You are welcome to ask questions on Economics. I am looking to explain economic principles / ideas/ recent developments in economics. Due to the volume of questions, I can no longer promise to answer. But, I will try if it meets below criteria.
I will post the answer on this blog, for everyone to benefit from. I never email individual answers
Please Bear In Mind
- Use google custom search (top right) to see if question has been asked. If I have already answered a question I don’t tend to repeat it.
- The replies will be guidance and not for duplication. Your essays should be your own work.
- Don’t ask me to do your coursework / assignment e.t.c. The answer will be published here where your teacher can see it.
- My speciality is economics for British A Level standard.
- I don’t answer university questions or maths calculations
- I am looking to explain economic principles / ideas/ recent developments in economics.
- I will answer as a new post. Check home page of blog for new post. With question and answers
I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.
Related
About The Author
Identify all the components of the Quantity Theory of Money and explain the basic assumption concerning Velocity. Then, use the Quantity Theory of Money to show how inflation can occur from an increase in the Money Supply. (you may make up your own numbers for both the initial and final conditions)
Country X has a world class economic infrastructure. To attract foreign direct investors, the country’s national government invested a huge amount of money to improve economic infrastructure in the country. The government also provided foreign investors with generous investment incentives. For instance, foreign companies starting up new businesses in the country would be awarded a ten-year tax holiday which would start one year after the start of production operations. In addition, foreign companies would be allowed 100 percent ownership of their businesses.
These measures, together with others, led to the inflow of substantial capital investment into the country. Foreign factories sprang up in and around cities which sprawled considerably. Local economies boomed as a result of those investments. Local incomes soared, as did the number of employed locals. However, there were several problems. Migrations from rural areas to urban centers increased significantly, leading to urban overcrowding, substantial incidence of crimes, and traffic congestions In addition, there were high levels of air pollution and industrial waste
Questions:
01.Name all negative externalities and one positive externality in this case.
02.Select one negative externality and show how the government can use fiscal policy (i.e., increases/decreases in taxes and public spending) to deal with it.
03.If the government imposes a very high tax on the profits of the companies investing in the country, what would happen to aggregate supply curve in the country? Draw a graph to show this effect.
Hello Brian
There is no rule of thumb about which good has what price elasticity of demand. It depends on many things like substitution of burger or beef. A good substitution makes demand more elastic and types of consumers. Effect of change in price on rich consumers would be less and there are many other things like habits etc.
Higher prices do not always increase revenue. It depends on elasticity of demand. If good or service is highly elastic , then increase in price can decrease demand heavily and total revenue may decrease.
Hi Jaxin
1.If demand is inelastic then price is not important means demand will not change with change in price. Suppose US exports goods to Japan & Demand for these goods is inelastic. So total quantity would not change.
2. After depreciation of yen, total import measured in Yen would increase because you have to pay more yens for goods.
3. But Value of import in US dollar would not change directly because only Yen depreciated and nominal value of dollar remained same. Nominal Value of import in US dollar would not change theoretically.
4. Yes you are all right. Value= price* quantity
Consider a small country that is a net importer of wheat which is the country’s main food staple. Using the concepts of producer surplus and consumer surplus, contrast the economic impact of a deficiency payments policy with that of a managed market policy (import taxes, etc.) as alternatives to increase the revenues of wheat producers. Use a diagram to illustrate your answer, and carefully define all your terms.
The UK economy is currently facing significant increases in the prices of the raw materials that it imports, most notably oil and copper. Explain using the AS/AD model how this is likely to affect national output as well as the price level.