Assignment Detail:- HI5003 Economics For Business - Holmes Institute
Question 1Assume that during the years 2022 to 2025 Woodland Republic could produce only two commodities: tractors and rice- Also, assume that Woodland Republic can procuce at any of the positions represented by the production possibility schedule below-
A
B
C
D
E
F
G
H
Tractors
0
2
4
7
9
11
13
14
Rice -in tons-
100
95
85
70
60
50
30
0
a- Suppose in 2022 the economy is producing at point D- What is the opportunity cost of producing 6 more tractors in 2023
b- Use the figure below to answer the questions that follow-
i- Suppose, in 2024 the Minister of Finance in Woodland Republic advises the World Bank that in order to increase rice production and tractor manufacturing, each sector requires AUD50 billion, or a total of AUD100 billion- This AUD100 billion is made available by the World Bank- Explain the impact of these AUD100 billion budgetary allocations to the economy of Woodland Republic-ii- Suppose in 2025Woodland Republic begins to manufacture fertilizers- Explain theimpact of the discovery of fertilizers on the Woodland Republic economy-
Question 2John plans to start a milk and pizza business in 2022- Suppose John owns a rental premises from which his rental earnings are AUD 3,000 per month- He asks the rental people to leave and uses the premises for the milk and pizza business-
The table below represents John's January business summary:
Item
Cost -AUD-
1 Milk truck
120,000
Milk stainless cans
20,000
Milk cooler
40,000
2 litre milk packs -Number of packs bought depend on demand- Assume January average expenditure-
30,000
Pizza ingredients -Ingredients used depend on demand- Assume January expenditure-
4,000
2 cashiers -Assume a cashier per section -Milk and Pizza-- Also, wages depend on hours worked- Assume January average wages per cashier-
3,000
2 bakers -Wages depend on hours worked- AssumeJanuary average wages per baker-
3,500
Pizza packaging boxes -Boxes depend on demand- Assume average January boxes used-
2,000
Pizza special oven
25,000
i- Milk production per day: 300 litres per day
Note: Assume 90,000 litres per month produced and bought-
ii- Pizza production per day is 500 pizzas- Assume 15,000 pizzas per month are produced and all that are produced are sold-
Use the table to answer the questions below-a- Calculate John's fixed cost and average fixed cost for eachsection-
b- Calculate John's variable cost and average variable cost for each section-
c- Assume John sells milk atAUD2-50 per litre- Also, assume John sells each pizza at AUD10-00- Calculate John's accounting profit and economic profit for the month of January-
Question 3Assume that Airbus and Boeing are the only firms that manufacture planes in the world- Answer the questions below-a- What is the market structure in which Airbus and Boeing operate???? Explain your answer using the market characteristics for the two firms -Airbus and Boeing--
b- Examine the market entry barriers that deter other firms from entering the market structure for Airbus and Boeing-
c- What do you understand by the term "Mutual Interdependence" for Airbus and Boeing-
Question 4a- In 2021, theWoodland Republic Bureau of Statistics publication indicated thatthe Consumer Price Index -CPI- of the country increased to 109-2 in 2021 from 106-5 in 2020- Calculate Woodland Republic's inflation rate in 2021-
b- The Woodland Republic's Population Secretariat published the following information in 2021:• Total population: 30 million• Labor force: 80% of the total population• Employed population: 21-5 million
Use the information provided to answer the following questions:i- Calculate the population that is excluded from the labour force in Woodland Republic in 2021 and indicate at least four sectors that are excluded from labour force-
ii- Calculate the Woodland Republic's unemployment rate in 2021-
Question 5
-i- Use two -2- coincidental indicators to explain the conditions that are experienced in a nation during a recession-
-ii- Examine the causes of business cycle fluctuations in a nation-
-iii- Suppose the following information was published by the Australian Bureau of Statistics in 2017:
Item
Amount -AUD billion-
Household consumption
5,029-81
Government consumption
20,340-92
Exports
1,386-39
Value of cocaine seized at Sydney Airport
20,500
Value of intermediate goods in tractor manufacturing
502,003
Gross private domestic investment
352-69
Imports
386-95
Components used in the manufacture of cars
40,000
Gifts
15,236
Government investment
88-19
Value of second-hand goods
500-00
Value of banned endangered species elephant tasks seized at Melbourne Airport
600-00
Use the information provided to calculate Australia's GDP in 2017
Question 6
Due to the severity of COVID 19 on households, the government of Australia announced Job Keeper Allowances to be given to the labour force that had lost employment-
a- Examine the impact of Job Keeper Allowances during the COVID 19 recession on Australia's economy-
b- Examine two reasons that could explain why the government of Australia terminated Job Keeper Allowances though COVID 19 still impacted Australia-
c- Assume the government of Australia spent AUD50 billion on allowances given to Job Keeper beneficiaries- Assume that despite the family financial stress, 15% of the Job Keeper Allowances was the total beneficiary savings-Further, assume all other factors remain constant- Calculate the total effect of the Australian government Job Keeper Allowancespending on aggregate demand for the economy-
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