Quantitative Methods Economics, Business and Finance代写

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ECON131

Quantitative Methods in

Economics, Business and Finance

Session 2, 2017

Assignment (v1)

Due: November 17th, 2017, 11 am

PLEASE READ THIS DOCUMENT CAREFULLY

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your own version of the assignment by using your own login access to the ECON131 iLearn

site. If you submit a version of the assignment that you have not been assigned you will

receive a mark of zero.

Quantitative Methods Economics, Business and Finance代写

 Answer ALL questions, clearly and in your own words. ALL relevant working must be shown.

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make sure you submit your assignment using the cover page in the iLearn assignment

folder. 10 marks will be deducted if you attach the wrong cover page.

 Please attach two blank pages to the end of your assignment.

 You must keep a copy of your assignment.

Marks: The maximum mark for this assignment is 85.

The assignment consists of four sections, A (25 marks), B (25 marks), C (15 marks) and D

(10 marks).

A further 10 marks will be awarded for the quality of the presentation of the

assignment.

Due date: On or before 11 am November 17th, 2017. Submissions made after this time will receive

a mark of zero. Extensions of time over this due date will be granted ONLY in cases of

serious illness or other exceptional circumstances. In such cases, a formal disruption to

studies application must be submitted within 5 workings days of the due date. Please see

BESS for advice on this procedure.

Plagiarism: Each assignment must represent the student's own work. In particular, this means that

the written answers submitted by the student should be composed by that student. The

copying of another student's answer, textbooks or any website, is clearly regarded as

plagiarism. All assignments will be scanned by software that detects plagiarism. Cases of

plagiarism will be dealt with severely. For further information on plagiarism and how to

avoid it, please refer to the unit outline.

Section A: Wind Power Generation (25 marks)

Wind power generation capacity has been growing worldwide since the early 1990s. Table 1 shows the

installed wind generation capacity (measured in megawatts, MW) in the top 10 countries, as at the end

of 2011.

Country MW

China 62,364

United States 46,919

Germany 29,060

Spain 21,674

India 16,084

France 6,800

Italy 6,737

UK 6,540

Canada 5,265

Portugal 4,083

Rest of the world 32,143

Total 237,669

Table 1 Installed wind power generation capacity, end-

2011 (IRENA, 2012).

Figure 1 Global wind power additions (GW) by calendar year

(IRENA, 2012).

1. At the end of 2011, what percentage of the world’s installed wind generation capacity was in

China? (1 mark)

2. Consider table 1. If you assume that other countries’ capacity doesn’t grow from the 2011

figures, what amount would China have to expand its capacity in order to have 40% of the

world’s capacity? (3 marks)

3. World installed wind generation capacity increased by 41 GW in 2011, and by 39 GW in 2010. By

what percentage did world wind power generation increase during 2010? (3 marks)

4. By what percentage did world wind power generation increase, between the end of 2009 and

the end of 2011? (3 marks)

5. Suppose the annual rate of increase in (3) continues each year, from the end of 2011. By what

percentage will world wind power generation have increased by the end of 2020? (3 marks)

6. Under the same assumptions as (5), how long will it take for world wind power capacity to

double? (3 marks)

7. Write a general expression for the number of years it would take for world wind power capacity

to increase m times over, if it grows at the rate given in (3). (3 marks)

8. In reality, what has happened to worldwide wind power generation capacity since the end of

2011? Is this in line with your expectations of growth based on your answer to (5)? Explain why

this may or may not be the case. Provide evidence from your own research to support your

answer. (6 marks)

Section B: Gross Domestic Product (GDP) (25 marks)

In this section, we consider some issues with measuring “well-being” and “sustainability.” For a much

more detailed discussion of these topics, see the report by Stiglitz, Sen, and Fitoussi (2009).

A central focus of sustainability is the measurement of human “well-being,” so that economic policies

can be designed and evaluated against the rubric of maximizing the welfare of the people affected.

A popular way to measure people’s well-being is by Gross Domestic Product (GDP), which is the final

value of all goods and services in the economy. GDP includes everything produced by the economy,

including investment and goods and services not consumed by individuals.

The following model for consumption is proposed:

C = aY + b (1)

where C is consumption, a is the marginal propensity to consume, b is autonomous consumption, and Y

is GDP.

1. In what sense is equation 1 a model of human well-being? (3 marks)

2. Suppose a country was comprised of two regions, A and B. The GDP of each region is given by Y A

and Y B , respectively. Assuming equation 1 holds, write down an expression for the whole

country’s GDP and its level of consumption. (2 marks)

3. Re-write this equation as a formula for the level of GDP in region B (denoted Y B ), as a function

Y B (C,Y A ) of total consumption (C) and GDP in region A (Y A ). (3 marks)

4. Treating GDP in region A as a fixed number, sketch this function with GDP in region B on the

vertical axis and consumption on the horizontal axis. (3 marks)

5. What is the slope of the function? Is GDP in region B associated with a higher, or lower, level of

well-being? Explain your answer. (3 marks)

6. Suppose region A was very rich, and region B was very poor. Does GDP, as a measurement of

well-being, capture this inequality? (3 marks)

7. A loaf of bread costs about $6. A ticket to the opera costs about $150. How much does each one

contribute to GDP? Do you think this adequately reflects its contribution to human well-being?

(4 marks)

8. Suppose two identical countries possess identical, extensive forests. Country 1 decides to

capitalize on this asset, by harvesting and selling the timber as paper pulp and building materials

within a year, earning $100 million in the process. Country 2 decides to protect its forests, and

doesn’t harvest. According to the GDP measure of human wealth, which country is better off?

Do you agree? Explain why or why not? (4 marks)

Section C: Ecological Footprint (15 marks)

The Ecological footprint (EF) measures how much of the regenerative capacity of the biosphere is used

up by human activities. It is the sum of productive land and water area required to support the

population and provide the resources it consumes, absorb its waste and provide infrastructure (Stiglitz

et al., 2009, p. 244).

Figure 2: Humanity’s ecological footprint by component 1961-2005

1. According to the EF, is the human population living at, beyond or below the Earth’s natural

biocapacity? For how long has this been the case? Is this sustainable? (1 mark)

2. If you assume that the total land use can be approximated by a linear function, what is the

approximate slope of the total land use of the EF? What are the units of measurement in this

function? Give the equation of, and sketch this line, with EF on the vertical axis and year on the

horizontal axis. (3 marks)

3. If this trend of total land use continues, what will land use be in 2050? (3 marks)

4. Which is the largest component of land use according to the EF? At what rate is it growing? (3

marks)

5. Use the data presented in figure 2, along with your answers to this section, to suggest a policy to

make land use sustainable. (5 marks)

Section D: LED Lighting (10 marks)

The City of Sydney is an area covering over 26km 2 , and is one of Australia’s most important social and

economic centres. As part of Sydney 2030, a study into the city’s long-term sustainability, the city

council committed to reducing its carbon footprint 70% over the next 20 years.

A study found that around 31% of the city’s carbon emissions arise from public lighting. So, in 2011, the

City of Sydney announced a project to replace its lighting systems with energy efficient LED lights. It

would choose lighting systems based on both their economic and environmental value. After a

consultation period, the City chose a supplier in late 2011 to replace 6,448 luminaries (lights).

Before the project, suppose that the 6,448 luminaries slated for replacement consumed 5,252,613 kWh

of electricity annually. In 2010/11, the annual lighting bill was $654,476. Suppose that the new LED lights

will consume considerably less power, just 2,595,743 kWh per year.

1. Bulk, unmetered power is billed on a “per KWh” basis, with no additional costs. What will the

annual electricity bill be when all the lights are installed? (Assume the price of electricity is

constant.) What are the private savings for the City of Sydney in the first year? (In other words,

how much less will the city pay?) (2 marks)

2. The City of Sydney calculates carbon emissions on the assumption that each kWh of electricity

causes 1.07kg of CO 2 emissions. On this assumption, how many tonnes of CO 2 emissions per

year will the project prevent? The City of Sydney assumes a social cost of $17 per tonne of CO 2 .

Using your own research briefly explain what is meant by the term “social cost” in this situation

and calculate the social savings of this project, in the first year? (4 marks)

3. Suppose the City of Sydney decides to award the contract if, after including CO 2 savings in

revenue, the project breaks even at the end of the 12 th year. What is the highest price the City

should accept for this project? Ignore inflation, and assume a social discount rate of 5%. (4

marks)

END OF ASSIGNMENT

Assessment cover sheet

Declaration

I certify that:



This assessment is my own work, based on my personal study and/or research;



I have acknowledged all material and sources used in the preparation of this assessment, including any

material generated in the course of my employment;



If this assessment was based on collaborative preparatory work, as approved by the teachers of the unit, I

have not submitted substantially the same final version of any material as another student;



Neither the assessment, nor substantial parts of it, have been previously submitted for assessment in this or

any other institution;



I have not copied in part, or in whole, or otherwise plagiarised the work of other students;



I have read and I understand the criteria used for assessment;



The assessment is within the word and page limits specified in the unit outline;



The use of any material in this assessment does not infringe the intellectual property / copyright of a

third party;



I understand that this assessment may undergo electronic detection for plagiarism, and a copy of the

assessment may be retained in a database and used to make comparisons with other assessments in future.

Work retained in a database is anonymous and will not be able to be matched to an individual student;



I take full responsibility for the correct submission of this assessment in the appropriate place with the

correct cover sheet.

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the Handbook of Undergraduate Studies or mq.edu.au/policy/docs/academic_honesty/policy.html

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businessandeconomics.mq.edu.au/for/new_and_current_students/undergraduate/bess

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Quantitative Methods Economics, Business and Finance代写