ECON1020 : Principal of Economics - Difference Between a Biologically Feasible - Economics Assignment Help

Assignment Task :

QUESTION 1 

The following table shows labour market statistics for Albania and Argentina in 2019. All 

Population 2846 44490 Population of working age 2368 22349 Labour force 1435 13432 Out of labour force (inactive) 933 8917 Employed 1275 12237 Unemployed 160 1195 

a. Calculate the participation rate, employment rate and unemployment rate for Albania and  Argentina in 2019. Show your workings.  

b. Discuss which country (Albania or Argentina) has the stronger (i.e. best performing) labour market. Justify your answer. [max words: 150] 

c. The onset of COVID-19 has seen aggregate demand in Argentina decrease dramatically.  As a result, unemployment in the country has increased. Draw a model of the labour  market. Assume that before the onset of COVID-19 the labour market in Argentina was in  equilibrium. On your model show what effect the increase in unemployment in the country  would have on the real wage in the short term before any adjustments take place. Label both axes, curves, and important points on your model. 

d. If an economy has low aggregate demand with high unemployment, then an automatic  adjustment back to equilibrium could occur through a process of wage and price cuts in the  labour market. Imagine that you are a worker in Argentina who has recently lost their job  because of COVID-19 and you see many other workers in your country have also lost their  jobs. How might this affect any adjustment back to equilibrium in the labour market? [max  words: 250]  

QUESTION 2 

The figure below shows the average years of schooling, girls relative to boys between 1970 and 2010 for several countries.

b. What does this figure tell us about within-country and between-country inequality over  time? Explain one reason for the change in shares of global income over time.  

c. Intergenerational inequality and inequality in earnings between members of a population  are positively correlated. Discuss two reasons that may explain this positive correlation.  [max words: 250] 

d. “More unequal countries do better than equal countries, in terms of standard economic  performance measures like GDP per capita growth.” Do you agree or disagree with this  statement? Discuss two reasons why you came to this conclusion. [max words: 250]

QUESTION 3 

You are now asked to consider a world with two people, Jane and Jack. Jack is a farmer. Jane  owns the land on which Jack farms and does not produce any output herself. There is only  one good in this world, grain.  

a. Use a model of decision making under scarcity to show the allocation that maximises  Jane’s economic rent when she can coerce Jack. Label all relevant axes, points and curves on  your model.  

b. Use a separate model of decision making under scarcity to show the set of Pareto efficient  allocations result from Jack being able to bargain with Jill, but with Jill still being able to  make a take-it-or-leave-it offer. Label all relevant axes, points and curves on your model.  

c. Thinking in general terms now, explain why a point on the biological survival constraint  is lower when a person has more hours of free time. Why does the curve also get flatter when a person works less? [max words: 150] 

d. Again, thinking in general terms, explain the difference between a biologically feasible set  and an economically feasible set.  

QUESTION 4 

a. Draw two models, a monopoly market (price-setters) and a perfectly competitive market  (price-takers). On each of your models show the equilibrium point and show any areas of  consumer surplus, producer surplus and deadweight loss. Label all relevant axes, points and  curves on your model.  

b. Discuss how important investment in research and development would be in each type of  market structure (monopoly and perfectly competitive). [max words: 150] (2 marks) 

c. In 2017 the US city of Philadelphia introduced a 1.5-cents-per-ounce tax on sweetened  drinks such as soda and energy drinks. Discuss the likely effectiveness of this tax.  

d. Discuss what, if any, implications the tax on sweetened drinks will have on inequality within the city of Philadelphia. 

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