Bangladesh and recommend the policies or programmes that might be used to address these challenges.

2.2: Discuss some of the main economic lessons that can be derived from the given case study by other developing countries in the world.

QUESTION 3 -

3.1: Given that the demand and supply for rental accommodation in United States of America is given by the following equations respectively.

Demand: Qd = 100 000 - 4P .................................. Equation 1

Supply: Qs = 75 000 + P...........................................Equation 2

Compute:

3.1.1 The equilibrium price (Pe).

3.1.2 The equilibrium quantity (Qe).

Assume that government decides that landlords are charging exorbitant rental and hence passes a 'rent control' law in the United States of America that prevents rents from exceeding USD2000 per unit.

3.1.3 What would be the quantities demanded and supplied at the new legislated price and what would happen in the market. (Illustrate this situation using a diagram)

3.2: Economics is all about scarcity, choice and opportunity cost. Explain these concepts using a Production Possibility Curve (PPC) and also highlight the importance of this model in understanding Economics.

QUESTION 4 -

Economists need a deep understanding of price elasticity concepts. In that regard define and explain the various forms of price elasticity of demand and show how elasticity of demand influences the management decision making in respect of setting prices for their products and maximising revenue.

Attachment:- Case Study.rar