Unit Number and Title: 600/1068/X; Economics for Business Module Tutor: Moslahur Reza/Murshed Thakur
Submission Date September 21, 2012
IN THIS ASSIGNMENT I HAVE WORKED ON MICROENOMICS AND MACROENOCMICS THE LEARNER WITH AN UNDERSTANDING OF WHAT IS MEANT BY MICROECONOMICS AND MACROECONOMICS, THE BASIC ECONOMIC PROBLEM OF SCARCITY, OPPORTUNITY COST. IT ALSO EXPLORES WHAT IS MEANT BY FREE MARKET, COMMAND AND MIXED ECONOMIES AND HOW DIFFERENT ECONOMIC SYSTEMS DECIDE WHAT TO PRODUCE, HOW TO PRODUCE IT AND WHO TO PRODUCE IT FOR. IT ALSO LOOKS AT HOW EQUILIBRIUM PRICE AND QUANTITY ARE ESTABLISHED AND AFFECTED BY CHANGES IN SUPPLY AND DEMAND. IDENTIFY THE BURDEN/BENEFIT OF TAXATION/SUBSIDIES ON CONSUMERS AND PRODUCERS, THE MEANING OF POSITIVE AND NEGATIVE EXTERNALITIES. THE FACTORS WHICH AFFECT THE NUMERICAL VALUES OF PRICE ELASTICITY. THE IMPLICATIONS OF PRICE ELASTICITY OF DEMAND, PRICE ELASTICITY OF SUPPLY, INCOME ELASTICITY OF DEMAND AND CROSS PRICE ELASTICITY OF DEMAND, FOR THE BEHAVIOUR OF FIRMS.
You are required to answer any 4 Learning outcomes from the choice of 6 learning outcome below
Learning outcome 1
The nature of economic resources and that their finite supply creates the need for business organisations to make choices.
Explain the difference between microeconomics and macroeconomics
Explain the problems of scarcity and opportunity cost and how these concepts are related, using numerical examples and/or a production possibility frontier
Student should find the problems of scarcity and opportunity cost and using numerical examples and/or a production possibility frontier.
According to Allan ,G (2011)
Opportunity cost is defined as ‘the next best alternative forgone’. The manufacturer should consider the best way of producing the product for the best possible prices allocation. As resources are scarce, choices must be made as to what to produce and consume. When making a choice, the producer or consumer has to do without – or forgo – some good or service or course of action. This is the opportunity cost.
Compare, using real world examples, the relative merits of alternative economic arrangements for overcoming the problem of scarcity in society
Learning outcome 2
Understand the concept of market equilibrium and be able to use supply and demand analysis to examine how price is established within a market.
Explain, in words and with diagrams, the concept of equilibrium in a supply and demand model and illustrate the effects on equilibrium price and quantity of changes in market conditions
Examine, using appropriate supply and demand diagrams, the effects of taxes and subsidies and the effects of price ceilings and price floors on market price and quantity traded
Identify examples of positive and negative externalities and, using supply and demand analysis, demonstrate the effects of these externalities on the market equilibrium
Learning outcome 3
Understand the concepts of elasticity of demand and supply and their application within the business decision making process.
Define, measure and interpret: price elasticity of demand; price elasticity of supply; income elasticity of demand and cross price elasticity of demand
Explain, using diagrams and different concepts of demand...