Answer the following questions in a Word document. In your Word document, include only the question number followed by your answer—do not provide the question itself. You can draw and scan your graphs...

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Answer the following questions in a Word document. In your Word document, include only the question number followed by your answer—do not provide the question itself. You can draw and scan your graphs and then insert the image into your Word document. Please do not attach a cover sheet to your assignment.


You can insert pictures in your document, but they must be low-resolution pictures. You must have 20 words in the document before the first picture or Turnitin will reject the file. If your file is larger than 1–2 MB, then convert your file to a PDF before uploading it in to Turnitin.


We strongly encourage you to work with your eLA and your fellow peers; however, you must submit your own work in your own words. If we find significant overlap between answers provided by different students, then all students with matching answers will fail that question. Don’t share completed answers with others.


Task 1: Economic foundations and market forces


Read the following and answer Questions 1 and 2.



Consider two individuals, Jane and Mark, who can produce both umbrellas and raincoats. Jane can produce 30 umbrellas or 40 raincoats in an hour and Mark can produce 25 umbrellas or 25 raincoats in an hour.



Question 1.What is absolute advantage?From the information provided, who has an absolute advantage in the production of umbrellas? Who has an absolute advantage in the production of raincoats?
(1mark)–Wordcount60



Question 2. What is opportunity cost?From the information provided, what is Jane's opportunity cost of producing one umbrella? Explain why. What is Mark’s opportunity cost of producing one raincoat? Explain why.(2 marks) Maximum number of words: 80 + calculations




Answer Questions 3 and 4 using the information provided in Table: Quantity demanded and supplied for Summer Spritz

Table: Quantity demanded and supplied for Summer Spritz

































Price ($)

Quantity demanded

Quantity supplied


41,000400
8800500
12600600
16400700
20200800


Question3.The celebrity-endorsed drink 'Summer Spritz' has hit the shelves. Draw the demand and supply curves for Summer Spritz. What are the equilibrium price and quantity of drinks? Explain why this is the equilibrium point.(1 mark) Maximum number of words: 50 + graph



Question4.Using the graph in Question 3, explain what would happen if the price was initially $4? Identify any surplus or shortage on the graph. What would need to happen for the surplus/shortage to be removed?(2 marks) Maximum number of words: 150 + graph





Question 5.Consider the market for flour now that it is back on the supermarket shelves. Assume that only two brands of flour are available—Blue Wings and Molly’s Mills—and the market is initially in equilibrium. Using the demand and supply framework, explain what would happen in the market for Blue Wings if the price of Molly’s Mills was to increase. Include a graph in your answer.(2 marks) Maximum number of words: 150 + graph




Read the following short excerpt 'House prices rise with regional market outperforming capital cities, CoreLogic data shows' (Terzon 2021) and answer Question 6.



There has been intense speculation about Australians choosing to relocate regionally during the pandemic, as working from home arrangements make it easier for people to move away from big cities where major employers are typically based.


"People can have the best of both worlds and live in a marketplace with lifestyle benefits and lower prices, as well as commute back to big cities if they need to,' Mr. Lawless [CoreLogic research director] said.


While ABS population data out in November did show regional relocation trends during 2020, it also showed this trend had been happening in some locations pre-COVID.
For instance, people leaving Melbourne for regional Victoria had already been trending up pre-2020, with capital city house prices from 2017 reflecting this.


– (Terzon, 4 January2021)




Question 6A.Using demand and supply analysis, and with the aid of a graph, explain how the fact that more Victorians are looking for a tree-change is affecting house prices and quantity in regional towns. Make sure you identify any important determinants of demand and/or supply, and identify any shortage or surplus and how this affects quantity.



Question 6B.Prior to COVID-19, affordability of regional housing was already driving up house price growth. Using a graph and words, explain how affordability issues for houses in Melbourne were affecting house prices and quantity in regional towns. Make sure you identify any important determinants of demand and/or supply, and identify any shortage or surplus and how this affects quantity.


Contrast the two forces and explain why it may be important to understand the difference between them if you are a property developer.(4 marks) Maximum number of words: 350 + graph


Task 2: Elasticity



Question 7.Consider the following two products: a sports car and housing. Which product would have a higher price elasticity of demand in absolute value? Explain your answer including identifying the determinant of elasticity.(1 mark) – Word count 60



Question 8.Consider the following two products: sandwiches sold in a cafe and hotel accommodation in Melbourne on the weekend of the AFL Grand Final. Which product would have a higher price elasticity of supply in absolute value? Explain your answer including identifying the determinant of elasticity.(1 mark) – Word count 60



Question 9.A storm in Queensland has destroyed pineapple crops across the region. Some pineapple farmers could not prepare for this and their crops were destroyed. Fortunately, some farmers did not lose any crops. Assuming that the demand curve for pineapples is inelastic, were the farmers collectively better or worse off? Has the collective revenue of the group increased, decreased or remained unchanged? Draw a graph to support your answer.(2 marks) - Word count 100 + graph

Answered 263 days AfterMar 09, 2021

Answer To: Answer the following questions in a Word document. In your Word document, include only the question...

Komalavalli answered on Nov 28 2021
110 Votes
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