Environmental Issues in Australia

Economics

Contents
Answer 1....................................................................................................................... 2
Answer 2....................................................................................................................... 4
Answer 3....................................................................................................................... 6
Answer 4....................................................................................................................... 8
Reference.................................................................................................................... 10

Answer 1.
A. This is related to the leverage, in economic leverage means knowing and multiplying the
losses and gains in the business and this is mainly used to increase the wealth and profits as other
people resources and efforts are used. Power of leverage is used by Usain Bolt in this example as
he can mow his land but rather than doing it he opted to hire a person to mow his lawn because
Usain can use his time and efforts in more productive way and can earn more than he invested in
mowing the lawn. This factor is considered as leverage. Usain Bolt can easily mow but then also
he will insist and ask James Bold to work so that Usain bolt can utilize his time and consume the
time in mow his lawn for increasing the activities productivity. Usain bolt will hire James bold to
work for him so that he can utilize his time in more effective and productive way. It will help
Usain bolt to earn more with more productive activity. In case when Usain Bolt has to mow his
lawn but he also has an opportunity to train athletes for the Olympics competition which also
pays him $1,000 for one day and he has to spend only $100 for mow his lawn to another person
to mow. It will be preferable for Usain bolt to use his skills to train the athletes and would give
his 100% efforts to productive activity. It is said that it is beneficial to earn 1% off a 100
people’s efforts than giving own 100% efforts in less productive activity.
B. When the price of petrol increases it will help in increasing the sale of hybrid cars.
Supply and demand factors
In this case, demand shows the inverse relationship between the quantity demanded and
the prices of the products. The demand curve is shown as the downward-sloping curve. In

demand curve, it shifts when the other factors change expect change in price. Supply includes the
direct relationship between the quantity supply and price of the product. It is shown as the
upward-sloping curve. It shifts when the prices change (Coglianese, 2017).
In this case, the change in petrol prices shifts the supply and demand curve of the hybrid
cars. Equilibrium is achieved when the demand is equal to the supply of hybrid cars and in this
case, the other factors are considered as constant. The demand for hybrid cars increases when the
petrol price increase as hybrid cars is more efficient in consumption of fuel. The demand curve
of hybrid cars will shift to right with the increase in demand and in that situation the equilibrium
point will be at point A where the demand and supply will intersect. In this case, the prices and
Quantity of hybrid cars will increase with the rise in the prices of petrol and the supply will be
constant (Trostle, 2010).