Crystal Sugar is a Perfectly Competitive Firm Operating - Accounting and Finance Assignment Help

Assignment Task :

Task:

The assignment consists of four questions. You should allocate at least half a page (or 250 words) to each answer. You may refer to academic literature and textbooks to help answer the questions.
You must write your answers in a Microsoft Word document and submit them online in vUWS on or before the due date.
You should provide a ‘reference list’ of the literature you have used. Plagiarism is forbidden and all assignments will be electronically checked for plagiarism before they are marked.

 Note: Wikipedia and anonymous amateur blogs should not be used as references. For definitions and basic concepts, your first ‘port of call’ should be a textbook.

1. Assume that Crystal Sugar is a perfectly competitive firm operating in a perfectly competitive market and initially at the long-run equilibrium point of operations.
Recent flood has damaged a vast harvest of sugar cane and increasing the wages of workers, leading to the firm shutting down in the short run and not producing in the long run. Explain your answer using the diagram. (5 marks)

2. The Highland city council has imposed a price ceiling of $5 on all movie tickets after giving in to pressure from the voters of the city complaining they have been paying high prices (at least $10 for each movie, which is the equilibrium price) for any movie theatre.
a. What is likely to happen on the market for movies in this city? (1 marks)
b. What happen to the quantity of tickets demanded and supplied? (2 marks)
c. Who gains? Who loses? (2 marks)

3. A carbon pricing scheme (CPS), commonly termed as a ‘carbon tax’ was introduced by the Gillard Government in 2011 and came into effect on 1 July 2012. Under the legislation, the biggest carbon-emitting companies in Australia would pay a price for each tonne of carbon. Then Opposition Leader Tony Abbott termed the intended tax as a “toxic tax from a government with the Midas touch in reverse”. Gillard’s CPS was in operation until it was replaced on 17 July 2014 by the Abbott government.

a) Using appropriate diagram/s, discuss whether the carbon pricing scheme has been an adequate measure to correct the market failure and reduce CO2 emission. Also, illustrate the socially optimal level of output and price of the carbon content of fuels in the diagram. (3 marks)

b) Prime Minister Gillard also proposed that Australian households would be handed more than $15 billion in compensation to help offset the impact of the carbon tax. Explain how this compensation would stimulate the output, employment, and price level. (2 marks)

4. Private investment records the strongest growth of 3.9% in the Sep-Dec quarter 2020 since 2017 supported by government initiatives and improvements in pandemic condition. Briefly discuss the trend of investment (gross fixed formation) and explain how investment growth contributes significantly to the gross domestic product (GDP) of a country (Australia) using the Keynesian Cross model. (5 marks)

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