Essay Understanding of the Economic Concepts – Economics Assignment Help

Assignment Task

AIMS
The purpose of this task is to demonstrate your understanding of the economic concepts and models you have learned in the course in topics 2, 3, 8 and 9 by relating them to a real-world situation.

COURSE OBJECTIVES
These course objectives are covered by the assignment.
CO1. Describe and utilise the fundamental tools, methods and language of economics to analyse resource allocation issues
CO3. Describe the impact of incentives and use economic models to illustrate how agents and economies respond to incentives
CO4. Identify the limitations of the market mechanism and analyse the role of government in affecting markets and decision-making in the general economy
CO5. Apply economic principles and concepts to analyse business cycles and monetary and fiscal policy in an open macroeconomy, and to demonstrate the significance of trade and globalisation.

TASK DESCRIPTION
1. Read the article written by Jennifer Nichols “Ginger prices skyrocket to record highs amid worldwide shortage” published in ABC Rural dated 7 Failure to cite properly is evidence of academic misconduct, and will result in marks being deducted.

2. Answer the questions that follow the article using economic models where appropriate.
3. Answer each question separately and do not include an introduction and conclusion.
4. Wherever you use ideas from sources to support your arguments make sure you cite them according to UniSA Harvard conventions.

QUESTIONS
Q1. Using the demand and supply model, explain and illustrate graphically, why ginger prices have increased compared to last year. Hint: Make sure you discuss the equilibrating process, and clearly outline the assumptions in discussing the factors causing change in price and quantity.

Q2 (a). Assume ginger is sold in a perfectly competitive market and firms are making zero economic profit. Explain and illustrate graphically, the effect of increase in market price on the short run position of a single firm selling ginger. (Hint: Make sure your graph includes the firm’s demand curve, marginal revenue curve, marginal cost curve and average total cost curve and also explain the profit maximising position of a firm)

Q2 (b). Based on the short run position identified in Q2 (a) explain and illustrate graphically effect of entry/exit on the long run position of the firm.