ECO10250: Production possibility curve is usually bowed - Economics Assignment

Internal Code: MAS4122

Economics Assignment:

1) Explain why a production possibility curve is usually bowed outward rather than being a straight line. 2) Jane has been unemployed for nearly a year but finds a high-paying job with an international hotel firm. Does this mean that Jane will no longer experience the problem of ‘scarcity’? Explain the reasons for your answer. 3) Every country has an economic system that has been established to address the problem of scarcity. Describe the economic system of a country other than Australia. Justify your assessment of the system by considering the major factors that determine an economic system within a country 4) Graph the following demand and supply schedules. ii. What is the equilibrium price and quantity in this market for ice creams? iii. Calculate the consumer surplus and producer surplus at the equilibrium in this market. iv. Assume that the demand schedule for ice creams outlined above is for summer. What do you think will happen to equilibrium price and quantity of ice creams during winter? Explain the reason for your answer. v. What do you think will happen to consumer and producer surplus as a consequence of the change in equilibrium price and quantity for ice creams during winter? Explain the reason for your answer. 5) The government has decided that the free-market price for milk is too low. i. In an attempt to help dairy farmers increase their income the government imposes a price floor in the milk market. Use demand and supply diagrams to illustrate the impact of this policy on the price of milk and the quantity sold as well as the state of the market. ii. Can dairy farmers be assured of an increased income? Explain your answer. iii. Would it be a good decision for the government to purchase all the surplus product? Explain your answer.