Business Economics Assignment
Learning Outcomes
a. Identify and explain the key ideas that define economic way of thinking and the maximisation of scarce resources.
b. Analyse how prices are determined in a market.
c. Compare and contrast the key characteristics of various market structures and market strategies adopted by firms in different market environments.
d. Differentiate the objectives and consequences of macroeconomic policy in Australia and debate the conflicts between the achievements of those objectives.
e. Analyse economic fluctuations and Gross Domestic Product.
f. Describe and discuss the concept and consequences of unemployment.
g. Examine the relationship between exchange rate and international trade.
h. Compare monetary policy and fiscal policy in a macroeconomics context.
Description
In answering discussion questions, students are required to research and cite at least 10 references from peer reviewed articles (Wikipedia sources are not accepted). For peer reviewed articles, you are advised to use the MIT Library databases (e.g. Emerald Group of Publishing Limited, and Business Source Complete).
For each discussion question you are allowed to refer to concepts/context in prescribed text book, however, discussion will have to come from academic sources.
Discussion Question 1
Considering oil as an inelastic product, discuss why OPEC can not keep price of oil high? You need to consider type of good, price elasticity of demand and supply, and the time factor. Your answers must company two diagrams, one for each time frame.
Discussion Question 2
Discuss binding price ceiling and binding price floor with an example. Your answers must company two diagrams, one for each. You are allowed to refer to concepts/context in prescribed text book, however, discussion will have to come from academic sources.
Discussion Question 3
Discuss various measures of cost by completing the following table. This should include fixed and variable costs, average total cost, average variable cost, average fixed cost, and marginal cost. Show all of these in one diagram in relation to Quantity and Price.
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Quantity of soap sold per hour
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Total cost ($)
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Fixed cost ($)
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Variable cost ($)
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Average fixed cost ($)
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Average variable cost ($)
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Average total cost ($)
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Marginal cost ($)
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0
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8.0
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8.0
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0.0
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1
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8.30
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0.30
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2
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8.50
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0.50
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3
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9.80
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1.80
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|
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4
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10.10
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2.10
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5
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10.20
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2.20
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6
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10.60
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2.60
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|
|
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7
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11.0
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3.0
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|
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8
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11.30
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3.30
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|
|
|
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9
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11.60
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3.60
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|
|
|
|
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10
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12.0
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4.0
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|
|
|
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Discussion Question 4
Discuss inflation and monetary policies. Using two diagrams for parts a) and b) below, discuss:
a) how supply and demand for money determine the equilibrium price level.
b) Consequences of increase in money supply.
Discussion Question 5
In times of recession and inflation Reserve Bank of Australia (RBA) may consider changing the interest rates. Using two diagrams one for expansionary monetary policy and one for contractionary monetary policy discuss how quantity of money supplied and interest rates are linked.
Discussion Question 6
Assume that an economy is in equilibrium in terms of Price level based on consumer price index (CPI) and real GDP, with a CPI of 200 and real GDP of 500 (b$). The economy is experiencing high unemployment and the government intends to achieve near full employment by increasing real GDP to 550 (b$). How aggregate demand oriented expansionary fiscal policy by the government will increase aggregate demand? Discuss both a) demand-side fiscal policy and b) supply-side fiscal policy with a diagram for each.