04 Jun Question 1. Assignment Questions Question 1– 10 marks
Question
1. Assignment Questions
Question 1– 10 marks
Part A
Text box: ethanol
(barrels per day) food crops
(tonnes per day)
70 0
64 1
54 2
40 3
22 4
0 5
Australia produces ethanol from sugar cane, and the land used to grow sugar cane is used to grow food crops. Suppose that Australia’s production possibilities for ethanol and food crops are as in the table.
(a) If Australia increases its production of ethanol from 40 barrels per day to 54 barrels per day, what is the opportunity cost of an additional barrel of ethanol? (1 mark)
(b) Does Australia face an increasing opportunity cost of ethanol? What feature of Australia’s PPF illustrates increasing opportunity cost? (1 mark)
Part B
The table sets out the demand and supply schedules for banana.
Text box: price
(dollars per box) quantity
demanded quantity
supplied
(boxes a week)
6 500 4000
5 1000 3500
4 1500 3000
3 2000 2500
2 2500 2000
1 3000 800
(c) Draw a graph of the market forbanana. What are the equilibrium price and quantity? Explain why. (1 mark)
(d) If the price of banana was $1.50 a box. What would be the situation in the banana market (shortage or surplus)? Explain why and how the price and quantity would adjust. (1 mark)
(e) Suppose a cyclone destroyed some banana farms in QLD and the quantity of banana supplied decreased by 500 boxes a week at each price. Explain what would happen to the market supply and demand and how would the equilibrium price and quantity adjust? Illustrate the changes on your graph. (3 marks)
(f) Suppose a cyclone decreased banana supply by 500 boxes a week at each price. But at the same time the demand for banana increased by 500 boxes a week at each price. Explain what would happen to the market equilibrium price and quantity? Illustrate the changes on your graph. (3 marks)
Question 2– 10 marks
Part A
Text box: price
(dollars
per night per room) quantity demanded
(no. of rooms
per night)
200 10
250 9
300 8
350
400 6
4
A tour agency’s demand schedule for hotel rooms is given in the table.
(a) What happens to total expenditure of the tour agency if the price falls from $400 to $350 per night per room? Is the demand for hotel room elastic, inelastic, or unit elastic? (1 mark)
(b) What happens to total expenditure of the tour agency if the price falls from $300 to $250 per night? Is the demand for hotel room elastic, inelastic, or unit elastic? (1 mark)
(c) Calculate the demand elasticity of the hotel room, whenthe price falls from $400 to $350 per night per room and when the price falls from $300 to $250, respectively. (1 marks)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.