HI5003 Final Assessment T2

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Final Assessment T2 Assignment help

The PPC highlights the possible production commodities that could be produced within the given resources in an economy or nation. Within, PPC opportunity cost is the opportunity forgone to produce extra units of good as compared to the other good based on resource scarcity.

  1. i) 20 tons of wheat will be the opportunity cost of producing 10 more units of cloth.
  2. ii) 30 units of cloth will be the opportunity cost of producing 45 more tons of wheat.
  3. i) Price elasticity of demand = [(Q2-Q1)/{(Q2+Q1)/2}]/ [(P2-P1)/{(P2+P1)/2}]

Thus, 1/0.22= -4.5 which implies that the price elasticity of demand is Elastic.

  1. ii) The consumption of rice could be affected by various micro and macro factors in the nation. The key micro factor that directly affects the consumption of rice is its price after the Typhoon as an enhancement in price directly prompts the quantity demand to fall. As per the graph, consumption is also affected by natural disasters which at the micro-level decrease the income of people and changes their buying or consumption behaviour. However, in such circumstances, government take various steps such as changing fiscal and monetary policy which affects the consumption of rice by the people. Rest inflation rate, adequate supply, estimated about future earnings and various other related economic factors affect the consumption of rice in the

TC of Cake business- $50,000+$10,000+$50,000+$20000+$40,000+$10,000+$4000= 184,000 AUD

TC of Mango juice business- $48,000+$40,000+$15,000+$8,000= 111,000 AUD

ATC of Cake business-$184,000 (TC)/35,000 (Units)= 5.25 AUD

ATC of Mango juice business-$111,000 (TC)/80,000 (Units)= 1.38 AUD

VC of cake business- $20,000+$40,000+$4000= 64,000 AUD

VC of juice business- $40,000+$15,000+$8,000= 63,000 AUD

AVC of cake business= $64,000(VC)/35,000 (units)= 1.82 AUD

AVC of Mango Juice business= $63,000 (VC)/80,000 (Units)= 0.78 AUD

Accounting profit of cake business= [(35,000*5)-$184,000]= 9,000(Loss)

Accounting profit of Mango Juice business= [(80,000*2)-$111,000]= $49000

Economic profit of cake business= $9,000(Loss)- $1,500 (Oppotunity Loss)= 10,500 (Loss)

Economic profit of cake section= $49,000-$1500 (Oppotunity Loss)= $47,500

It is clearly visible that Metro is in a monopoly situation over here and one of the reasons why the Victorian Department of Transport rejected the application by Singh as there exist high entry barriers in a monopoly firm. In addition, a passenger train line will require alignment with the running time of the metro which will come with an economic cost for both the investors and the government. In addition, the public transport industry is mainly managed by the government and it is a price maker in this case. In addition, the service offered by metro is distinct and an entry of private players will make the industry perfectly competitive in which profit will attract the new entrants but in the long-run, there will be normal profit.

Price discrimination refers to the selling approach in which different levels of prices are charged from the customer for a similar service or product offered on the basis of what the seller imagines they could get the buyers to pay for such services. In the train transport industry, the price discrimination is the approach in which the buyers are segregated into various different segments and separate processes are charged from such segments based on what they are desiring to pay and this type of price discrimination within the train transport industry is termed as second-degree price discrimination.

The CPI is the flawed computation of the cost of living as the CII is generally measured with the help of considering the CPI and excluding the volatile economic variables. In addition, CPI also carries substitution bias as the change in the overall cost of purchasing a specific basket of services and goods over time is conceptually not similar to the overall change in the cost of living of people. One of the major issues is utilising the specific basket of products as the base for measuring inflation as the way for dealing with the upcoming advanced version of old commodities or altogether new commodities. These are the reason why CPI is not a perfect measure of inflation as it carries various weaknesses.

(i) Labour Force= 26.6-12.2= 14.4 million peoplee

(ii) percentage of people unemployed from overall labour force= (14.4 million-13.6 million)/14.4 million*100= (0.8/14.4)*100 =5.55%

The GPD gap is also referred to as the recessionary gap which is the complete difference between the services and goods quantity manufactured at the full employment capacity and during the time of a recession when the overall employment is lower. For example, in case of a recession in Australia due to macroeconomic fluctuations caused by the pandemic the GDP gap is the way to compute the total lost potential for the Australian economy going through a recession. Generally, potential GDP is the full production ability of the nation and just as GDP could fall or increase, the GDP gap could go in two key directions which are negative or positive and neither is ideal for an economy. The GDP gap highlights that the overall nation is operating at an inefficient rate and the actual GDP would not be similar to potential GDP.

(4 marks)

GDP by Expenditure apprpch= C + G + I + NX

GDP= Domestic consumption by households ($10,571.20)+ Government expenditure ($53,440.95)+ Private domestic investment ($352.69)+ Ecports ($5,550.95) – Imports ($79.80)= $69,835.99 billion

Interest rate is the rate charged by the customer on the loan taken by them from a bank and changing the interest rate is a monetary intervention by the central bank for managing the economic situation in an economy. A reduction in the interest rate in the Philippine economy will spur the GDP growth of the nation as the theory highlights that a lower interest rate would enhance businesses, consumers and the government to borrow as well as spend more freely which would outcome in greater demand by the buyers and greater corporations investments, prompting to greater GDP development and creation of job. A decreased interest rate enhance the spending of the public thereby assisting the economy to overcome recession.


MPS= .85

MPC= 1-0.85=.15

Spending multiplier= 1/1-0.85= 6.66 times


The overall multiplier effect of the USD 5.8 billion grant will assist the Philippine economy to recover from recision as an influx of such as sum in the economy will be distributed to various people thereby enhancing the growth of the country. The total multiplier effect will be 5.8 billion USD*6.66 times= 38.628 billion.

By |2023-01-24T09:41:31+00:00January 24th, 2023|Categories: Assignment Samples|Tags: |0 Comments

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