Supply and Demand Model - Critical Evaluation of the effectiveness of the Policy - Economics Assignment Help

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Economics Assignment Help

TASK: Question 1 The Australian beef price has been rising in the last few years. Use a supply and demand model to illustrate the price change. In your answer, you need to identify the likely factors that have shifted the supply, or demand or both. Question 2  How can Qantas make the demand for its services more inelastic so that it can charge a higher price without worrying about losing sales? Question 3  Use the following information to answer questions (1). What is the marginal cost of hiring the 4th worker? (2). If the firm hires 5 workers, what is the total fixed cost? (3). If hiring the 7th worker increases total product by 5 units and the price of each unit is $2, would the firm hire the 7th worker? Why? (4). If hiring the 6th worker increases total product by 7 units and the price of each unit is $2, would the firm hire the 6th worker? Why? (5). If the firm hires 5 workers and produces 10 units, what is the average cost? Question 4  A firm sells 1,000 units per week. It charges $100 per unit, the average variable costs are $50, and the average total costs are $90. (1). Should the firm shut down in the short run? Why? (2). Should the firm shut down in the long run? Why? (3). At what price would the firm consider shutting down in the short run? (4). At what price would the firm consider shutting down in the long run? Essay question  Question 5   Many governments around the world have implemented heavy taxes on soft drinks and other sugary products in order to reduce the level of obesity among people. You are required to write an essay to critically evaluate the effectiveness of this policy. Make sure that you clearly address the following questions in your analysis. (a) Using the supply and demand model explain how a sugar tax could reduce the sales of soft drinks. (b) Explain whether the demand for soft drinks is elastic or inelastic. (c) Compare the tax to an alternative policy (you can consider price-floor, awareness creation programs and education campaigns, etc.) (d) Critically evaluate the effectiveness of the sugar tax as a policy in reducing obesity levels.

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