The Concept of Opportunity Cost - The Concept of a Change in Demand - Economics Assignment Help

Assignment Task:

QUESTION 1
a. Is causation the same as correlation? Explain using an example of each.

b. Explain the concept of opportunity cost and reflect on an occasion in recent weeks where the concept of opportunity cost applied to you. 2 Marks

QUESTION 2
Ms Smith was very happy because her favourite Granny Smith apples have decreased in price due to a very good harvest. She usually buys 1 kilo of apples per week. This time, due to a fall in price, she is going to go to her favourite fruit store to buy three kilos of Granny Smith apples.

On her way home, she passed a shop where she saw the latest smartphone, which has become very popular in the market. Although there was nothing wrong with her present phone, she decided to buy this hugely popular phone.

a. State the sentence in the article that relates to the law of demand. Explain your answer with the support of graph(s).

b. State the sentence in the article that relates to the concept of a change in demand. Explain your answer with the support of graph(s).

c. Reflect on an occasion where your behaviour reflected each of the concept highlighted in question 2a and 2b.

QUESTION 3
The price of oil has decreased dramatically mainly due to a collapse of worldwide demand for oil and an insufficient reduction in the production of oil by the major oil producers. Use demand and supply analysis to graphically illustrate and explain the huge fall in the price of oil.

QUESTION 4
Assume apples and pears are substitutes. At the same time as the price of apples increased by 50 percent, the Australian government also imposed an additional tax on pear growers. Use demand and supply analysis, graphically represent and explain the impact of these scenarios on the market price and quantity in the market for pears. (HINT: there is more than one possibility to the changes in price and quantity). 4 Marks

QUESTION 5
a. In many countries, governments set the fares that taxi owners/drivers can charge. At various times, taxi owners/drivers stage protests asking for an increase in taxi fares because they believe it will increase their revenue. Graphically represent and explain what taxi owners/drivers are assuming about the price elasticity of demand for taxi rides?

b. If you own a business, using numerical example(s) or graph(s) explain how you will apply your understanding of price elasticity of demand in your pricing policy.

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