Economics Assignment
Task
In this assignment you'll find Task 1: Economic
foundations and market forces, which comprises of six (6) questions which
you'll answer and submit.
A word count is set for each question (at the end
of each question). You must ensure your answer is below the word count.
Anything written after the word count has been exceeded will not count towards
your answer.
-Related
learning outcomes
This assignment
assesses the following unit learning outcomes:
1.
Use economic indicators and models to
understand and analyse real-world situations.
2. Use economic concepts and knowledge to
understand, explain and evaluate decision making by individuals, firms and
government.
3. Describe economic outcomes in markets
and how these are affected by market structure and the macroeconomic
environment.
4. Identify appropriate business
strategies and government policy to achieve positive outcomes (such as increase
profit, reduce market failure, or stabilise macroeconomic fluctuations).
5.Analyse current economic issues and
determine/evaluate responses by the relevant economic agents.
Answer
the following questions in a Word document. In your Word document, include only
the question number, followed by your answer, but do not provide the question
itself. You can draw and scan your graphs and then insert the image into
your word document.
Task 1: Economic foundations and market forces
Table
1: Number of labour hours required to produce a motorcycle and a guitar in
Ireland and Scotland.
One
motorcycle
|
One
guitar
|
|
Scotland
|
15 hours
|
5 hours
|
Ireland
|
9 hours
|
2 hours
|
Question 1. From the information provided in Table 1,
which country has an absolute advantage in the production of motorcycles? Which
country has an absolute advantage in the production of guitars? Explain. Approx.
number of words: 80.
Question 2. From the information provided in Table 1,
what is Ireland's opportunity cost of producing one motorcycle? Explain. What
is Scotland's opportunity cost of producing one motorcycle? Explain. Approx.
number of words: 80 + calculations.
Answer
questions 3, 4 and 5 using the information provided in Table 1-2 below:
Table
1-2: Quantity demanded and supplied for the 'The Theatre Company'
Price
($)
|
Quantity
demanded
|
Quantity
supplied
|
4
|
1000
|
400
|
8
|
800
|
400
|
12
|
600
|
400
|
16
|
400
|
400
|
20
|
200
|
400
|
Question 3. Draw the demand and supply curves for the 'The
Theatre Company'. What are the equilibrium price and quantity of entry tickets?
Explain why this is the equilibrium point. Approx. number of
words: 50.
Question 4. Explain, using the graph in Question 3 above, what
would happen if the price was initially $4? Identify any surplus or shortage on
the graph above. Approx. number of words: 150.
Question 5. What would happen to the demand curve, supply curve, price
and quantity if the theatre was to double its capacity? Draw the new graph and
explain. Approx. number of words: 80.
Read
the following short excerpt and answer Question 6.
The
RBA just scotched a theory about younger Australians choosing not to buy a
home.
Forget the perception that younger Australians are frivolous with
their money, or that they now prefer to rent than buy.
The real thing holding Australian first time buyers back from
buying a property is rapidly increasing house prices, says John Simon and
Tahlee Stone, economists at the Reserve Bank of Australia (RBA).
Rather than a shift in ownership preferences or demographic
changes in the years following the global financial crisis, Simon and Stone
acknowledge that higher prices are largely responsible for crowding out
prospective first home buyers (FHBs) from the market.
'Our results support the hypothesis that higher housing prices
have crowded out potential FHBs from the market,' the pair wrote in a
discussion paper released on the RBA’s website today.
Read more: The RBA just scotched a theory about younger Australians
choosing to not to buy a home (Links to an
external site.)Links to an external site. (Scutt 2017). Link is https://www.businessinsider.com.au/the-rba-just-scotched-a-popular-theory-about-younger-australians-choosing-to-not-to-buy-a-home-2017-9
Question 6. Using demand and supply analysis, how would the fact
that young Australians now prefer to rent than buy change the price and
quantity in the housing market (keeping all else constant). Briefly
contrast the impact of a change in preference to the counter explanation that
it is prices rising that is reducing quantity demanded for housing. Explain. (4
marks) - Approx. number of words: 250.
Referencing is Harvard.
Referencing
Cauchi, S 2015 Australia cuts 2015 iron ore
forecast by 10pc, Sydney Morning Herald, viewed 1 November 2017, <
http://www.smh.com.au/business/mining-and-resources/australia-cuts-2015-iron-ore-forecast-by-10-20150630-gi18dp.html#ixzz3tb8IbFdw>.
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