ASSIGNMENT ON PRINCIPLES OF ECONOMICS.

Running head: PRINCIPLES OF ECONOMICS
Principles Of Economics
Name of the Student
Name of University
Course ID

PRINCIPLES OF ECONOMICS1
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................3
Question a....................................................................................................................................3
Question b....................................................................................................................................4
References........................................................................................................................................5

PRINCIPLES OF ECONOMICS2
Question 1
The coronavirus pandemic has badly hurt the market for lobsters in Australia. The Wester
Rock lobster constitutes one important portion of Australia’s commercial fishery. In the last few
years, China has become the main market of exported lobsters from Australia (fish.wa.gov.au
2015). However, because of the outbreak of coronavirus China’s market trading live animals has
been closed down. Because of decline in China’s demand there is an increase in supply of
lobsters in the domestic market of Australia. The excess supply if lobsters are forcing sellers to
sell lobsters at a lower price. The condition of lobsters’ market in Australia is explained with
help of the following figure.
Figure 1: Lobster market in Australia
In figure 1, supply and demand of lobsters in Australia are given by the respective linear
demand and supply curve of SS and DD. Equilibrium in the market corresponds to the point E.
price and quantity of lobster at equilibrium are given by P* and Q* respectively. Now, because
of closure of China’s market, there is a sudden increase in supply of lobsters for the domestic