BUS102 GROUP ASSIGNMENT T118 ECO100 INDIVIDUAL ASSIGNMENT T218 ECO100 Introductory Economics T218, Individual Assignment due 22 September 2018 Page 1 ECO100 Introductory Economics Questions, Notes &...

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BUS102 GROUP ASSIGNMENT T118 ECO100 INDIVIDUAL ASSIGNMENT T218 ECO100 Introductory Economics T218, Individual Assignment due 22 September 2018 Page 1 ECO100 Introductory Economics Questions, Notes & Guideline for Individual Assignment Due 3.00pm, Saturday 22 September 2018 Three Problem-Solving Questions that require written answers 1. General information 1.1 This Individual assignment is worth 20 per cent of total assessment and is to be submitted by 3.00pm, Saturday 22 September 2018.  There are 3 questions worth a total of 100 marks. The marks will be converted to a total of 20 marks scale and uploaded onto Moodle for 20 per cent of your total course assessment. SUBMISSION  A hard copy of the assignment must be submitted to KOI Librarian in Kent street campus by 3.00pm, Saturday 22 September 2018. You must keep the receipt after the submission for your own record.  You are also required to upload an electronic copy of the assignment onto Turnitin by 11:59 p.m. Saturday 22 September 2018.  Late submission will attract a loss of 4 marks out of 20 marks (20 per cent), and assignments submitted to the library after 5:00pm Monday 24 September 2018 will not be accepted. FORMAT 1.2 You must follow the appropriate format explained below. Not following the appropriate format will cause a loss of some marks. 1.3 Names and ID number of student must be clearly printed on the Assignment Cover Sheet.  All written answers must be clearly typed and printed. Hand-written answers will NOT be accepted.  All assignment questions and sub-questions must be typed in order at the heading.  Answer each question on a different page. For example, if Question 1 (a) (b) (c) and (d) are answered on pages 1-2, then start Question 2 on page 3, etc.  You must analyse, explain and show how and why you reached your answers. Providing just answers without explanation will not receive full marks.  You must also draw and include appropriate and relevant graphs and tables together in your explanation. Draw them using Microsoft Power Point/Word/Excel, NOT hand-drawn. CAUTION 1.4 Copying the assignment contents from other group assignment is a serious violation of copy right. It will be penalized and will attract a VERY heavy loss of marks – “Fail”.  Please remember that it is not difficult to identify the contents that are copied from other group(s). Write the answers in your own English words.  Please DO NOT SHOW your work to other students. If you did, you and the person (s) you showed the assignment will be awarded zero out of 100 marks (i.e. 20%of course mark). ECO100 INDIVIDUAL ASSIGNMENT T218 ECO100 Introductory Economics T218, Individual Assignment due 22 September 2018 Page 2 Question 1 [50 marks] Australia and Canada have a free trade agreement in which, Australia exports beef to Canada. a. Draw a graph and use it to explain and illustrate the impact of trade on consumers, producers and the Australian economy. [5 marks] b. Now Canada imposes an import quota on Australian beef. Draw a graph and explain how this quota would influence the following factors in Canada: (i) price of beef; (ii) consumer surplus (CS) and producer surplus (PS); (iii) beef importers’ gain; (iv) efficiency of the beef market. [15 marks] c. The volume of import quota on Australian beef is less than Australia’s total export volume of beef to Canada. Explain how this import quota would influence the following factors in Australia: (i) quantity of beef exported to Canada; (ii) price of beef; (iii), consumer surplus (CS) and producer surplus. [15 marks] d. Suppose that the government decides to subsidise exports of beef by paying a certain amount for each tonne sold overseas. Explain how the export subsidy would affect the following factors in Australia: (i) domestic price of beef; (ii) the quantity of beef produced; (iii) the quantity of beef consumed, and the quantity of beef exported; (iv) consumer surplus, producer surplus, and government revenue. [15 marks] Question 2 [30 marks] “More than one billion of cups of coffee are consumed in Australia’s cafes, restaurants and other outlets each year, an increase of 65 per cent over 10 years. People are drinking less ‘instant coffee’ as espresso becomes more popular and new speciality coffee shops have been popping up all over Australia to satisfy demand for daily caffeine fix. Not only are people drinking more coffee, they are becoming more coffee-savvy and want premium brew even if it costs more.” Answer the following questions after reading the news clip above. a. How would you classify the espresso coffee market; are firms price takers or price makers? Explain. [4 marks] b. With the aid of an appropriate economic model, explain why there has been such an explosion in the number of coffee chains in Australia over the past ten years. [10 marks] c. Would firms in the market making positive economic profit in the long run? Explain. [6 marks] d. Would the impact of government subsidy to each existing firm change your answer in part (c) in the short run? Explain. [10 marks] ECO100 INDIVIDUAL ASSIGNMENT T218 ECO100 Introductory Economics T218, Individual Assignment due 22 September 2018 Page 3 Question 3 [20 marks] Suppose the tea market can be described by the following equations: Demand: P = 10 – Q Supply: P = Q -4 where p is the price in dollars and Q is the quantity in kilograms. a. What is the equilibrium price and quantity? [4 marks] b. Suppose the government grants a subsidy of $1 per kilogram of tea produced. What will the new equilibrium quantity be? What price will the buyer pay? What amount per kilogram (including the subsidy) will the seller receive? What will be the total cost to government? [12 marks] c. Draw the demand and supply diagram of the tea market and indicate the results in parts (a) and (b) on it. [4 marks] END OF ASSIGNMENT
Answered Same DaySep 26, 2020ECO100ICMS (International College of Management Sydney)

Answer To: BUS102 GROUP ASSIGNMENT T118 ECO100 INDIVIDUAL ASSIGNMENT T218 ECO100 Introductory Economics T218,...

Soma answered on Sep 28 2020
148 Votes
Question 1 [50 marks]
Australia and Canada have a free trade agreement in which, Australia exports beef to Canada. a. Draw a graph and use it to explain and illustrate the impact of trade on consumers, producers and the Australian economy. [5 marks]
Price of beef
Gain from trade
SS
Pw
Price with free trade
No trade price
DD
Quantity of beef
Exports
There is a free trade agreement between Australia and Canada where Australia export
s beef to Canada. The free trade price is greater than Australia’s domestic price. As beef shipped from Australia to Canada, the quantity produced in Australia is greater than their consumption. The extra production is being exported to Canada. On the other hand, the free trade price of beef is less than Canada’s domestic price. Thus Canada is interested to buy beef at lower price from Australia. The consumption of beef in Canada is more than what it can produce at the domestic level. Exports of beef to Canada will reduce the supply of beef in domestic economy Australia raising its price. On the other hand, the imports from Australia will increase the price of beef in Canada. When the price of beef becomes equal in both Canada and Australia then there will be no incentive to trade for both the countries.
The exports of beef to Canada has vast implications to Australian economy. The producers will be benefitted as they are selling their product at a higher price to Canada. Consumers in Australia will be worse off as they have to pay higher price than the no trade price. There is a rise in consumer surplus in Australia compare to the consumer surplus of no trade situation. As far as the social surplus is concerned, there will be an increase in social surplus in Australia as shown by the shaded area in the above diagram. Needless to mention, the social surplus in Canada has also increased. Both Australia and Canada are better off after the free trade than they would be without trade. (Microeconomics, n.d.)
b. Now Canada imposes an import quota on Australian beef. Draw a graph and explain how this quota would influence the following factors in Canada: (i) price of beef; (ii) consumer surplus (CS) and producer surplus (PS); (iii) beef importers’ gain; (iv) efficiency of the beef market. [15 marks]
Price of beef
SS
A
PFT
D
c
B
H
G
F
E
DD
Quantity of beef
Canada is the importing county whose demand and supply curve are illustrated in the above diagram. PFT is the free trade price which is below the domestic price of beef in Canada. At the free trade price, domestic demand is more than domestic supply- the excess demand is imported from Australia.
The free trade quantity of beef imports from Australia is shown by the yellow line. Now Canada has imposed an import quota that is represented by the red line segment.
i) Price of beef will increase in Canada.
ii) Consumers in the importing country Canada will be worse off because a fall in their consumer surplus. Due to quota the price of beef and its substitute will increase in Canada – this would cause the consumer surplus to fall. The CS has reduced by the area –(A+B+C+D).
iii) Producers in importing country will experience an increase in producer surplus thereby
they are better off now. As the price has increased producer surplus has increased by the area +A
iv) Quota rents is the area+ (C+G). Now who receives the quota rent tat depends on how Canada government administers the quota.
V) Efficiency gain will be there in Canada. There will be an increase in national welfare +G-(B+D).
c. The volume of import quota on Australian beef is less than Australia’s total export volume of beef to Canada. Explain how this import quota would influence the following factors in Australia: (i) quantity of beef exported to Canada; (ii) price of beef; (iii), consumer surplus (CS) and producer surplus. [15 marks]
It is important to understand the effects of import quota on Australia. As a result of quota, the consumers in Australia will experience an increase in the consumer surplus. Decrease in the domestic price will increase their economic wellbeing. Consumer surplus for Australian consumers will increase by the area +e.
Producer surplus among the producers in Australia will come down because of the fall in domestic prices. As the price fall in Australian market, it will also cause the output to fall and unemployment to rise. Producer surplus will decrease by the area represented by –( e+f+g+h)
Unless Canada gives the quota...
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