Part 1: Firm Perspective

Read the below two sources below and then answer the questions.

Source 1: Competitive dynamics in the banking sector

Source 2: Collusion for Illusion (Opinion Piece)

1. Read the above articles and answer the following questions:

a) In your opinion, what type of market structure do Australian Banks operate in? Justify your answer with reference to the above article, research and theory.

b) Critically compare a collusive oligopoly market structure with perfect competition in terms of price, output, allocative efficiency and consumer and producer surplus. Support your analysis with economic theory and graphs.

c) Are there any situations where a market structure with less competition has some benefits? Why or why not? Briefly explain your answer with reference to at least two sources.

You may want to consider the following source: http://economicstudents.com/2013/07/why-did-our-banks-survive-the-gfc/

Part 2: In a perfectly competitive market for apples explain would happen in the short- run to the market and to individual producers if the price for pears went up. Demonstrate your answer using a diagram. With reference to the same diagram show what would happen to the market and individual producers in the long-run.

Macroeconomic Perspective

Consider the sources below from 2014 and answer the following questions:

Source 1: Spanish Growth Quickens, Says Central Bank

Bank of Spain Raises Its Economic Forecasts for This Year and Next By David Román

Source 2: Trading Economics Graphs

1. Us the above sources and some limited research to answer the following questions.

a) Based on the article and graphs above what phase of the business cycle do you believe Spain was in during 2013? Explain why with reference to theory and represent this phase of the business cycle using an aggregate demand and supply model.

b) Based on the article and graphs above what phase of the business cycle do you think Spain has entered in 2014? Why? Use your aggregate demand and supply model from part a) to demonstrate what happened to the economy in 2014.

c) Given Spain's most recent unemployment rate, if 17,353,000 people were currently employed how many people would be unemployed?

2. Read the article below from 2016 and answer the following questions:

a) Based on the above article what phase of the business cycle is the Indian economy experiencing in 2016? Justify your answer with reference to economics theory and support your analysis with a graph showing where the Indian economy is operating.

b) How would the falling energy costs affect the Indian economy in 2016? Why? Show this effect in your graph from a).

c) What macroeconomic indicator should be monitored closely in India in 2016? What can the Reserve bank of India do to control this indicator?

Do not forget to include a reference list for any sources apart from lectures or tutorials. You also need to include in text references. A referencing guide is available on the portal under assessments.

Attachment:- Assignment.rar