Three Problem-Solving Questions that require written answers
1. General information
1.1 This assignment is worth 20 per cent of total assessment and is to be submitted by
5.00pm, Friday 11 May 2018.
• There are 3 questions and answer all 3 questions, worth a total of 100 marks all together. Then the marks will be converted to a total of 20 marks scale to be uploaded in Moodle for 20 per cent of your total course assessment.
• A hard copy of the assignment must be submitted to KOI Librarian in Kent street campus by 3.00pm, Saturday 12 May 2018. You must keep the receipt after the submission for your own record. You are also required to upload an electronic copy of the assignment in Moodle Turnitin by 5.00pm, Friday 12 May 2018.
• Late submission will attract loss of 4 marks out of 20 marks (20 per cent), and the assignment submitted to the library after 5:00pm Monday 14 May 2018 will not be accepted.
1.2 This assignment is an Individual assignment
1.3 Names and ID numbers of students must be clearly printed on the Assignment Cover Sheet..
1.4 You must follow the appropriate format explained below. Not following the appropriate format will cause a loss of some marks.
• All written answers must be clearly typed and printed. Hand-written answers will NOT be accepted.
• All assignment questions and sub-questions must be typed in order at the heading.
• Answer each question on a different page. For example, if Question 1 (a) (b) (c) and (d) are answered on pages 1-2, then start Question 2 on page 3, etc.
• You must analyse, explain and show how and why you reached your answers. Providing just answers without explanation will not receive full marks.
• You must also draw and include appropriate and relevant graphs and tables together in your explanation. Draw them using Microsoft Power Point/Word/Excel, NOT hand-drawn.
1.5 Copying the assignment contents from other assignment is a serious violation of copy right. It will be penalized and will attract a VERY heavy loss of marks – “Fail”.
• Please remember that it is not difficult to identify the contents that are copied from others). Write the answers in your own English words.
• Please DO NOT SHOW work students in other. If you did, both the person who showed the assignment and the one who copied the assignment will be awarded zero out of 100 marks (i.e. 20%of course mark).
1.6 Each student must have a coordinator, who will submit a hard copy of the assignment to the KOI librarian and also upload an electronic copy of the assignment in Moodle Turnitin. Only ONE COPY of the assignment from each group is required to be submitted (& uploaded) by the coordinator of the group.
1.7 Make sure you discuss and work together for ALL THREE questions. You MUST read and check the assignment before submission, once completed.
Question 1: The Production Possibility Frontier [20 marks]
Table 1 – Production Capacity of Newland
Use information in Table 1.1 above to answer the following questions:
a. Using the above figures, map out the Production Possibilities Frontier (PPF) for the production of the Cars and bicycles (Hint! Use Microsoft Excel, for accuracy) (5 marks)
b. In your own words, while making use of the graph that you have created in part a, explain what the PPF is. Cleary state all assumptions and properties of the PPF. (7 marks)
c. Newland usually has a demand of 3,000 bicycles and 18,000 cars. Suddenly Newland receives notice that the demand has increased to 4,000 bicycles and 20,000 cars. Discuss and explain at least three possibilities of how Newland could meet that demand. (Hint: State any appropriate assumptions made). (8 marks)
END OF QUESTION ONE
Question 2: Part I: Tax Incidence [20 marks]
Suppose the demand for and supply of pizza functions are:
QD = 20 – 2P (1)
QS = P – 1 (2)
Where, QD is the quantity demanded; QS is the quantity supplied and P is the price. Suppose the, government imposes $3 tax per pizza purchased. Calculate the incidence of the tax and deadweight generated by the tax. Show all working steps and indicate your results on a correctly labelled demand and supply diagram. [20 marks]
Part II. Price Regulation [40 marks]
a. The US Farm Bill 2012 indicates that the domestic price of wheat is set at $300 per tonne, which is above the market equilibrium level of $250 per tonne, in order to support for domestic wheat growers. On a graph, show and explain the impact on the equilibrium quantity and price of wheat. [8 marks]
b. On a graph, explain the change the consumer surplus, producer surplus and the deadweight loss in the domestic wheat market. Assume that the US does not trade wheat internationally. [10 marks]
c. Calculate the changes in consumer surplus, producer surplus and deadweight loss. (Remember 1 kilo tonne = 1,000 tonnes) [12 marks]
d. Is the outcome of the US Farm Bill fair? Critically discuss. Your discussion should reflect the
fair rules and fair results notions of fairness. [10 marks]
END OF QUESTION TWO
Question 3: The Impact of Natural Disaster – 20 marks
Bush fires and drought have destroyed coffee plantations in Brazil, the world’s leading producer of coffee. Manufacturers of coffee products are discussing ways of averting a projected shortfall in coffee in the next five years. Nestle, manufacturer of Nescafe and Nespresso, is teaming up with Brazil to trial plantations of new coffee specie that could mature in twelve months.
With the aid of the demand and supply diagram, answer the following questions:
a. Analyse the impact of the drought and bush fires on the supply of coffee. [6 marks]
b. Suppose worldwide demand for coffee products increases soon after the drought and bushfires. Analyse the effect on the world equilibrium quantity and price of coffee. [6 marks]
c. Analyse the effect on the world equilibrium price and quantity of coffee, if the trial of the new specie is successfully. Clearly state any assumptions you make. [7 marks]
END OF THE ASSIGNMENT