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    Economics

    Microeconomic Assignment Help Australia

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    Microeconomic Assignment Help Australia


    Microeconomic Assignment Help Australia

    Question 1. a)

    i) 4 kg of coffee or 2 kg of nuts can be picked by Jara in an hour. On the other hand, 2 kg of coffee or 4 kg of nuts can be picked by Peng in an hour. Moreover, Jara and Peng work for 6 hours in a day. Therefore, maximum kilograms of coffee can be picked if Jara and Peng pick only coffee in the entire day. Thus, Jara can pick a total of 24 kg (46) of coffee in the whole day. On the other hand, Peng can pick a total of 12 kg (26) of coffee in the whole day. Therefore, Jara and Peng can pick a maximum of 36 kg (24 + 12) of coffee in a day.

    ii) Maximum kilograms of nuts can be picked if Jara and Peng pick only nuts in the entire day. Thus, Jara can pick a total of 12 kg (26) of nuts in the whole day. On the other hand, Peng can pick a total of 24 kg (46) of nuts in the whole day. Therefore, Jara and Peng can pick a maximum of 36 kg (12 + 24) of coffee in a day.

    iii) Maximum kilograms of coffee were being picked by Jara and Peng when two of them were picking only coffee. Thereafter, they decided to pick 4 kilograms of nuts each day. Therefore, Peng would pick 4 Kg of nuts in one hour because of being the most efficient. Thus, 5 hours will be left for Peng to pick coffee. Therefore, a total of 10 kg (25) of coffee can be picked by Peng. On the other hand, Jara would pick a total of 24 kg (46) of coffee. Thus, a total of 34 kg (10 + 24) of coffee can still be picked.

    iv) Maximum kilograms of nuts were being picked by Jara and Peng when two of them were picking only nuts. Thereafter they decided to pick 8 kg of coffee per day. Therefore, Jara would pick 8 kg of coffee in 2 hours (84) because of being the most efficient. Thus, 4 hours will be left for Jara to pick nuts. Therefore, a total of 8 kg (24) of nuts can be picked by Jara. On the other hand, Peng would pick a total of 24 kg (46) of nuts. Thus, a total of 32 kg (8 + 24) of nuts can still be picked.

    v) If Jara picks coffee for 5 hours, 20 kg (45) of coffee would be picked. Thus, Jara would pick another 2 kg of nuts in one hour. On the other hand, Peng would pick a total of 24 kg (46) of nuts in 6 hours. Thus, 26 kg (2 + 24) of nuts can be picked.

    Question 1. b)

    i) 30 kg of coffee and 12 kg of nuts can be attained in one day. Jara can pick 24 kg (46) of coffee. Rest 6 kg (30 - 24) of coffee can be picked by Peng in 3 hours (3as Peng picks 2 kg of Coffee in an hour. In another 3 hours Peng can pick 12 kg (43) of nuts. However, this is not an efficient point as 24 kg of coffee and 24 kg of nuts can be picked per day which is an efficient point. In this case, Jara would pick only coffee (46 = 24) and Peng would pick only nuts (46 = 24).

    ii)

    iii) Jara has comparative advantage in picking coffee and Peng has comparative advantage in picking nuts. Therefore, Jara would completely specialise in picking coffee and would pick 24 kg (46) of coffee. On the other hand, Peng would completely specialise in picking nuts and would pick 24 kg (46) of nuts. Thus, Jara would earn a total of $48 by selling 24 kg of coffee (242 = 48). Peng would also earn a total of $48 by selling 24 kg of nuts (242 = 48). Therefore, they can earn a total of $96 (48 + 48) by selling all their produce.

    iv) Jara and Peng can earn a total of $96 by selling all their produce. Thus, they can buy a maximum of 48 kg (962) of coffee from the world market at $2 per kg of coffee. Similarly, Jara and Peng can also buy a maximum of 48 kg of nuts from the world market at $2 per kg of nuts. Jara and Peng can also consume 40 kg of nuts and 8 kg of coffee each day with $96 (40 kg of nuts$2 + 8 kg of coffee$2 = $96).

    v) If Jara specialises in picking coffee and Peng specialises in picking nuts, they can earn a total of $96 by selling all their produce. Thus, they can consume a total of 48 kg of goods in total as both coffee and nuts are priced at $2 per kg. Thus, the Production Possibility Curve (PPC) of coffee and nuts can be represented by the following diagram.

    Figure 1: Possible combinations of Coffee and Nuts (PPC)

    (Source: Created by author)

    Thus, the combination of coffee and nuts can be (0,48), (1, 47), (2, 46), (3, 45), (4, 44), (5, 43), (6, 42), (7, 41), (8, 40), (9, 39), .............., (40, 8), (41, 7), (42, 6), (43, 5), (44, 4), (45, 3), (46, 2), (47,1) and (48,0).

    Question 2

    The supply curve of Firm 1 is P = 2Q1 and the supply of Firm 2 is P = 2 + Q2. Here, P denotes price of the commodity, Q1 denotes output of Firm 1 and Q2 denotes output of Firm 2. In this context, market supply curve can be obtained by horizontal summation of the output of Firm 1 and Firm 2 (Wadman, 2016, p.43). Therefore, market supply can be denoted by Q = Q1 + Q2.

    as (P = 2Q1 and P = 2 + Q2)

    3P = 2Q + 4 is the market supply curve.

    Price

    Q1

    Q2

    Q

    2

    1

    0

    1

    4

    2

    2

    4

    6

    3

    4

    7

    8

    4

    6

    10

    10

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