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Sample Question And Solution Of Economics Assignment

ECON6000 Economic Principles And Decision Making 1

Question:

1. Interpret and successfully apply economic concepts of supply and demand for effective organisational problem solving.
2. Apply quantitative methods to forecast complex business variables including demand, supply, production and costs.
3. Critically analyse production processes and cost functions and classify the main forms of market structures as well as recommend appropriate pricing and strategies.
4. Critically evaluate the role and impact of various forms of government intervention in the economy including the implications of competition and deregulation policy for managerial practices.

Answer:

Problem A

1) Using the given data, PPF has been drawn with the use of Excel and illustrated below.

2) PPF represents the various output possibilities with regards to the given two goods i.e. Schmeckt Gut Energy Bar and Schmeckt  Gut 2.0 with regards to using the available resources at maximum efficiency of 100%. Using the given resources available, the production cannot exceed to any point besides the boundary of the PPF curve which has been indicated. As a result, a production of more than 30000 units of Schmeckt Gut Energy Bar is not possible without a change in the factors of production (Dombusch, Fischer & Startz, 2016).

3) In the given case, there has been an increase in the demand of the products owing to which it has exceeded beyond the PPF boundaries (Koutsoyiannis, 2015). This is apparent from the fact that the total demand is 4000 Schmeckt Gut 2.0 along with 20000 units of Schmeckt Gut Energy Bar. However, under the given PPF, it is apparent that with a production level of 4000 Schmeckt Gut 2.0, maximum production level of 10000 units of Schmeckt Gut Energy Bar. Clearly, there would be a shortfall in this case. As a result, suitable measures need to be taken for meeting the increased demand and these measures are stated below - Read More

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