Reference no: EM133882568

Question 1

After the devastating typhoon Haiyan in the Philippines, the government and donor agencies embarked on rehabilitating rice production to avoid hunger and starvation. As a result, the Philippines experienced a rice bumper harvest which led to the equilibrium price to decrease to AUD 1.50 per kilogram. To protect the rice farmers, the government decided to increase the price of rice to AUD 2.00 per kilogram. Suppose the figure below represents rice production by Jane, a farmer in rural Philippines, answer the questions below.

Based on the figure above, draw a graph to examine the effect government price legislation on Jane.

Calculate the price elasticity of demand using the midpoint formula for rice.

What is the price elasticity of demand for rice? Based on your answer, is rice a necessity? Explain your answer.

Draw a graph and explain the effect of a hot sunny day with high temperatures averaging 400C on the demand for cold beverages. Assume due to high demand for beverages, wages for workers in the soft drinks industry increase. To answer, use your knowledge of demand and supply as taught at Holmes Institute.

Question 2
As the bushfires devastated most of the farmland, major cities such as Melbourne, Sydney and Brisbane started to experience shortage in household products such as milk and bread. As business in household foodstuffs became lucrative, Mary decided to quit her job as a secondary school teacher earning AUD 6,000 per month to start her own milk and bread kiosk business. To start the business Mary decided first, to utilize her rental property from which she was earning AUD 3000 per month. Second, Mary decided to use AUD 60,000 she had saved in Commonwealth Bank from which she was earning 2.5% interest per month. Mary's expenditure during the first month of March includes expenses on fixed assets and variable materials such as wages. The table below summarizes Mary's expenditure and sales for the first month of her business in March 2020 as follows:

Use the table to answer the questions below.

Calculate Mary's total cost and average total cost for each section (Milk and bread section). Exclude implicit costs.

Calculate Mary's variable cost and average variable cost for each section. Exclude implicit costs.

Assume Mary sells milk at AUD 1.50 per litre. Also, assume Mary sells each bread pack at AUD 3.00. Calculate Mary's accounting profit and economic profit for the month of March 2020.

Question 3
Adidas is one of the high-class sports shoe dealers in Melbourne with the following short run cost curves. Answer the questions that follow.

Use the characteristics of firms to explain the market structure for Adidas Sports Shoe Company.

Calculate this profit or loss for Adidas shoe company

Question 4
The Figure below represents labor force and employment in Australia before the bushfire devastation. Assume is the equilibrium for wages, demand and supply for labor before the bushfires. Also, assume that in order to attract people to seek employment after the bushfires, the government of Australia increased wages to AUD25 per hour. Answer the questions that follow.

What was the employed population in Australia before the bushfires? Get affordable and professional assignment help now!

Did the increase of the wage cause a shortage or surplus of labour? Show your calculations in order to provide your answer.

Examine the effects of the government minimum wage legislation of AUD 25.00 in Australia.

The figure below indicates that the aggregate demand curve. Explain the factors that account for the shape of the aggregate demand curve. To answer, use examples based on the figure.

Question 5

Suppose the following information was published by the Australian Bureau of Statistics in 2022. Calculate Australia GDP in 2022.

Sky News March 25, 2025 reported that the "government has made about $40 billion in pre-election commitments, including $16 billion to wipe student debt, $8.5 billion for Medicare and $1.8 billion in energy rebates". Government further indicates that Job Keeper allowances will be increased once elected into government and all workers be entitled to a tax refund base of $1,000. In addition, government intends to increase wages for workers in Australia. Assume interest rate remains high. Further, assume you are the Economic Adviser to the Prime Minister of Australia. Would you advise the Prime Minister to implement the pre-election pronouncements? Use the Aggregate Demand and Aggregate Supply Model to explain your answer.