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ENS300 Environmental and resource economics USC

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ENS300 Assessment 1: Environmental economics fundamentals portfolio

Part 1: National income and environmental accounting

Refer to the resources provided and others that you identify.

In 400-450 words, explain the main differences between the following approaches and what they imply about progress and wellbeing in Australia?

  1. The Genuine Progress Indicator
  2. The Happy Planet Index
  3. The Indicator Suite: Measures of Australia’s Progress, 2013 

Complete portfolio due at beginning of Week 5 tutorial (March 27th, 2020)

Part 2: Utility and consumer demand (5 marks)

(Total word count – 250 words)

Step 1: Download the Module 1 Part 2 Utility and consumer demand spreadsheet and enter your name and student number in the grey cells in the first tab. Note: you must do this before you begin your analysis because your student number will generate different numbers in the spreadsheets compared to what other students are working with. Therefore, you can expect some of your numbers to be slightly different to those obtained by other students.

Note: You can only change values in grey cells, all other values are locked.

Step 2: Complete the questions below by entering information as instructed into the spreadsheet, analysing the outcomes, and recording your answers on this template.

Question 1

Go to the tab 1. Demand (petrol-individual)

In the grey cells, enter estimates for the following (note an estimate that is based on research and supported by a reference will be given greater marks because it demonstrates additional effort on your part):

  • Average weekly income Sunshine Coast (student)
    • Average price of an automobile (in Australia, QLD, or the Sunshine Coast – you choose)
    • Average price of an automobile that a typical student would buy (in Australia, QLD, or the Sunshine Coast – you choose)

How much petrol would the average fully employed person consume in a week if the price of petrol was $2.50 per litre?

How much petrol would the average student consume in a week if the price of petrol was $2.50 per litre?

At what price of petrol would the student consume zero litres per week?

Replace the Figure 1 on the following page with the same figure showing your results (including your name and student number).

If the price of automobiles dropped by 50%, would the amount of petrol consumed increase or decrease?

Based on your findings to the last question, are petrol and automobiles substitutes or complements?

Explain your reasoning.

Figure 1: Petrol demand in Sunshine Coast –fully employed individual and student

Question 2:

Go to the tab 2. Demand (petrol-market)

The table assumes that the Sunshine Coast petrol market comprises of 18 people, each having a different occupation as listed in the table. The table shows the ABS (Australian Bureau of Statistics) data for the average weekly income for those occupations and the quantity of petrol each person would consume at different prices.

What is the aggregate demand for petrol at a price of $1 per litre?

Imagine that the price of petrol continues to rise until only one car is on the road. What is the occupation of the person driving that car? Explain your reasoning.

Figure 2 below indicates that the aggregate demand curve has sections that are less elastic and sections that are more elastic. Provide an explanation for why this might be the case.

Replace the Figure 2 below page with the same figure showing your results (including your name and student number).

Figure 2: Aggregate petrol demand in Sunshine Coast

Question 3:

Go to the tab 3. Demand (bananas-individual)

Using the table and graph provided on the spreadsheet, and the ability to enter different values in the grey cells, determine if the following statements are true or false, and replace Figure 3 below with your figure to support your answers:

  • A decrease in the price of bananas will cause the demand curve to shift outwards leading to a greater quantity being consumed.
  • An increase in the price of oranges will cause less bananas to be consumed since they are complements.

Figure 3 Demand for bananas

Question 4:

In the following demand function x represents one good and y the other. Are x and y complements or substitutes? Explain your reasoning.

Part 3: Production costs and supply and market dynamics questions