Weighting: 30%
Length: Approximately 1500-2000 words (excluding graphs, tables and reference list) It is a progressive assignment based on the topics of weeks
4-6 covering Chapters 7, 8, 9 and 11.
Objectives: This assessment item relates to course learning outcomes 2 and 3 as listed in the Unit Profile.
ECON11026 Principles Of Economics Assignment-CQ University Australia.
Q1. Market Structures: Chapter 7 Perfect Competition
Refer to solved problem 7.1 in this chapter for understanding the calculations. Assume that Angela sells hot dogs in a perfectly competitive hot dog market. Her output per day and costs are outlined in the following Table-1.
(a) Complete Table-1 columns for Average Total Cost (ATC), Average Variable Cost (AVC), MC and MR. List and explain the assumptions of perfect competition for hot dog market.
(b) If the current equilibrium price in the hot dog market is $1.80, how many hot dogs will Angela produce, what price will she charge and how much profit (or loss) will she make?
(c) Draw and explain the graph to illustrate your answer. Your graph should be clearly labelled and should include Angela’s ATC, AVC, MC and MR demand curves, the price she is charging, the quantity she is producing and the area representing her profit (or loss).
Q2. Market Structures: Chapter 8 Monopoly
(a) This question is related to solved problem 8.1 in the textbook. Don has acquired a monopoly in the production of cricket balls and faces the demand and cost situation shown in the following Table-2.
(i) Complete TR, MC and MC columns in Table-2.Complete TR, MC and MC columns in Table-2.
(ii) List and explain briefly the assumptions under which Don’s monopoly for cricket ball firm operates.
(iii) If Don wants to maximise profits what price should he charge and how many cricket balls should he sell? How much profit will he make?
(iv) Suppose the government imposes a tax of $50,000 per week on cricket ball production. Now what price should Don charge, how many cricket balls should he sell and what will his profits be?
Q3.Market Structures: Chapter 9 Monopolistic Competition
(a) Explain the similarities and differences between the long-run equilibrium for a:
(i) perfectly competitive firm, and a (ii) monopolistically competitive firm with examples. Illustrate your answer with a graph demonstrating the long-run equilibrium for the two types of firms.
(b) Assume that two interior design companies Baine and Alistair are competing for customers, and if they both advertise, they would each earn $30 million in profits. If neither advertises, they each earn $50 million in profits. If one advertises and the other doesn’t, the firm that advertises earns $40 million in profit while the other earns $20 million in profit.
ECON11026 Principles Of Economics Assignment-CQ University Australia.
(i) Present the information above in the form of a payoff matrix. Let Baine be the row player and Alistair the column player.
(ii) Does each firm have a dominant strategy and if so, what is it?
(iii) Define and explain the Nash Equilibrium in this example.
Q4. Market Failure and Externalities: Chapter 11
Figure-1 shows example of a market for COVID-19 vaccinations, a product whose production as well as consumption generates positive externalities on the global population, society and individuals. Study Figure – 1 to answer the following questions.
(a) Given the current global pandemic and its impact, define and explain positive production and positive consumption externalities in context of COVID-19 vaccination.
(b) What does the curve D1 represent in Figure-1?
(c) What is the economically efficient output level in Figure-1?
(d) What does the curve D2 represent in Figure-1?
(e) What is the market equilibrium output level in Figure-1? Explain.
(f) Define dead weight loss. Which area represents the deadweight loss resulting from producing at the market equilibrium?
(g) Why is there a dead weight loss?
Helpful Hints for Written Assessment 2
Use the DADA framework when structuring your answers to all questions in
economics. (Definitions: define the key terms; Assumptions: list or make
assumptions as required; Diagrams: draw relevant graphs/tables and explain; and original Analysis: apply the theory to real life economic examples and explain).
i)You must read the chapters each week and work on the assignment
questions progressively each week—which will prevent you from asking for
extensions and also submit all assessment task on time to pass the course.
So please follow a weekly study schedule.
ECON11026 Principles Of Economics Assignment-CQ University Australia.
(ii) Academic Integrity or Cheating / Plagiarism is a real concern. Therefore,
please do not give your assignment to any student or copy from other
students. Please reference intext and end-of-text reference list.
(iii) Turnitin: Please read and understand Turnitin % information. Submit
draft assignment 3-4 days before the due date to check the Turnitin score. If
the percentage % is showing in orange or red, then please revise the
selected sections and resubmit to Turn It In. It is acceptable to have a Turn It In % between 1 and less than 25.
(iv) Concepts and key terms must be defined accurately and completely.
(v) The assumptions upon which the analysis is based must be stated at the
outset.
(vi) Diagrams must be drawn properly, correctly labelled and the relations they depict explained on the diagram and in the accompanying text of your
answer.
(vii) Answers must be complete, addressing the specific tasks nominated in the questions.
(viii) All reference sources must be acknowledged in-text and a list of
references provided using the APA Referencing Style.
(ix) Please seek help from the Academic Learning Centre on paraphrasing and referencing.
(x) Where a question has more than one part, so too should the answer. Ensure complete coverage in the analysis section of your answer.
(xi) As a minimum, students should reference at least two credible sources.
ECON11026: Assignment – 2 Marking Sheet
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