# Assignment 1 Note that when you are answering questions that require mathematical calculations, you.

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 labelledgraphs 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&#39;s production possibility table for work and her average grades:

Choices

Production   possibilities

(hours per   week) A

B

C

D

E 0

20

40

60

80 60

55

45

30

0

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&#39;s combination of her grades and hours of work per week were below the curve asplotted above in Q1ai?

v. How could Joan push her combination of her grades and hours of work per week past the current curve?

b. After a periodof goodgrowing weatherAustralia produced a plentiful wheat crop- does this mean that it will not have a scarcity problemin regards to wheat? Provide reasons for your answer (300 words maximum).

Question 2

In February2018, it was reported that Australia&#39;s solar power capacity could almost double in a year.

a. Use demand and supply curves to show the doubling ofcapacity.

b. Use demand and supply curves to show what is likely to happen to demand over time in response to the capacity increases (see Q2a above).

c. Use demand and supply curvesof the solar powered industry and coal-fired power electricity industry to show what is likely to happen to demand and supply of solar power if the government introduces a tax on coal-fired power electricity.

Question 3

a. Explain in your own words, using demand and supply curves, the concepts of consumer and producer surplus.

b. Using demand and supply curves describe and illustrate what would happen to consumer and producer surplus if solar power capacity is increased.

c. The treasurer, Scott Morrison, has stated that business tax cuts will be good for business and workers. Is this a positive or a normative statement? Provide reasons for your answer (300 words maximum).

Question 4
a. Complete the table below outlining the demand for hot doughnuts in winter. In your calculations use the midpoint method to calculate the price elasticities. Price

(\$)

Quantity demanded Total revenue

(\$)

Percent change in price

Percentage change in quantity   demanded

Elasticityvalue

Assessment of Elasticity

0.50

16

1

13

1.50

10

2.00

7

2.50

4

3.00

1

b. Do you think the price elasticity of demand for hot doughnuts in summer would be the same as in winteror 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 5

ai. Complete the cost schedule below for a company operating in a free-market (remember that MC and MR values are placed midway between the output figures):

Output

Total Fixed Cost (TFC)

Total Variable Cost (TVC)

Total Cost (TC)

Average total cost(ATC)

Marginal Cost (MC)

Marginal Revenue(MR)

Profit

\$

\$

\$

\$

\$

\$

\$

0

100

100

1

220

2

300

3

390

4

530

5

690

ii. If the firm is operating in a perfect market where the market price for the good the company produces is \$150, how many items should this companyproduce in order to maximise profit? Explain your answer.

iii. Graph the average total cost, marginal cost, average revenue and marginal revenue curves.

b. In your own words explain the concept of diminishing returns and describe what will happen to marginal product, total output and marginal cost when diminishing returns start to occur.

Assignment 2

Requirement:

In February 2017, the Sydney Morning Herald presented the views of some economists regarding the performance of the Australian economy in 2017. For Assignment 2 you are required to firstly read this article and to then prepare a report on the current (i.e., August/September 2018)state of the Australian economy and compare its performance with state of the economy in August 2017. In completing your report it will be necessary to examine the latest figures and the August 2017 figures for the following four economic indicators – economic growth (GDP), unemployment, inflation and trade (including the terms of trade, the current account, net foreign debt and the value of the Australian dollar). 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 you believe are facing the Australian economy over the next 12 months and why you perceive 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
– appropriatein-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 yourselfinvolved 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.