Assignment Coversheet

The Faculty of Business

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PLAGIARISM
The Faculty and the University regards as a very serious matter the action of a student who acts dishonestly or improperly,
including plagiarism or cheating, in connection with his or her academic work. Under University Regulation 6.1.1
“Plagiarism” is defined as “…the presentation of the works of another person / other persons as though they are one's own
by failing to properly acknowledge that person / those persons”. Plagiarism may take many forms including:
 direct copying of sentences, paragraphs or other extracts from someone else’s published work (including on the Internet
and in software) without acknowledging the source;
 paraphrasing someone else’s words without acknowledging the source;
 using facts, information, ideas, concepts or diagrams derived from a source without acknowledging them;
 producing assignments which should be the student’s own independent work, in unauthorised collaboration with
and/or using the work of other people (e.g. a student or tutor, or working in pairs or groups and producing similar
assignments on individual assessment tasks
 not referencing accurately (e.g. not citing correctly the work you have actually read)
OTHER UNACCEPTABLE BEHAVIOUR
 stealing and later using other students' work (e.g. taking discs, picking up other's marked assignments)
 recycling your own work / assignments or “double dipping” (e.g. re-submitting whole or significant parts of
assignments across units, across years or across courses)
 Assisting plagiarism - which may involve a student lending work (or by posting it on the Internet for sale) which is
intended for submission for assessment, or which has already been submitted, so that it can be copied in part or whole
and handed in by another student as that student’s own work.
Students are warned against making assignments etc. available to others, as they then could be regarded as a
contributor to plagiarism and may be penalised as if they themselves had committed an act of plagiarism.

Students are expected to be proficient with referencing and must always acknowledge any sources for work that is not their own.
Inadequate referencing of cited materials is considered to be plagiarism. Details of referencing can be found on the following
University web address: http://federation.edu.au/students/assistance-support-and-services/academic-support/learning-
and-study/resources or http://federation.edu.au/students/assistance-support-and-services/academic-
support/learning-and-study/preventing-plagiarism
Student’s Statement
I have read and understood the information provided on this assignment cover sheet relating to plagiarism and other
unacceptable behavior and therefore declare that the attached work is entirely my own, except where work quoted is duly
acknowledged in the text, and that this work has not been submitted for assessment in any other course or program.

Signature Date

C
Question 1

(a) Demand for automobile will decrease due to increase in oil price sharply, people will take care that they drive less
car and they reduce the amount of cars from buying more cars. It is very simple that the demand will go down of
cars.

(b) Demand for home insulation will increase definitely and demand curve shift to the right due to increment in oil
prices. It will hike up the price of energy, people wants to cut back on energy costs. And they will installed more
home insulation.

(c) Demand for coal will increase because oil price increase and coal is a alternative fuel for company and they will
use it like an substitute. And the demand for coal would increase. Because companies needs other fuel substitute
in behalf of oil. Demand curve shift to the Right.
(d) Demand for Tyres will decrease because tyres are used in cars and when people like to drive less cars then it also
impact on the demand for tyres. Demand curve shift to the left.

Demand curve of Tyres shift to the right due to increase in oil prices

(e) Demand for bicycle will increase because people will like to use bicycle as an substitute of cars. Oil price rises
helps to increase the demand of bicycle. People will like to ride on a bicycle because cars are not in uses in more
volume. Demand curve shift to the Right.
Question 1: (b)

Resource allocation-: It refers to that when we division the goods within a economy for production is called resource
allocation.

External costs: Negative externality referred as external costs

External Benefits: Positive externality referred as external benefits

Positive externalities referred as external benefits and a negative externality referred as external costs. And on division
the goods within a economy external costs and external benefits impact the overall production of goods. Due to this the
Resource that available in economy have an impact positive and negative .

(C) Public goods which is pure are not provided by the private sectors because there is no possibility to supply them for
making profits. It totally provided by the government to decide that how much public goods are relevant for society. And
the marginal benefits an individual receives to consuming a good because it will increase. In conclusion we can say that in
free markets goods generate the positive externalities. Because it definitely estimate the social benefits from making
public goods.

Question 2:

(a) Scarcity forces individuals and society to incur opportunity costs is that in my opinion there are scarcity
everywhere and individuals and society can only these scarce resources to produce a fixed amount of good.
Opportunity costs refers to that costs value which is not calculated in cash. Scarcity are everywhere and it impacts
individuals and society as well.
(c) The production possibility frontier bowed outwards because when production unit produces one unit of a product
then the opportunity cost of other product increases and Concave/outward bowed represents that increase in unit of
other product with increase the opportunity cost. A PPF is a line which is straight, and it is due to increase in opportunity
costs.

Ouestion 3:

(a) Motorists pay a fee when they bring their vehicles into the busiest part of the city because one thing is very clear in
this case that in some countries the major problem faced by a country is traffic. In some countries the amount of
vehicle are very high due to this the car owner face problems like parking, pollution, and due to this lots of policy
made by the countries to solve out these problems. Demand of motorists are very high and to reduce the amount
of vehicle Motorists pay a fee when they bring their vehicles into the busiest part of the city.
 (b) The authorities would determine the level of the charge if they have a particular target for reduction in the number
of vehicle entering the congestion charge zone then they should increase the charge after that the target for
reduction in the number of vehicle would be control. Authorities determine that level of charge would be increase
that it automatically help to reduction in number of vehicles.

(c) Revenue from these congestion charge are invested in the city’s transport system then the level of country
transport will increase drastically, and people will like to travel in city transport. This will affect the numbers of
vehicles and Demand of city transport will increase. To invest congestion charge in city transport would be a great
idea.

Traffic are the main reason to charge congestion and yhis policy certainly comes with some positive impact on the
traffic.

Question 5:

(a) In real world there is no industry which conforms precisely to the economist’s model of perfect competition
because Perfect competition is a hypothetical situation which does not exist in markets. Because in real world
nothing is perfect. No Industry exhibits perfect competition in any country. Perfect competition useful for
comparing forms of market structure like monopoly, Duopoly, Monopolistic, Oligopoly.
 (b) 1. Short-run perfectively competitive equilibrium for individuals firm is that to earn maximum profit in short run
period of time in which firm vary its output by changing the variable factor of production. When firms earn
maximum profit then firm is in equilibrium and then the difference between its total cost and total revenue.
There are two condition where it will satisfy: (1) MC=MR , (2) MC curve cuts the MR curve

2. Short-run perfectively competitive equilibrium for the industry is that when the total output remains steady
then a industry is in equilibrium in the short run. When the all firm earns normal profits then equilibrium is full of
the industry in the short run. The condition is something like that SMC=MR=AR=SAC.

Illustration in figure 4 that the industry equilibrium at in point E where the supply and demand curve E and D
intersects which clearly determined OP price where total costs cleared OQ. But Price OP Prevailing , where some
firms earnings normal profit PS, ST. Shown in (B).

(c) Long-run perfectly competitive equilibrium for the firm that the industry equilibrium in long-run reached a price
which equilibrium for firms for making normal profit to producing at minimum point of their LAC curve. There is
no entry and exist of firm in the industry. Equilibrium for long run shown in figure 5.15. Firms are in equilibrium
because at levels of X output.
Question 6:

(a) List of some fixed inputs and variable inputs that would use in operating the shop are:
 For sitting we need comfortable chairs and also coffee tables
 For better decoration we need lightning, flower, paintings etc,
 Television and music facilities are also very necessary
 For drinking coffee cups and mugs are needed
 Special something once in a week are also very relevant
 Nice internally interior, family environment
 Some special offer are also needed
(b) Condition under variable costs where labour treated in this case variable costs are something like that which goes
up and down depending on production level. In some cases when wages paid to the labor than it will depends on
circumstances because when wages paid according to the hours fixed wages for weekly hours and for month. In
this labour wages should be treated as fixed. But when wages paid according to the work forces then wages
should be treated as variable.