Economic Concepts in Terms of the Basic Economic Model - Economics Assignment Help

Assignment Task:

Task:

QUESTION ONE [25]
1.1 Examine the following economic concepts in terms of the basic economic model of the production possibility frontier. Use examples to motivate your answer.
1.1.1 Efficiency (5)
1.1.2 Scarcity (5)
1.1.3 Opportunity cost (5)
1.2 Demonstrate the economic impact of an investment of resources for an economy in the production of both the goods that it produces. Use the production possibility frontier as the basis for your answer. (10)

QUESTION TWO [20]
2.1 Question 2.1.1 to 2.1.3 are based on the schedule below relating to the demand and supply of mini chocolate bars:

Column A
PRICE (IN RANDS AND CENTS)

Column B
QUANTITY

Column C
PRICE (IN RANDS
AND CENTS)

Column D
QUANTITY

R0.50 16 R0.50 0
R1.00 13 R1.00 1
R1.50 10 R1.50 4
R2.00 7 R2.00 7
R2.50 4 R2.50 10
R3.00 1 R3.00 13

2.1.1 State and motivate which columns represent:
2.1.1.1 The demand aspect (5)
2.1.1.2 The supply aspect (5)
2.1.2 List the equilibrium price and equilibrium quantity for mini chocolate bars according to the schedule. Include in your answer the meaning of the equilibrium price and equilibrium quantity. (5)
2.1.3 Assume that at the price of R1.00, the quantity of mini chocolate bars increases from 13 bars to 14 bars. Discuss one relevant factor that can cause this change. (5)

QUESTION THREE [20]
3.1 Assess the category of goods according to income elasticity of demand that exhibits the following elasticity coefficients for the goods specified:
3.1.1 Good X: Positive income elasticity; Ey = 1.6 (5)
3.1.2 Good Y: Positive income elasticity; Ey = 0.3 (5)
3.2 Discuss two (2) categories of price elasticity of demand. (10)

QUESTION FOUR [20]
4.1 Define the following cost curves according to the theory of the firm. Provide examples wherever applicable:
4.1.1 Total fixed cost curve (4)
4.1.2 Total variable cost curve (4)
4.1.3 Long-run average cost curve (4)
4.2 Describe the demand curve of a perfectly competitive firm. (4)
4.3 Explain the nature of the goods produced by a monopolistically competitive firm. (4)

QUESTION FIVE [15]
5.1 Analyse the reason relating to the money supply circulating in an economy as a factor contributing to the downward sloping aggregate demand curve. (5)
5.2 Distinguish between the two main tools in the application of fiscal policy. (6)
5.3 Discuss one (1) problem associated with using gross domestic product as a measure of economic growth.

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