Student Number: (enter on the line below) Student Name: (enter on the line below) HI5003ECONOMICS FOR BUSINESSFinal AssIGNMENt Trimester t 1, 2021 Assessment Weight: 50 total marks Instructions: All questions must be answered by using the answer boxes provided in this paper.Completed answers must be submitted to Blackboard by the published due date and time.Submission instructions are at the end of this paper. Purpose:This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit Assessment Question Week 2 and 3 Demand and Supply, and Elasticity Question 1 7 Marks After the devastating typhoon Haiyan in the Philippines, the government and donor agencies embarked on rehabilitating rice production to avoid hunger and starvation. As a result, Philippines experienced a rice bumper harvest which led to the equilibrium price to decrease to AUD 1.50 per kilogram. To reduce poverty, the government decided to increase the price of rice to AUD 2.00 per kg. Suppose the figure below represents rice production by Jane a farmer in rural Philippines, answer the questions below. Examine the effect of government price legislation on Jane a farmer in rural Philippines (3 Marks) ANSWER: ** Answer box will enlarge as you type Calculate the price elasticity of demand using the midpoint formula for rice. (1 Mark) ANSWER: What is the price elasticity of demand for rice? Based on your answer, is rice a necessity? Explain your answer. (3 Marks) ANSWER: Assessment Question Week 4: Production costs Question 2 7 Marks John was a high school teacher earning a net salary of $54,000 per year. After working for one year, he quit his job to start his own milk bar business. In order to start the business, John borrowed $40,000.00 from the bank and was paying 5 percent interest per year. Also, John withdrew $ 50,000 from his savings account. He had been earning 5 percent interest per year for this account. John’s first year of business can be summarised as follows: ItemAmount $Revenue- Fresh milk section250,000Revenue- Yogurt Section180,0002 Cashiers expense (wages per worker)(40,000)Truck expense(80,000)Manager expense(60,000)Milk sales assistant expense(30,000)Equipment expense(50,000)Motorcycle expense to ease movement in city(30,000)2 milk freezers (cost per freezer)(5000) Based on your calculations of accounting profit and economic profit, would you advise John to return to his teaching job or continue with the milk bar business? Show your work! (7 marks) ANSWER: Assessment Question Week 5 and 6: Market structure Question 3 7 Marks Adidas is one of the high-class sports shoe dealers in Melbourne with the following short run cost curves. Answer the question that follow Use 2 characteristics to explain the market structure for Adidas Sports Shoe Company. (4 marks) ANSWER: Calculate this firm’s profit or loss for Adidas shoe company. (3marks) ANSWER: Assessment Question Week 7 and 8 Measuring the size of the economy Question 4 7 Marks The table below is extracted from Khada Republic, Bureau of Statistics records for 2019-2020. Use the information in this table to answer the questions that follow. ItemBase year 20192020ProductionPriceProductionPriceUsed cloth (units)4,00050.00500060.00Components used tractor factory production8,000500.00110001,200.00Cloth8,00025.0012,00030.00Beef gifts during cultural festival1,5002.001,7003.00Milk litres5,0001.307,0002.50Computers2000500.002,500600.00Printers500300.00400355.00Raw materials for car assembling plant4500250.004450 Calculate Khada Republic’s nominal GDP, real GDP in 2020 and GDP deflator (6 Marks) ANSWER: Examine the importance of a GDP deflator for Khada Republic (1 Mark) ANSWER: Assessment Question Week 9 and 10 Inflation and unemployment, and Macro economics Question 5 Marks 11 In order to improve the living standards of the people in Philippines after the devastating typhoon Haiyan, the government decided to increase the labour wage per hour from AUD 17.50 to AUD 25.00. Also, Philippines experienced structural unemployment and frictional unemployment. What is the hardest type of unemployment that Philippines experienced as a result of typhoon Haiyan? Explain your answer. (4 marks) ANSWER: Use the figure below to examine the effects of the government minimum wage of AUD 25.00 in Philippines. Examine the effect of government minimum wage of AUD 25.00. Assume the increase labour is equivalent to the total labour force and calculate the unemployment rate (3 Marks) ANSWER: The figure below indicates that the aggregate demand curve slopes left to right downwards. Explain the factors that account for the shape of the Aggregate demand curve. (4 Marks) ANSWER: Assessment Question Week 10 and 11 Fiscal policy and Monetary policy Question 6 11 Marks The government of Australia has embarked on various policies in order to reduce the severity of COVID 19 on the economy. Has COVID 19 caused economic expansion or a recession? Explain your answer using at least two economic effects on the economy of Australia. (2 Marks) ANSWER: Examine the effects of the fiscal policy instruments that the government of Australia has adopted on the economy. (9 Marks) ANSWER: END OF TUTORIAL ASSIGNMENT Submission instructions: Save submission with your STUDENT ID NUMBER and UNIT CODE e.g. EMV54897 HI5003Submission must be in MICROSOFT WORD FORMAT ONLYUpload your submission to the appropriate link on BlackboardOnly one submission is accepted. Please ensure your submission is the correct document.All submissions are automatically passed through SafeAssign to assess academic integrity.
