Economics Assignment: Principles, Policies, and Healthcare Systems

This economics assignment comprehensively addresses key economic principles. It begins by identifying direct and inverse relationships, and then differentiates between microeconomics and macroeconomics. The assignment delves into positive and normative economics, followed by an analysis of production possibility curves, opportunity cost, and supply and demand dynamics. It includes graphical representations and explanations of market equilibrium, shifts in demand, and supply. The assignment also explores healthcare systems, comparing public and private sectors, and concludes with an examination of policies aimed at curbing illegal drug use, analyzing their effects on demand, supply, and price.

Running Head: ECONOMICS ASSIGNMENT. 1
ECONOMICS ASSIGNMENT
Name:
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Date:

ECONOMICS ASSIGNMENT. 2
Economics Assignment.
I. Indicate whether the relationships are direct or inverse (Kariuki, 2015).
a. Inverse relationship this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
b. Direct relationship, this is because an increase in consumption of one good
results to the increase in consumption of the other good.
c. Direct relationship, this is because an increase in consumption of one good
results to the increase in consumption of the other good.
d. Inverse relationship, this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
e. Inverse relationship, this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
II. Indicate whether the situation falls on Macroeconomics or Microeconomics
(Rima, 2015).
a. Macroeconomics because it affects the entire economy.
b. Microeconomics because it only affects individuals.
c. Microeconomics because it only affects individuals.
d. Microeconomics because it only affects individuals.
e. Macroeconomics because it affects the entire economy.
III. Indicate whether they are Positive or Normative economics statements (Hazari,
2016).
a. Positive economics statement this is because it is based on evidences that can
be proved and verified.
b. Normative economics statement this is because it is an opinion that cannot be
proved and verified.

ECONOMICS ASSIGNMENT. 3
c. Positive economics statement this is because it is based on evidences that can
be proved and verified.
d. Normative economics statement this is because it is an opinion that cannot be
proved and verified.
IV. PPC of Skateboards and Bicycles represented below.
a. The opportunity cost of bicycles in terms of skateboards when economy
moves from b to c.
= 38 – 32
= 6
From c to d
= 32 – 20
= 12
The answer indicates the law of increasing opportunity cost because the
opportunity cost moves from 6 to 12.
b. The economy cannot produce 38 skateboards and 2 bicycles because the
resources are only limited to producing 38 skateboards and 1 bicycle.
Producing 2 bicycles and 38 skateboards will mean that they have to increase
the resources which are limited.

ECONOMICS ASSIGNMENT. 4
c. Producing 32 skateboards and one bicycle is underproduction in the economy
because the economy can still produce 6 skateboards or another bicycle.
d. The production possibility curve would move outwards or to the right and
more bicycles would be assembled.
e. The production possibility curve would move outwards or to the right and
more bicycles and skateboards would be assembled.
V. The government has a budget of $200 million and can repair road 200kms or buy
4 helicopters. Opportunity cost concept (Parkin, 2016).
a. G which is a combination of buying 3 helicopters and repair 150kms is not
affordable to this government with its limited budget of $200 million.
b. The opportunity cost of one kilometre of highway repair is
200 Kms = $ 200 million
1 km = 1milion
4 helicopters = $ 200 million
Therefore, 1helicopter = 50 million.
The best foregone alternative of 1 kilometre is 1/50
= 0.02 cost of helicopter
c. The opportunity cost of helicopter is 50 kms stretch highway repair.
VI. Identify whether each increases or decreases demand and explain the changes in
graphical terms.
a. The demand for Cable TV subscribers will increase due to the lowering of
subscription rate and the demand curve will move outwards or to the right.
b. The quantity of Canned Milk demanded decreases due to a fall in consumer
income. The quantity demanded falls and the demand curve will move inwards
or to the left.

ECONOMICS ASSIGNMENT. 5
c. The demand for perfume will decrease due to the price increase hence the
quantity demanded falls and the curve will move inwards or toward the left.
d. Demand for Computer games decreases due to rise in free online games. The
demand curve will move inwards or towards the left side.
VII. Identify whether each increases or decreases supply and explain the changes in
graphical terms.
a. This refers to change in quantity supplied, as a results of the price increase the
supply also increases. There is a movement along the supply curve towards the
right side.
b. The number of salmon will decrease due to the effect of oil spillage in their
habitat hence the supply will also go down. This will lead to a change in
supply hence the supply curve will move inwards or towards the left.
c. When the prices of Cranberries drop or goes down the farmers are reluctant to
supply their produce. This shows a change in quantity supplied, as the price
decreases the supply also decreases. There is a movement along the supply
curve towards the left.
d. This shows a change in supply, as the need for more sophisticated boring
equipment increases the supply of iron as the raw material for manufacture
increases. There is a movement along the supply curve towards the right.
VIII. Fill the table below and use it to answer question below.
a. Table 1
Price
($)
Quantity
demanded
per week
Quantity
supplied per
week
Surplus (+) or
Shortage (-)
Effect on price
(up or down)
25 8000 14000 +6000 down
20 9000 12000 +3000 down
15 10000 10000 0 -
10 11000 8000 -3000 up
5 12000 6000 -6000 up

ECONOMICS ASSIGNMENT. 6
b. The supply and demand curve.
\
Figure 1 : Demand and Supply Curves.
c. The equilibrium quantity demanded is 10000 and the equilibrium quantity
price is $ 15. No any other price can be selected because at this price the
quantity demanded is equal the quantity supplied again price below
equilibrium price results to quantity supply shortage and prices above
equilibrium results to quantity supplied surplus.
d. This represent an increase in demand for instance at price $ 25 initially the
quantity demanded was 8000 now it has been increased to 11000, when the
demand increases the demand curve shift to the right or moves outwards.

ECONOMICS ASSIGNMENT. 7
e.
Price
($)
Quantity
demanded
per week
Quantity
supplied per
week
Surplus (+) or
Shortage (-)
Effect on price
(up or down)
25 11000 14000 +3000 down
20 12000 12000 0 -
15 13000 10000 -3000 up
10 14000 8000 -6000 up
5 15000 6000 -9000 up
Figure 2: Demand 1 and Supply Curve.
IX. Health care systems
a. Advantages of Health care provided by Public sector.
- Doctors and nurses are driven by love and passion for the job
and patients care hence they do not need financial incentives to
do their job.
- Every person in the population has an access to the public
health care services unlike private which requires a person to
acquire private insurance to access the health care services.

ECONOMICS ASSIGNMENT. 8
- Medical check-up in private healthcare sectors is very
expensive and a great section of the population would tend to
assume because of the cost incurred but when it cost less it
encourages many to go for medical check-ups hence help
maintaining fit.
Advantages of Private health care sector.
- The population is given choice and can go to any hospital for
medication unlike public the population has no choice.
- The access to some other service in public hospitals may be
limited by the government budget, this is because government
allocate a certain money to cater for certain number of person
in medication unlike private sector the patients can choose the
service depending on their capability.
- Public sectors may become bureaucratic and the private sectors
may come along to reduce the bureaucracies.
b. The Canadian health care system should be available privately this is because
it would reduce the number of patients waiting to see specialists, reduce
number of patients occupying hospital beds. The Canadian Medicare system
does not cover the dentistry, physiotherapy and psychologist services.
X. Attempt to curb the use of illegal drugs.
a. Explain each policy effects.
i. Decreasing demand through public education. The government reduce
demand by creating public awareness on the harmful effects of the use
of legal substances like tobacco by publishing warning alerts on their
packets, this creates a negative attitude to some users who eventually

ECONOMICS ASSIGNMENT. 9
reduce the number of intake and as a results decides to completely stay
away from the use.
ii. Decreasing supply through legal restrictions or taxes. The government
may decide to reduce consumption and supply of legal harmful drugs
like tobacco by imposing higher taxes to the product. The government
can also impose other legal restriction that the suppliers of the product
should meet before being allowed to carry on with the business. This
restrictions and higher taxes will reduce the number of suppliers hence
reducing the consumption of the product in that particular country.
iii. Decreasing the demand through public education has got no effect on
the price of the product while the decreasing the supply through legal
restriction or taxes has got an adverse effect on the price of the product
therefore, the price will go up or increase.
b. Decreasing the supply through legal restriction or taxes is a policy that would
be able to curb the use of illegal drugs because the it would ensure there is
limited supply of the product and again it would lead to increase in price of the
product which would also limit the use to a big number of population.

ECONOMICS ASSIGNMENT. 10
References
Hazari, B. (2016). The Pure Theory of International Trade and Distortions (Routledge
Revivals). Routledge.
Kariuki, C. (2015). The determinants of foreign direct investment in the African Union.
Journal of Economics, Business and Management, 3(3), 346-351.
Parkin, M. (2016). Opportunity cost: A reply. The Journal of Economic Education, 47(1), 35-
39.
Rima, I. H. (2015). Labor Markets in a Global Economy: A Macroeconomic Perspective: A
Macroeconomic Perspective. Routledge.