Assessment item 2 back to topAssessment 2 - Short AnswerValue:20%Due Date:17-Aug-2018Return...

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Assessment item 2	back to topAssessment 2 - Short AnswerValue:20%Due Date:17-Aug-2018Return Date:07-Sep-2018Length:1600 wordsSubmission method options:EASTS (online)Task	back to topAnswer all four (4)questions. Maximum of 400 words for each question. Use diagrams were appropriate to enhance and explain your response.Question 1Total 5 marksa) A farmer is deciding whether or not to add fertiliser to his or her crops. If the farmer adds 1 kilogram of fertiliser per hectare, the value of the resulting crops rises from $80 to $100 per hectare. According to marginal analysis when the farmer should add fertilizer? (2marks)	b)Bill has $10 that he can spend on a Superman action figure, a Batman graphic novel or an X-Men T-shirt. Bill decides to buy the action figure, even though the graphic novel was a close second choice. What is the opportunity cost of buying the action figure? (2 marks)	c) Wheat farmers across Australia have to sell their produce at one fixed price for all wheat produced. Thus, price does not vary in relation to the individual farmer’s quantity of wheat sold. Draw this type of wheat demand curve and decide what value the slope has. (1 mark)		Question 2:	Total 3 marks - 1 mark for each parta) Explain if a firm in the perfectly competitive market would or would not innovate.b) What are the two main differences between monopoly and competition?c) What happen with firm’s price and revenue operating in competitive market if the firm doubles the amount of output it sells?	Question 3		Total 4 marks - 1 mark for each partThe following table shows the quantity of a product demanded at two different prices:																P					($)															Q					d																		16				14										25				35							a)  Calculate the proportionate change in quantity demanded when price falls from $16 to $14.b)  Calculate the proportionate change in price when price falls from $16 to $14.c)  What is the price elasticity of demand between $16 and $14? Interpret the results.d)  What is the price elasticity of demand between $16 and $14 if you applied the ‘mid point’ formula? Interpret the results.		Question 4:	Total 8 marks - 4 marks for each parta) The diagram below shows the demand for and supply of petrol. The market is initially in equilibrium at point	x. To which equilibrium point (a, b, c, d, e, f, g or h) will the market move from point x after each of the following changes?	i) A rise in the cost of refining petrol.ii) A fall in bus and train fares.iii) A fall in the price of crude oil and an increase in the price of cars.iv) A rise in tax on petrol and a reduction in tax on cars.	b) The government has decided that the free market price of cheese is too low. Suppose the government imposes a binding price floor in the cheese market.i). Use a supply and demand diagram to show the effect of this policy on the price of cheese and the quantity of cheese sold.ii) Is there a shortage or a surplus of cheese sold?  Explainiii) Farmers complain that the price floor has reduced their total revenue. Is this possible? Explain.iV) In response to these complaints, the government agrees to purchase all of the surplus cheese at the price floor. Compared to the previous arrangement who benefits from this policy? Who loses?	Rationale	back to topThis assessment task will assess the following learning outcome/s:			be able to apply economic concepts and principles to daily life.				be able to explain the economic decision making of producers and consumers and their interaction in the market place.				be able to construct graphs and diagrams to demonstrate how economic concepts and principles work in practice.	Marking criteria and standards	back to topYour mark will be thebased on your responsesaccording toapplying the following marking guide.											Learning outcome assessed										Criteria										HD				85%-100%										DI				75%-84%										CR				65%-74%										PS				50%-64%										FL																							Be able to apply economic concepts and principles to daily life										Work applies principles of economics correctly to realistic situations.			Applies correct economic principles, analysis is substantiated with workings, and calculations in order to arrive at the right answer. There are negligible errors/no errors in calculations.			Applies correct economic principles, description is substantiated with workings, and calculations in order to arrive at the right answer. There are negligible errors/no errors in calculations.			Applies correct economic principles, description is substantiated with workings, and calculations in order to arrive at the right answer. There are minor errors in calculations.			Applies correct economic principles, shows workings and calculations but contains some errors.			Applies limited or no understanding of relevant principles. Working and calculations are either not shown or contain major errors.																Be able to construct graphs and diagrams to demonstrate how economic concepts and principles work in practice										Use diagrams in your answers to provide a more comprehensive response.			Diagrams created by students are correctly and precisely labelled, relevant to the specific question, and used appropriately to demonstrate their high level understanding of all key economic concepts and principles.			Diagrams created by students are correctly and clearly labelled, relate to the specific questions and demonstrate a clear understanding of all key economic concepts and principles.			Diagrams created by students are correct with an attempt at labeling that maybe unclear/incorrect, and demonstrate an understanding of most of the key economicconcepts and principles required in this task.			Diagrams created by students are mostly correct with an attempt at labeling, are relevant to the specific question, and demonstrate some understanding of basic economic concepts and principles.			No diagrams provided or they are incorrect, poorly labelled or irrelevant to the specific question. The diagram fails to demonstrate the students understanding of economic concepts and principles.																Be able to explain the economic decision making of producers and consumers and their interaction in the market place										Work applies principles of economics correctly in discussing results, conclusions, and/or recommendations.			Principles are applied in the appropriate manner to arrive at the correct answer. Written work shows analysis in order to interpret and make highly complex recommendations relating to economic principles covered inthis subject.			Principles are applied in the appropriate manner to arrive at the correct answer. Written work attempts to analyse, and shows the ability to interpret and make recommendations to economic principles covered in this subject.			Principles are applied in the appropriate manner to arrive at the correct answer. Written work shows the ability to interpret and makesome key recommendations to economic principles covered in this subject.			Discussion reflects basic understanding of relevant principles. Some inclusion of relevant recommendations.			Principles are not applied appropriately, correct answer is not provided. Written work does not make suitable/relevant recommendations to economic principles covered in this subject.											Academic writing skills and referencing						Information, spelling, grammar and written expression is set out ina coherent manner, with professional presentation. Appropriate use of font, formatting, diagrams etc., where relevant. Referencing should follow the APA style, see the presentation requirements.							PassSustained, consistent and logical presentation of work.Accurate spelling and grammar, excellent written expression and syntax.Appropriate referencing of articles and web-sites.			Structure of work does not demonstrate a consistent and logical presentation format. Inaccurate spelling anduse of grammar, inconsistent written expression. Incomplete or inaccurate referencing.			Presentation	back to topThe following points are a general guide for presenting assessment items.	Responses to assessment items should be typed. Use 1.5 spacing.	Use a wide left margin. Markers need space to be able to include their comments. Use a standard 12pt font such as Times New Roman, Calibri or Arial.	Left- justify body text.	Include a separate title page with your name, student number, subject code, assessment number and assessment question. Include class time and tutor’s name if applicable. Number your pages (except the cover page).	Use a header or footer with your name and student number on each page.	Always keep a copy of your assessments. Both a hard copy and an electronic copy.	Most importantly, always use your spelling and grammar checker, but remember that this does not pick up all errors. You must still manually and carefully edit your work.	You need to appropriately reference all the articles, reports and web-sites you employ in developing your assignments. Please use the APA style, information can be found at the CSU Referencing website at:		http://student.csu.edu.au/study/referencing-at-csu	Requirements	back to topYou must include a reference list on your assessment using APA referncing style. Information and assistance with referencing can be found by clicking this link	http://student.csu.edu.au/library/integrity/referencing-at-csu

Abr Writing · Accepted Answer

Answer all four (4) questions. Maximum of 400 words for each question. Use diagrams were appropriate to enhance and explain your response. 
Question 1 Total 5 marks a) A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds 1 kilogram of fertilizer per hectare, the value of the resulting crops rises from $80 to $100 per hectare. According to marginal analysis when the farmer should add fertilizer? (2marks)
According the above analysis, when the farmer adds 1 kg of fertilizer per hectare, then there is a rise in resulting crops from $80 to $100. The $20 increase in crops per hectare is nothing but the marginal revenue for the firm. The marginal analysis explains that a farmer would add the fertilizer as long as the marginal revenue exceeds marginal cost. The farmer would keep on adding fertilizer and increase the yield as long as the marginal revenue from the fertilizer exceeds the marginal cost of using it. He or she would stop to add fertilizer when the marginal cost becomes higher than the value of resulting crops rises. As per the marginal analysis, the optimal point for the farmer will reach at the point where marginal revenue equals to marginal cost. 
 b) Bill has $10 that he can spend on a Superman action figure, a Batman graphic novel or an X-Men Tshirt. Bill decides to buy the action figure, even though the graphic novel was a close second choice. What is the opportunity cost of buying the action figure? (2 marks)
Opportunity cost is very important concept and plays a vital role in business decision.  This is the foregone cost or the cost of next best alternative. In the above scenario, Bill has purchased action figure though his second choice was graphic novel. Bill buys action figure and foregoes the purchase of action figure. This foregone cost is nothing but Bill’s opportunity cost. The Batman graphic novel is the opportunity cost for Bill. (McEachern, 2009)
 c) Wheat farmers across Australia have to sell their produce at one fixed price for all wheat produced. Thus, price does not vary in relation to the individual farmer’s quantity of wheat sold. Draw this type of wheat demand curve and decide what value the slope has. (1 mark)
The farmers in Australia sell their produce at a fixed price. They act as a price taker and their demand curve is horizontal. Since the price does not vary with the quantity of wheat sold the demand curve is perfectly elastic. The demand curve is shown below:
Price
E=∞
Quantity
Question 2: Total 3 marks - 1 mark for each part a) Explain if a firm in the perfectly competitive market would or would not innovate. 
Innovation is the key for long term prosperity. The concept of innovation in case of perfect competitive market structure is rather a complex concept. Innovation is very common and highly prevalent in monopolistic competition and oligopoly. Profit margin in perfectly competitive firms are very less due to free entry and exit of firms. Thus, it is hard for them to spend money on research and development or to develop new products hence the innovation is relatively low in perfect competition. Moreover there is free entry and exit and thus innovation or new product features can be copied easily by competitive firms. Thus incentive for innovation is less among competitive firms. 
b) What are the two main differences between monopoly and competition? 
There are a lot of differences between perfect competition and monopoly.  One of the major differences between the two-market structure is the barriers to entry. Monopoly firm is consistent with high barriers to entry. The entry barriers are copy right,

Assessment item 2 back to top Assessment 2 - Short Answer Value: 20% Due Date: 17-Aug-2018 Return Date: 07-Sep-2018 Length: 1600 words Submission method options: EASTS (online) Task back to top Answer...

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Learning outcome assessed	Criteria	HD 85%-100%	DI 75%-84%	CR 65%-74%	PS 50%-64%	FL
*Be able to apply economic concepts and principles to daily life*	Work applies principles of economics correctly to realistic situations.	Applies correct economic principles, analysis is substantiated with workings, and calculations in order to arrive at the right answer. There are negligible errors/no errors in calculations.	Applies correct economic principles, description is substantiated with workings, and calculations in order to arrive at the right answer. There are negligible errors/no errors in calculations.	Applies correct economic principles, description is substantiated with workings, and calculations in order to arrive at the right answer. There are minor errors in calculations.	Applies correct economic principles, shows workings and calculations but contains some errors.	Applies limited or no understanding of relevant principles. Working and calculations are either not shown or contain major errors.
*Be able to construct graphs and diagrams to demonstrate how economic concepts and principles work in practice*	Use diagrams in your answers to provide a more comprehensive response.	Diagrams created by students are correctly and precisely labelled, relevant to the specific question, and used appropriately to demonstrate their high level understanding of all key economic concepts and principles.	Diagrams created by students are correctly and clearly labelled, relate to the specific questions and demonstrate a clear understanding of all key economic concepts and principles.	Diagrams created by students are correct with an attempt at labeling that maybe unclear/incorrect, and demonstrate an understanding of most of the key economicconcepts and principles required in this task.	Diagrams created by students are mostly correct with an attempt at labeling, are relevant to the specific question, and demonstrate some understanding of basic economic concepts and principles.	No diagrams provided or they are incorrect, poorly labelled or irrelevant to the specific question. The diagram fails to demonstrate the students understanding of economic concepts and principles.
*Be able to explain the economic decision making of producers and consumers and their interaction in the market place*	Work applies principles of economics correctly in discussing results, conclusions, and/or recommendations.	Principles are applied in the appropriate manner to arrive at the correct answer. Written work shows analysis in order to interpret and make highly complex recommendations relating to economic principles covered inthis subject.	Principles are applied in the appropriate manner to arrive at the correct answer. Written work attempts to analyse, and shows the ability to interpret and make recommendations to economic principles covered in this subject.	Principles are applied in the appropriate manner to arrive at the correct answer. Written work shows the ability to interpret and makesome key recommendations to economic principles covered in this subject.	Discussion reflects basic understanding of relevant principles. Some inclusion of relevant recommendations.	Principles are not applied appropriately, correct answer is not provided. Written work does not make suitable/relevant recommendations to economic principles covered in this subject.
Academic writing skills and referencing	Information, spelling, grammar and written expression is set out ina coherent manner, with professional presentation. Appropriate use of font, formatting, diagrams etc., where relevant. Referencing should follow the APA style, see the presentation requirements.	PassSustained, consistent and logical presentation of work.Accurate spelling and grammar, excellent written expression and syntax.Appropriate referencing of articles and web-sites.				Structure of work does not demonstrate a consistent and logical presentation format. Inaccurate spelling anduse of grammar, inconsistent written expression. Incomplete or inaccurate referencing.