Macroeconomic Principles and Global Markets

This assignment delves into fundamental macroeconomic principles such as supply and demand dynamics, equilibrium analysis, and the effects of import/export changes on domestic markets. It covers both theoretical concepts and practical applications using diagrams and real-world examples. Students will examine how shifts in supply and demand influence prices, consumer surplus, producer surplus, and deadweight loss. The assignment also explores the impact of declining imports from Canada on Australian markets, highlighting the interconnectedness of global economies.

MACROECONOMIC
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TABLE OF CONTENTS
PART II: Demand and Supply.........................................................................................................3
(A) Market equilibrium price and quantity..................................................................................3
(B) Explanation of changes in demand or supply along with price and quantity on the basis of
graph............................................................................................................................................3
(C) New market equilibrium price and quantity with the help of graph......................................4
Part ii: Global MARKETS IN ACTION.........................................................................................6
(B) Impact on price due to decline in import...............................................................................6
(C) Impact of decline in import from side of Canada on Australia.............................................6
REFERENCES................................................................................................................................7
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PART II: DEMAND AND SUPPLY
(A) Market equilibrium price and quantity
Price (cents per bag) Quantity demanded (million
bags per week)
Quantity supplied (million
bags per week)
50 160 130
60 150 140
70 140 150
80 130 160
90 120 170
100 100 180
In this case both the curves like as demanded quantity as well as supplied quantity are
intersect at one point in which the quantity is 160 bags per week.
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(B) Explanation of changes in demand or supply along with price and quantity on the basis of
graph
In this case quantity of demand which is demanded by the consumers are increases by 30
million at each pricing level and due to which price factors also affects (Bagdikian, 2014).
Furthermore, table along with the chart after demand increased shown as below:
Price (cents per bag) Quantity demanded (million
bags per week)
Quantity supplied (million
bags per week)
50 190 130
60 180 140
70 170 150
80 160 160
90 150 170
100 130 180
When the demand enhance by 30 million at each and every price level then demand and
supply curve shifted from the above mentioned graphs. As the demand increases then the price
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will be fix at 80 GBP. The reason is that when demand of the any product increases then pricing
also raises as per the law of supply as well as demand (Carey, Mitchell and Lowe, 2013).
(C) New market equilibrium price and quantity with the help of graph
Price (cents per bag) Quantity demanded (million
bags per week)
Quantity supplied (million
bags per week)
50 190 170
60 180 180
70 170 190
80 160 200
90 150 210
100 130 220
Apart from the increased quantity of demand in this current task scenario supply raises by
40 million at each and every pricing level. due to this condition price of the potato bag reduces as
compare to the previous task. On the basis of law of supply and demand when supply in the
market increase then level of price declines as demand constant (Collins and Butler, 2015).
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Furthermore, at the point of equilibrium in the current case price of the potato bag will be fix at
60 GBP and quantity will be 175 potato bags.
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PART II: GLOBAL MARKETS IN ACTION
(B) Impact on price due to decline in import
Figure 1Poducer and consumer surplus chart
In can be seen from the chart that when supply declined demand increased. Due to less supply
and high demand price of product get increase from P to P1 and quantity demanded reduced
from Q to Q1. Consumer surplus shift from P and V to P1 to B. Thus, consumers able and
willing to pay increase. Similarly, in case of producers they willing to charge minimum from
customers also increase from Z to X. Due to restrictions there will be less purchase of units of
product and demand for same will increase in domestic market. Hence, importers will sold
product at high price from the market (Haaland and Venables, 2016). Deadweight loss will
happened in Canada because according to demand there is no supply of goods in the market. Due
to this reason suppliers will be able to charge high price from the customers.
(C) Impact of decline in import from side of Canada on Australia
Due to decline in import of product from Canada export of Australia will decline and due
to this reason supply in the domestic market will increase. This will lead to decline in the price of
the product in the Australia. Consumer surplus will reduce as customers will willing to pay less
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