HI5003 - Economics for Business - Accounting & Economic Profit, Demand And Supply, With Elasticity, James Case Study  - Economics Assignment Help

Assignment 

Unit Learning Outcomes Assessed: 
1.Acquire a broad understanding of the principles of macro and microeconomics in an economy.  
2.Analyse the economic environment nationally and internationally and its influence on business and national economic performance. 
3.Critically analyse governments fiscal and monetary policy and how they influence the economy and business in general. 
4.Comprehend how economies benefit from the business. 
5.Synthesise theoretical and practical knowledge of economics, a  well-developed understanding of the language of economics and the tools of economics used by policymakers within or outside the country.  

Assessment Question  
Demand and Supply, and Elasticity  
Question 1 
Due to inflation in Australia in December 2019, the price of petrol increased from AUD  1.35 to AUD 1.45. This caused petrol consumption to decrease from 2500 litres to  2450 litres at a 7-Eleven Petrol Station in Sydney.  
Also, when the price for Hyundai 7.5kW Inverter Split System Air Conditioner (Reverse  Cycle) increased from AUD 950.00 to AUD 990.00; demand for these air conditioners fell from 2500 units to 2000 units.  
Following this condition, answer the questions below. 
i. Using the mid-point formula calculate the price elasticity of demand for petrol and Hyundai 7.5kW Inverter Split System Air Conditioner (Reverse Cycle). 
ii. Is the price elasticity of demand: elastic, unit elastic or inelastic for each commodity (petrol and Hyundai 7.5kW Inverter Split System Air Conditioner (Reverse Cycle)? 
iii. Suppose the government decides to increase tax for petrol and Hyundai 7.5kW  Inverter Split System Air Conditioner (Reverse Cycle). Use two diagrams to explain the incidence of the tax increase for each commodity. 

Question 2
James was a high school teacher earning a net salary of $4500 per month. After working for one year, he quit his job to start his own kiosk business dealing in various consumer goods. In order to learn how to run the business, James enrolled in a  TAFE to acquire accounting skills. James’ course was for 6 months. James had to pay $3,000 as tuition for the 3 months. 
After the training, James borrowed $40,000.00 from his uncle whom he pays 8 per cent interest per year.  
Also, James withdrew $ 50,000 from his savings account. He had been earning 5 per cent interest per year for this account. Further, to start the business James used his own premises given to him by his father. 
His father had been receiving $11,000 from rent per year. Finally, to start the business James uses $75,000 he had been given by his father to go on holiday to the USA. 

James’s first year of business can be summarised as follows:

Q-Based on your calculations of accounting profit and economic profit, would you advise James to return to his teaching job or keep his kiosk job? Show your work! 

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