Country’s Wealth Increases - Revenue Maximized - Economics Assignment Help

Assignment Task :

Question 1

1.1 Illustrate the country’s production possibilities line and clearly indicate the coordinate points for both products. 
 

1.2 Calculate the following:
1.2. The production possibilities line equation in terms of Y.

1.2. What is the opportunity cost of one more unit of Product Y at two (2) units of Product X and eight (8) units of Y? 
1.3 Using the concept of the production possibilities curve, explain whether it is possible to produce five (5) units of Product X and ten (10) units of Product Y. 
1.4 Is it possible that a country could produce at the end points; i.e., X units  and zero units of Y or Y units and zero units of X? Is such a combination allocative efficient? 
1.5 What is the maximum attainable value of Product X and Y, respectively, based on your answer in question 1.1? 
 

Question 2
2.1 Economics research is more difficult than conventional sciences. Discuss  four (4) reasons in support of the given statement.
2.2 You are given the following demand function: Q = -1/2P + 60. At what price is total revenue maximized? 
2.3 Read the following information to answer the questions that follow:
The market for bananas is given by the following equations:
P = 100 – 2.5Qd
P = Qs
 

2.3.1 What is the price elasticity of the supply of bananas?
2.3.2 Evaluate the market for bananas at a price of 20 and discuss whether there will be an equilibrium or not.

Read the scenario below and answer the questions that follow:
A small company that sells films and videos wants to increase its sales revenue. One option is to offer a discount of 10% to each film/video sold. The company knows that its products can be divided into sub-divisions based on the production and ownership of the content in the film/video. The table below shows the responses of each ‘content’ to the discount.

Question 1 
1.1 Using the mid-point formula, calculate the price elasticity of demand for each content. 
1.2 Based on the revenue test to price elasticity of demand, which ‘content(s)’ should be accorded the discount? Explain. 
1.3 The Government wishes to increase its revenues and plans to impose a tax on the film/video retail industry, but has no intention of driving retailers out of business. Which of the two (2) contents should be taxed or not taxed? Substantiate your answer. 
1.4 What do you think would happen to the price elasticity of demand for local content in the following cases?
(i) Foreign content is banned in the country. 
(ii) Due to aggressive advertising, foreign live styles are thought to be attractive and a desire to associate with foreign ‘things’ increases. 
(iii) A country’s wealth increases and the consumption of entertainment, including films/videos, becomes insignificant to a consumer’s budget.

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