Assignment Solution on PRBE001 – Economics For Managers Assignment Australia. Introduction and Background: The microeconomics deals with the behavior of individual and small businesses in making a decision within restricted resources. In the market where goods or services are bought and sold, microeconomics deals with the ways the decisions and behavior affecting the demand and supply of goods and services (DeLeeuw, 2014). Again, in a national context, the microeconomics deals with effects of economic policies analyzing the relative pricing of goods, services, and allocation of the same in other alternative resources. In the concept of Kain and Quigley (2013) of Supply and demand is a very critical issue at the microeconomic level as it gives an estimation of the need for production in a market. A business is successful when it meets the market demands in quality and price. Pricing once again is the equilibrium that is determinant of supply and demand of a market.
For the study, real estate economy of Australia is chosen. The real estate trends in microeconomics focus on the business and structural changes affecting both the industry and the consumers. The demand for the real estate determines the pricing and quality of housing on offer on pricing. This has a rippling effect on both producers and consumer’s economy and demand. According to HSBC, the trends of increase are 4.5% for last 5 years, projected in their survey of 2013.
Evaluation of business and Consumer responses:
Real Estate Business
In the viewpoint of Bourn and Hitchcock (2009), the increased speculation of Australian real estate of being over values has been existing for last one decade. The phenomenon is termed as Real Estate Bubble in treasury terms. Harris (2011) argued that the demand for the real estates in Australia is exceptionally high while the supply side is shrinking fast. The 2011 ABC News survey of the pan Australian Real Estate industry suggests that the skilled migration intakes would jump up to 30% from previous years along with the rate of natural increase of population has made the forecasted demand rise up to 200,000 homes while on supply side the estimated forecast suggests 150,000 homes in this period. Maisel et al. (2014) argued that the gap in dwelling’s supply-demand has led to the real estate bubbling effects. Nevertheless, Cope (2012) suggests that the driving factor for pricing would be the difference or imbalance in new housing supply, which would see upward property values in the Australian market.
PRBE001 – Economics For Managers Assignment (TITLE: “MICROECONOMIC ISSUES AND THEIR IMPACTS AND RESPONSES)
Demand for housing is heavily depended upon the demographic variables like population size and growth that creates the expansion of buyers in a particular economy. However, Metcalf (2013) suggests that this is an oversimplification of housing demand measurement.
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