Globalisation And Environmental Harm

Running head: ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

ECONOMICS1
Table of Contents
Question 1..................................................................................................................................2
Question a...............................................................................................................................2
Question b..............................................................................................................................2
Question 2..................................................................................................................................4
Question a...............................................................................................................................4
Question b..............................................................................................................................5
Question 3..................................................................................................................................5
Question a...............................................................................................................................5
Question b..............................................................................................................................7
Question 4..................................................................................................................................7
References................................................................................................................................10

ECONOMICS2
Question 1
Question a
Usain Bolt is the world’s fastest human. He could mow his law very quickly or at
least as well as James Bold, who mows lawns for living. Despite this fact Usain Bolt would
pay James Bold to mow his lawn rather than do it himself. The behavior of Usain Bolt can be
explained using the concepts of opportunity cost (Fine, 2016). Usain Bolt who is a
professional athlete prefer to spend time in building body or train himself. For mowing lawn,
he has to sacrifice his time that could have used to build body or training and help him to
improve his performance. For James Bold however there is no major opportunity cost for
mowing lawn he does so for living. As Usain Bolt faces a higher opportunity cost for mowing
lawn he would instead pay James to mow lawn rather than do it himself.
Question b
Hybrid cars use a small internal combustion engine as well an electric motor for
obtaining maximum power and fuel the economy with maximum emission. These are
generally more efficient compare to conventional petrol or diesel run vehicles. Hybrid cars
and petrol run cars are close substitute to each other. Hybrid cars are relatively more
expensive than petrol cars. Given all the thing, people therefore generally have petrol cars
and have a lower tendency to switch to hybrid cars. Now, an increase in price of petrol
increase cost of maintain petrol cars. This reduces the demand for petrol cars (Kreps, 2019).
As the demand for petrol car falls, people tend to shift to hybrid cars increasing the demand
for hybrid cars. An increase in demand for hybrid cars causes the demand curve for hybrid
cars to shift outward. As demand expands there is an increase in equilibrium price and
equilibrium number of vehicles available in the market for hybrid cars.

ECONOMICS3
Figure 1: Market of hybrid cars before increase in petrol prices
The above figure shows market for hybrid cars before increase in petrol prices. The
demand and supply curve Hybrid cars are given by DD and SS respectively. Equilibrium in
the market occurs at the point E. The equilibrium price of Hybrid car is given as P* and
equilibrium number of vehicles is given as V*.
Figure 2: Market of hybrid cars after increase in petrol prices