Introduction to Economics Assignment
Part A: Microeconomics
1. Consider the table below detailing the demand and supply curves for 19-inch colour TVs
|
Price of TVs ($)
|
Quantity demanded/month
|
Quantity supplied/month
|
|
200
|
1,000
|
2,500
|
|
180
|
1,200
|
2,200
|
|
160
|
1,400
|
1,900
|
|
140
|
1,600
|
1,600
|
|
120
|
1,800
|
1,300
|
|
100
|
2,000
|
1,000
|
a) Draw a diagram based on the above table and label the equilibrium price and quantity (the diagram does not need to be to scale).
b) Now assume that a TV is a normal good and incomes rise. Consumers are now willing and able to purchase 500 more TVs per month at every price. Show this change on your graph and explain what has happened to equilibrium price and quantity as a result.
2. Draw the market for bananas in equilibrium. Show and explain what would happen on your graph if at the same time i) more banana suppliers entered the market and ii) people's incomes went up. How would this affect the price and quantity of bananas in the market?
Part B: Macroeconomics
Consider the two sources below about the Chinese economy in 2005-2006.
Source 1: NBS: China's GDP grows 10.7% in 2006
China's gross domestic product (GDP) surged by 10.7 percent year-on-year to reach 20.94 trillion yuan (2.7 trillion U.S. dollars) in 2006, said Xie Fuzhan, head of the National Bureau of Statistics in Beijing on Thursday. It was the fourth straight annual double-digit growth rate for the world's fourth-largest economy, driven by hefty investment and rocketing trade, both of which registered a 24 percent year-onyear growth last year.
Source 2: Chinese Macroeconomic Data 2005-2006
a) Which phase of the business cycle do you think China was experiencing in 2006 based on the sources above? Why? (Hint: Consider the macroeconomic indicators)
b) From 2005 to 2006 how did components of Chinese Aggregate Demand change according to the sources above? How would this affect the Chinese economy in 2006?
c) Go to the TRADING ECONOMICS website and find China's current macroeconomic indicators for 2017. Based on China's inflation, GDP annual growth rate, unemployment rate and any other relevant statistics, what phase of the business cycle is China currently going through in your opinion? Support your answer with economic theory.
Attachment:- Assignment File.rar