1. With reference to the UK economy for the period of 1st January 2011 to 30th September 2012, discuss whether the ‘double dip’ recession, in your view, is over or not. Ensure that you critically discuss both sides of the debate and limit your answers from the perspective of economics. 2. a) What are the principal categories of unemployment. (10%) b) In the UK unemployment rate rose above its long-term average to exceed 6% in the period after October 2008. Giving reasons, discuss whether you think unemployment rates of this magnitude are important or not. (30%) c) Critically review what you feel about this long-term unemployment has done to the economy and how has it impacted on the society. (30%) d) In your view, do you think reducing unemployment should be a priority of the UK government and what types of policies or incentives can the UK government introduce to reduce unemployment?(30%) 3. a) Why is the sub-prime mortgage-led financial crisis being viewed (50%) as the worst financial crisis since the Great Depression? b) How has it impacted on the global economy so far?(50%) 4. a) In an economics context, explain the definitions of inflation, (10%) deflation and stagflation. b) In what circumstances will they occur, and if they occur, (45%) what will the likely effects be on the economic environment? c) What policies should a government implement to maintain (45%) economic stability in response to these respective economic conditions?

micro economics

Order Description

Assignment Questions (Semester 2, 2015)
Business Microeconomics – Worth 20% of total assessment:
Answer all five (5) of the following questions. Each question is worth 10 marks.
Question 1:
(a) Sketch the following curves and provide an explanation for their shape
(i) the marginal cost curve (1mark)
(ii) the average cost curve (1mark)
(iii) the average fixed cost curve (1 mark)
(iv) the average variable cost curve (1 mark)
(b) Why does the marginal cost curve intersect the average cost curve at its minimum point?
(3 marks)
(c) Why does the minimum point of the AVC curve occur at a lower level of output than the
minimum point the AC curve? (3 marks).
Question 2
Medicines are often cited as examples of goods which are very price inelastic.
(a) Explain why this might be the case. (4 marks)
(b) Draw a demand curve illustrating price inelastic demand and explain how the
curve relates to the definition of price elasticity of demand. (4 marks)
(c) Use the diagram to explain how inelastic demand has implications for
pharmaceutical company price setting and revenue. (2 marks)
Question 3
(a) Discuss the following statement: ‘In the real world there is no industry which conforms
precisely to the economist’s model of perfect competition. This means that the model is
of little practical value’. (2 marks)
(b) Illustrate with a diagram and explain the short-run and long run perfectively competitive
equilibrium. (3 marks)
(c) Illustrate with a diagram and explain the short run and long-run monopolistic competitive
equilibrium. ( 3 marks)
(d) Why are firms in the perfectly competitive market structure regarded as more efficient?
( 2 marks)
Question 4
“A monopolist will charge the highest price the market will bear” Discuss if this statement is
true or false with the aid of diagrams. (7 marks for explanation, 3 marks for diagram).
Question 5
Petrol prices recently plummeted; discuss some of the reasons behind
this development.
(10 marks)