What is moral hazard? List three things an employer might do to reduce the severity of this problem. Explain your answers. There should be +6 sentences (75 words) or you will not be given credit.

Two firms produce a similar product and are located 20 miles apart along a linear market.

They have a constant marginal and average variable cost equal to 5 dollars per unit of output. It

costs one dollar to transport the product one mile. Consumers are uniformly distributed along the

market. Draw a graph of the market and indicate the optimal price for each firm to charge, how

much of the market each firm serves, and how much profits each firm receives. Explain how this

model generalizes to a circular market with free entry and variable location. What role do profits

play in establishing an equilibrium in the generalized model.

Explain how in an imperfect capital market where there is risk, that a low price-earnings ratio strategy may be able to generate excess market returns. Please discuss the asset pricing models we have covered in answering the question.

    31. The following is the annual demand function for good A:

                Q_DA = 400 – 20P_A + 10P_B + 0.01Y

where P_A is the price of good A; P_B is the price of another good, good B; Y is income.

1. Is good A a normal good or an inferior good? Explain.
   
2. Is good B a complement or a substitute for good A? Explain.
   

Assume that the current price of good B is £5, income is £50 000, and the annual supply function for good A is:

                Q_SA = 100 + 10P_A

3. Calculate the equilibrium price and quantity.

4. Calculate price elasticity of demand if the price of good A rises by £5 from the equillibrium price and the demand decreases by 7% and what does this show about the product ?

5. Calculate the price elasticity of supply if the amount supplied increases by 26.60 units (from the equillibrium) and this results in a decrease in price of 4%. Suggest what this figure shows              

How has mining, tourism and agriculture been affected by the Covid-19 corona virus In African countries and how has it affected access to international markets.
(1000 words)

Explain the difference between absolute and relative convergence. Create an example in which there is relative convergence but not absolute convergence and explain your example

Due to corona virus explain the price elasticity of demand when demand decreases for the airline industry and the income elasticity of demand when there is a fall in disposable income what will happen to the airline industry as a luxurious good provide graph provide graphs and calculations where necessary. Explain how the airline industry can deal with such changes e.g what will happen if they decrease the price or increase price etc.

On a diagram, show the long-run equilibrium for both firm and industry under perfect competition. Now assume that the demand for the product rises. Show the new short term effects and discuss what might happen after the market responds.

Q19

Time lags in expansionary monetary policy can cause

Question 19 options:

IY1 Economics for Business Individual Course Work - Suggested Structure

1. INTRODUCTION:

Show an understanding of the requirements of the assignment by:

• Define Macroeconomics and identify the key macro-economic policy issues.
• State how government influences these policy issues specifically in the context of the UK economy in 2019

2. The Macro Economy

• Identify the key participants/actors in an economy and their role in the circular flow
• Briefly explain the relevance of the macroeconomic indicators and how the impact on a country’s economy
• Identify the key macroeconomic objectives of governments in general but specifically the macro economic objectives of the UK government in the context of the UK economy in 2019.

3. The Macro Economy and its impact on businesses

• State how these macroeconomic indicators impact on businesses
• Using relevant data give an overview of the UK macro-economic situation in 2019 and its impact on UK businesses

4. Fiscal and Monetary policy

• Explain fiscal and monetary policies and how government uses these policies to influence the macroeconomic indicators
• Discuss how the UK government used fiscal and monetary policies to address some of the issues identified in your overview relating to UK businesses

5. Support your essay with relevant data, diagrams and accurate Harvard Referencing style

Economic Objectives of government include

• Sustainable economic growth
• Low inflation (2% Per Annum)
• High Employment / Full Employment
• Favourable balance of payment/ Current account surplus
• Rising Standard of living / Relative decline in poverty
• Improvement in productivity
• Good government finances- Low or reduced budget deficit
• Reduction in Inequality
• Improved economic well-being
• Sustainable Environment

Answer True, False or Uncertain. Brieáy explain your answer

Please explain

1. A permanent increase in money supply cannot affect any variable in the OLG model of money.

2. In the OLG model of money, Fiat money does not pay interest, so money's rate of return is 1.

3. Suppose that the government finances its expenditure through seigniorage revenue. There exists an upper limit on the amount of the seigniorage revenue that can be generated.

4. The original Phillips curve finds that there is a negative correlation between inflation and output growth.

5. The Lucas critique indicates that the government can use a random monetary policy to stimulate output.

. The following is the annual demand function for good A:

                Q_DA = 400 – 20P_A + 10P_B + 0.01Y

where P_A is the price of good A; P_B is the price of another good, good B; Y is income.

1. Is good A a normal good or an inferior good? Explain.
2. Is good B a complement or a substitute for good A? Explain.

Assume that the current price of good B is £5, income is £50 000, and the annual supply function for good A is:

                Q_SA = 100 + 10P_A

3. Calculate the equilibrium price and quantity.

4. Calculate price elasticity of demand if the price of good A rises by £5 from the equillibrium price and the demand decreases by 7% and what does this show about the product ?

5. Calculate the price elasticity of supply if the amount supplied increases by 26.60 units (from the equillibrium) and this results in a decrease in price of 4%. Suggest what this figure shows