BEO 1105 Economic Principles
Assignment: Semester 2, 2012
DUE: 21 September, 2012 (refer instructions on submission due date and time)
Value: 20% of Total Assessment
Instructions (for KL campus):
* Since the assignment forms a part of the final assessment for the subject, no assistance will be provided by the staff in relation to answers to the questions. However, if you need any clarifications in regard to the questions, you may contact the lecturer/tutor.
* You should comply with the assignment presentation requirement as outlined in the subject guide.
* The assignment must be typed with a maximum of 600 words in total. Word count must be indicted on the last page of your assignment.
* You should attach the duly completed ...view middle of the document...
* The completed assignment must be lodged with your tutor in their respective office on Friday, 21 September 2012 from 3.30 pm to 4.30 pm ONLY. You may submit the assignment on behalf of your friends. Submission after 4.30 pm is deemed as late submission.
* For unauthorised late submission, marks will be deducted at a rate of 5 marks per day (including weekends) to a maximum of 3 days. Thereafter, the assignment will not be marked and a zero mark will be awarded for this assessment.
Should a request for late submission be made, you are to do so with the subject lecturer either before the submission due date or no longer than three days after the due date. Any request thereafter will not be entertained.
Question 1 (9 marks)
During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in terms of prices and quantities.
(a) Computers (3 marks)
(b) Computer software (3 marks)
(c) Typewriters (3 marks)
Question 2 (6 marks)
After an economics lecture one day, your friend suggests that taxing food would be a good way to raise revenue because the demand for food is quite inelastic.
(a) In what sense is taxing food is a ‘good’ way to raise revenue? (3 Marks)
(b) In what sense is it not a ‘good’ way to raise revenue? (3 Marks)
Question 3 (5 marks)
Most studies of firms’ long run costs have found that average costs decline as firms produce increasingly larger output levels (economies of scale), such as for automobile firms. However, trucking (haulage) firms appear not to experience falling average costs associated with large-scale operations. Why might this be the case? Explain.