You will complete the answers at the each of each module; You may submit the answers for both the modules together as a single word document.
Module 1: (Each question is worth 5 marks; answer both the questions)
1) For an individual who earns $250 per week, cheaper food options could be noodles. However, suppose the same individual gets a better employment and his income increases, will the demand for noodles still be the same; explain the relevant concepts with appropriate diagram(s).
2) What is Production Possibility frontier (PPF) ?; what are the concepts that are covered by PPF?; use the table below to represent PPF diagrammatically and explain your diagram. Module 2: (each question is worth 5 marks; answer both the questions)
1) Given the Total Revenue (TR) for a certain firm is A$150,000, calculate Accounting profit and economic profit by stating the formula for both the calculations. Is the firm is financially sound? Substantiate your answer
2) The Roads and Maritime Services (RMS) here in New South Wales insists that vehicles which are over 7 years old should be taken for an inspection before renewal of registration for the next year. This is mainly to ensure the vehicle is road worthy. Analyze the type of externality behind this example using relevant diagrams to support your argumen
Module 1: (Each question is worth 5 marks; answer both the questions)
1) For an individual who earns $250 per week, cheaper food options could be noodles. However, suppose the same individual gets a better employment and his income increases, will the demand for noodles still be the same; explain the relevant concepts with appropriate diagram(s).
2) What is Production Possibility frontier (PPF) ?; what are the concepts that are covered by PPF?; use the table below to represent PPF diagrammatically and explain your diagram. Module 2: (each question is worth 5 marks; answer both the questions)
1) Given the Total Revenue (TR) for a certain firm is A$150,000, calculate Accounting profit and economic profit by stating the formula for both the calculations. Is the firm is financially sound? Substantiate your answer
2) The Roads and Maritime Services (RMS) here in New South Wales insists that vehicles which are over 7 years old should be taken for an inspection before renewal of registration for the next year. This is mainly to ensure the vehicle is road worthy. Analyze the type of externality behind this example using relevant diagrams to support your argumen