HI5003 - Principles of Macro and Microeconomics - Economics Assignment Help

Assignment Task

Unit Learning Outcomes Assessed:

1. Acquire a broad understanding of the principles of macro and microeconomics in an economy.
 

2. Analyse 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 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 policy makers within or outside the country.

Question 
 

Due to inflation in Australia in December 2019, the price for 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.

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