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Assignment on Mathematics: Doc

   

Added on  2020-03-13

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Assignment 1Due:9pmTuesday,15 August, 2017(Week 6)Weighting:25%Note that when you are answering questions that require mathematical calculations, you should provide details as to how the answers were derived.In completing your answers, you should use graphs wherever possible. Always provide a brief explanation of each graph, including how it relates to your overall answer/argument.Question 1 a.Explain why a production possibility curve is usually bowed outward rather than being a straight line. A PPC (Rittenburg & Tregarthen) is bowed out due to increasing opportunity costsof producing a good. Consider X and Y. This means that to produce more of X we must reduce Y as ourresources are fixed. We have to move from point A to B. Toproduce 1 more X, we have to pull out resources ( like labor ) fromY and put them into factories for X. We reduce Y as shown by redline as we move from A to B to get 1 more unit of X. As we movefrom B to C we still get 1 more X unit but we need to give up moreY now, as shown by green line.Thus we give up more and more of Y to get 1 unit more of X. Thisis why we cal this increasing opportunity costs of butter. This happens because inputs like labour are not equally efficientat producing X and Y. Each input will be efficient at producing anyone good, which gives comparative advantage to production ofthat good. (2 marks)a.Jane has been unemployed for nearly a year but finds a high-paying job with an international 1

hotel firm. Does this mean that Jane will no longer experience the problem of ‘scarcity’? Explain the reasons for your answer. Scarcity is a macro issue, from the economy level. It means that jobs available are lesser than the no of persons who are looking for work. For each person who has a job there is no scarcity as long as he has a job. For someone who is unemployed there is scarcity of jobs.As long as Jane has a job she does not face scarcity. If unemployed there is scarcity of jobs for her., (3 marks)b.Every country has an economic system that has been established to address the problem of scarcity. Describe the economic system of a country other than Australia. Justify your assessmentof the system by considering the major factors that determinean economic system within a country (300 words maximum).Consider India as a country. When it became free of British colonial rule in 1947 it adopted mixed economy model of an economic system. It allowed some sectors to have private producersbut reserved many sectors for State production only- defence, heavy machines, etc. This was done as resources were scarce and the needs of a poor nation were manifold. It was thought that State allocation of resources is best to overcome the scarcity problem. India first policy - Industrial Policy of 1948 was framed under the mixed economy concept, allowing a role for private and public sector. It was followed by Industrial Policy 1956. IT clearly came out in favour of wide spread State involvement in industrial activities. 17 industries were made the exclusive domain of State. No private sector was allowed in these industries- arms and ammunition, atomic energy, iron and steel, heavy castings and forgings of iron and steel, heavy machinery, heavy electrical industries, coal, mineral oil, mining; iron ore and other important minerals like, copper, lead and zinc; railway transport, aircraft, ship building, telephone, telegraph and wireless equipment, and generation and distribution of electricity. (Jadhav, n.d.)This policy was later reversed in 1991, when India embarked on reforms. The cause of this change was the difference in economic strenght of India in 1947 and 1991. In 1947 India was poor and under developed- with scarce resources- financial and non financial. It needed to build on its limited resources to grow. By 1991 India was better placed and had built up certain basic industries and started deregulating many industries. The process of privatisation was made possible due to availability of more resources that were better and more efficient than those in 1947. (Home.fau.edu, n.d.)This is clear case of resource availability dictating the economic system adopted by a nation.(5 marks)2

Question 2 a.The table below shows the demand and supply for ice creams.Price of an ice cream($)Quantity demanded(‘000)Quantity supplied(‘000)0.001900.501601.001311.501042.00772.504103.00113i.Graph the following demand and supply schedules.(2 marks)3

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