ECO5000 Assignment 2 代写 Short Answer Questions/Problems

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ECO5000 Assignment 2 代写 Short Answer Questions/Problems

ECO5000 Assignment 2

Short Answer Questions/Problems (seven) at 5% each for 35% total

Covering Modules 2, 3, 4 & 5

Each question maximum length of one (1) A4 page, font size 12

Each question marked out of five (5)

Due: Monday 9 October 2017 at 12 midnight (AEST)

Instructions

A cover page will go at the front of your assignment submission. It must contain

the following information at a minimum: Name (in full), USQ student number.

The answer to each question shall have a maximum length of one (1) A4 page,

font size 12. Content which goes over the one page limit per question will not be

marked.

Maximum length of your submission shall therefore be eight (8) pages.

References (if needed and up to a maximum of three) should be placed at the end

of your answer to each question.

Each question shall be marked out of five (5).

Files extensions that can be submitted are: doc, docx, rtf.

Title your file with your FULL complete name i.e. Surname first, then First names.

Submission is through the Assignment 2 portal which will be on the front page of

the study desk.

ECO5000 Assignment 2 代写 Short Answer Questions/Problems

Question 1

A movie cinema has identified two groups of customers in the market:

students and adults. To gain a concession students just have to show their

student card when buying a ticket. Each ticket costs the cinema $4

regardless of whether it is to a student or an adult. Use the following two

tables to answer each part of the question below:

Adult Buyers Students – Concession Buyers

Price Quantity Price Quantity

20 2 12 1

18 4 10 2

16 6 8 3

14 8 6 4

12 10 4 5

10 12 2 6

8 14

6 16

4 18

2 20

a) Explain what direct price discrimination is.

b) What is the effect on producer surplus, and consumer surplus from

the practice of price discrimination?

c) What prices will the cinema charge to maximise profit for adults and

students each?

d) Calculate the consumer surplus to adults and students separately

when the business uses price discrimination.

e) Calculate the consumer surplus when the business does NOT use

price discrimination (Hint: combine the demand curves from both

high and low value customers)

Question 2

Use the following table for this question

Good Own Price Elasticity of Demand

Cigarettes -0.50

Alcohol -1.00

Soft Drink -1.50

(a) If the government could raise taxes on one good, which product should

the government increase tax rates in order to raise tax revenue? Briefly

explain why.

(b) Which of the three products has a unitary elastic demand curve?

cigarettes by 20%, what percentage of tax would they have to levy on

cigarette consumption? Show your working.

(d) If the government wants to decrease the quantity consumed of alcohol

by 20%, what percentage of tax would they have to levy on alcohol

consumption? Show your working.

(e) If the government wants to decrease the quantity consumed of soft

drink by 30%, what percentage of tax would they have to levy on soft drink

consumption? Show your working.

ECO5000 Assignment 2 代写 Short Answer Questions/Problems

Question 3

Carl is the lead engineer on a smart HVAC cooling system that works with

minimal energy and is voice activated. Given the revolutionary nature of

the system, it took many failed tries to create a system that actually

worked, at a cost of $30,000. Now each unit sells for $6500 and it costs

$5000 in raw materials and labour to produce.

(a) What costs should Carl take into consideration when deciding to service

the order for an additional unit? Why?

(b) Carl receives an order for four new units for a customer, but when he

takes the order to his manager, the manager is enraged and asks Carl why

he wanted to produce something at a loss. What costs would the manager

be looking at to come to this conclusion?

Question 4

Energy/utility companies can use a mix of plants using different energy

sources to produce electricity. Mainly these are coal fired plants but

increasingly they are relying on gas turbines. Technological improvements

in hydraulic fracturing, or “fracking,” have decreased the cost of extracting

smaller pockets of natural gas.

Using labelled diagram(s) indicate and describe what effect fracking has on

the supply and demand for coal.

Question 5

The market for cigarettes in a country is dominated completely by two

firms, Chokoe Ltd and Fumed Lungs Ltd. The market size is fixed at $8

billion. Each firm can choose whether to advertise or not. Advertising costs

$1 billion for each firm that advertises. If one firm advertises and the other

does not, then the firm advertising captures the whole market. If both firms

advertise, they split the market 50:50 and pay for their respective

advertising. If neither advertises, they split the market 50:50 but without

the expense of advertising.

(a) Draw a game table to describe this game.

(b) What strategy would you advise Fumed Lungs Ltd to follow?

(d) Is there an outcome that would make both firms better off? Why aren’t

they able to achieve this outcome?

Question 6

In 2013 the Australian coal producer, Yancoal, operated at a loss of $832

million. Yancoal has committed to long-term contracts (30 years) for access

to railway and port facilities for transporting its coal; and it is required to

make large payments for those facilities regardless of whether it uses them.

Is it possible that – despite making a large loss – it was still profit-

maximising for Yancoal to remain in operation in 2013? Explain why.

Question 7

Insurance firm A is offering motorists a discount on their insurance policies

if they are willing to install a device in their cars that monitors their driving

behavior. Another insurance firm B offers contracts to motorists where the

insurance premium they pay varies with distance travelled.

Why would the insurance firms be willing to offer these types of contracts

compared to the usual approach of setting insurance premiums based on

motorists’ characteristics, such as age and driving history?

ECO5000 Assignment 2 代写 Short Answer Questions/Problems