SUBJECT: ECONOMICS:

QUESTION FOUR:

4.2 Explain how fiscal policy can be implemented if an economy is in the downswing of a business cycle.

SUBJECT: ECONOMICS:

QUESTION FOUR:

4.1 Assume the aggregate demand of an economy is rising at 3%, but its productive capacity is only rising at 2%. Discuss the type of inflation this would lead to. Use a diagram to motivate your answer.    

Subject Economics:

QUESTION TWO

2.2 Discuss and motivate whether the following market structures can engage in price discrimination:

2.2.1 Perfect competition

2.2.2 Monopoly

Subject Economics:

QUESTION TWO:

2.1 Explain the kinked demand curve theory of an oligopoly. Include in your answer a discussion of a contemporary oligopoly.

Analyse the Impact of the coronavirus pandemic on the global economy, elaborate your answer using a diagram

Write a page on the Economic Aspects of France. Report about the country's major economic indicators, such as GDP and GPD per capita, unemployment rate, major imports/experts, currently fluctuation, recent up/downturns, etc.

     

SUBJECT: ECONOMICS:

QUESTION ONE:
Explain the type of pricing strategy that you as the manager of a company would implement for Good X and Good Y with the following price elasticity of demand co efficients. Use diagrams to motivate your answer.

a). Good X: 2.3

b). Good Y: 0.6

The Birr is the official currency of Ethiopia. The Wakandan dollar is the official currency of Wakanda. Both countries use flexible (floating) exchange rates

If in Ethiopia the CPI increases from 160 to 167 while in Wakanda the CPI increases from 120 to 126, what do we predict?

Answer: "we predict that the Birr will appreciate relative to the Wakandan dollar". Why?

Thanks

Tesco Exits South Korea

Tesco was founded in 1919 by Jack Cohen (Cohen), who invested his serviceman’s gratuity of £30 in a grocery stall. The first private label product introduced by Cohen was Tesco Tea. The name Tesco was a combination of the initials of the tea supplier TE Stockwell, and the first two letters of Cohen’s name. Tesco opened its first store in 1929 in Edgware, London. In 1947, Tesco Stores (Holdings) Limited was floated on the Stock Exchange with a share price of 25 pence and the first supermarket was opened in 1956 in Maldon, Essex, England. The first superstore was opened in 1968 in Crawley, West Sussex. In the 1960s, Tesco went on an expansion spree and acquired several store chains. The Retail Price Maintenance (RPM) Act in Britain prohibited large retailers from pricing goods below a price agreed upon by the suppliers. To overcome this obstacle to price reduction, Tesco introduced trading stamps. These were given to customers when they purchased products and could be traded for cash or other gifts. RPM was abolished in 1964, and from then on, Tesco was able to offer competitively priced products to its customers in a more direct manner. The first Tesco superstore, with an area of 90,000 square feet, was opened in 1967.

TESCO’S GLOBAL EXPANSION
Tesco’s global expansion began in 1979, when it entered Ireland by acquiring a 51% equity stake in ‘3 Guys stores’. In 1986, Tesco divested itself of the stores after it found that it could not sustain its operations in the country as customers were rejecting the British products that it sold. During the late 1980s and the early 1990s, Tesco examined the options available in the US and European countries after the British government introduced new regulations on ‘out-of-town’ stores. In December 1992, Tesco entered France by acquiring an 85% equity holding in Catteau supermarkets, which operated under the Cedico brand with 72 superstores, 7 hypermarkets, and 24 small stores. However, Tesco failed to sustain itself in the market due to competition from French retailers like Carrefour and Promodès. In 1995, a law was passed in France which prohibited the opening of new large retail stores. Moreover, the company failed to adapt its products to suit local tastes and lost market share. In 1996, in spite of investing an additional £ 300 million in France, sales in the country grew by a mere 1%. In the year 1997, Tesco sold its operations in France to Prom odes.

TESCO IN SOUTH KOREA
In the early 1990s, there was a growing demand from consumers in South Korea for a modern shopping experience owing to rapid economic growth and increasing disposable incomes. The government had adopted protectionist policies and the retail sector was not open for foreign direct investment (FDI). Tesco

entered South Korea in 1999 through a joint venture with Homeplus, a unit of the country’s biggest business group Samsung Corporation (Samsung) . In the next few years, Tesco became the most successful international retailer in the country. Its success was attributed to its ability to localize its products and stores to appeal to the South Korean consumers; its operating through local management; and its strong presence through different store formats. South Korea went on to become Tesco’s most successful international business in terms of revenue. As of 2014, it operated d 140 hypermarkets, 609 supermarkets, and 326 convenience stores.

TESCO’S STRATEGIES IN SOUTH KOREA
Immediately after entering into the joint venture, Tesco went about upgrading the store layouts. The stores were modified to resemble department stores, which were spacious and clean. Tesco’s stores in Korea did not resemble its stores in the UK or in other European locations like Hungary, Poland, the Czech Republic, and Ireland.

CHANGES IN THE OPERATING ENVIRONMENT
In October 2012, when Tesco posted its first fall in profits in 20 years, the company also announced that its profits in South Korea would take a £ 100 million hit due to the "retail market development bill” that had been passed by the government in November 2010. However, changes in the operating environment in South Korea due to new laws that were enforced beginning 2010 to protect small retailers and merchants started to impact Tesco and other large retailers. These laws placed restrictions on the locations where supermarkets could be opened. The Distribution Industry Development Act passed in 2012 imposed restrictions on the time for which the stores could remain open and also specified that on two weekends every month the large retail stores should be closed. As most Koreans shopped during the weekends, these restrictions started to impact Tesco, which made losses in 2015. Under the impact of the global recession, the private spending in South Korea fell. Another factor that impacted Tesco in South Korea was its UK business, which was not doing well.

TESCO’S EXIT FROM SOUTH KOREA
On September 07, 2015, Tesco PLC (Tesco), a British multinational grocery and general merchandise retailer, announced that it had sold its South Korean business, operated under the name Homeplus, for £4.2 billion to a consortium of companies led by MBK Partners, a South Korean buyout firm. The consortium included Canada Pension Plan Investment Board, Public Sector Pension Investment Board, and Temasek Holdings (Private) Limited

Question - Case study

Use the case study above to answer the question

What do you think did not work well for Tesco?

Using the Tesco Case discuss the need for companies to consider push and pull factors for international expansion.

A medical device manufacturer sells its sterilization equipment to consumers with an inverse demand curve of P = 6,000 – 400Q, where Q measures the number of sterilizers in thousands and P is the price per unit. The marginal cost of production is constant at $4,000. A) Solve for the profit-maximizing price and quantity. B) The Patient Protection and Affordable Care Act signed into law by President Barack Obama levies a tax on medical devices. Suppose the tax raises the marginal cost of production from $4,000 to $4,400. What are the new profit-maximizing price and quantity? C) Suppose instead the law calls for a 20% tax on a firm's total revenue and leaves their marginal cost unchanged, what are the profit- maximizing price and quantity under this scenario?

critique the following statement: Thank goodness we have so many government regulatory agencies. They keep Big Business in check.

Think about the cost and benefit of regulations. Who benefits the most (consumers vs producers) from stringent regulations? Give some real world examples of a business or an industry that is highly regulated and discuss the implications of such regulation to the business or industry and to consumers.

Using the table below, make some calculations and answer the questions:

Year Nominal GDP Billions Real GDP Billions

2013 16,691.5 15,612.2

2014 17,393.1 15,982.3

2015 18,036.6 16,397.2

2016 18,569.1 16,662.1

2016 18,569.1 16,662.1

Compute the rate of growth of the economy...

a) Between 2013 and 2014 (2 POINTS)

b) Between 2014 and 2015 (2 POINTS)

c) Between 2015 and 2016 (2 POINTS)

d) Comment briefly on your previous results (use three lines). (2 POINTS)

e) Which one is more important: Nominal GDP or Real GDP? Why? EXPLAIN briefly. (2 POINTS)

What are the strengths and weaknesses of each of the competitors in the leasing industry?

which pricing strategy do you think was used by Snap? Examining at least 3 of the factors