Unit DetailsName Economics for Managers
Code HM5003 (BM1)
Year, Trimester Trimester 2, 2024
Assessment Details | Name | Final Individual Assessment |
| Due Date & Time | 5September, 2024 11.59pm |
Student Details | Student Number | |
| First Name | ||
| Family Name |
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Where applicable, and for the majority of the questions, please refer to the case study provided on Blackboard.
Pakistan familiesare reportedly still hungry and homeless six months after floods. Forced to endure a ‘humiliating’ life in tent cities, waiting forstagnant waterto recede, villagers say they have been abandonedby Shah Meer Baloch in Dadu. Suppose you owned a grocery shop selling rice among other commodities. Due to effects of the floods that affected your store, some rice is brown and mixed with sand. Consumers always complain and prices are not predictable. Use your knowledge of microeconomics to address the task below:
Use two graphs to explain the factors that affect demand for your grocery shop especially rice a food of Pakistan.
ANSWER (box will enlarge as you enter your response)
Question 2: (10 marks)
John was a high school teacher earning a net salary of $54,000 per year. After working for one year, he quit his job to start his own milk bar business. In order to start the business, John borrowed $40,000 from the bank and was paying 5%interest per year. John also withdrew $50,000 from his savings account, on which he had been earning 5%interest per year.
John’s first year of business can be summarised as follows:
| Item | Amount $ |
| Revenue- Fresh milk section | 250,000 |
| Revenue- Yogurt Section | 180,000 |
| 2 Cashiers expense (wages per worker) | (40,000) |
| Truck expense | (80,000) |
| Manager expense | (60,000) |
| Milk sales assistant expense | (30,000) |
| Equipment expense | (50,000) |
| Motorcycle expense to ease movement in city | (30,000) |
| 2 milk freezers (cost per freezer) | (5,000) |
Required:
Use the information above to answer the following questions:
ANSWER
8Marks
ANSWER
Question 3: (10 Marks)
Pakistan has a well-established Fast-Moving Consumer Goods (FMCG) distribution system. With a population of 235.82 million and a population density of 318.09 people per square kilometre, the country’s FMCG distribution system is dominated by six (6) major multinationals: Muller & Phipps, AG&C, Premier Group, Procter & Gamble (P&G), United Distributors Limited (UDL) and Elite Brands Ltd.
Required:
ANSWER
ANSWER
Question 4: (10 marks)
Suppose the following information is extracted from Pakistan Bureau of statistics in 2023 fiscal year after the floods (production in units: price is per unit).
| Item | Base year 2022 | 2023 | ||
| Production | Price | Production | Price | |
| Used ladies’suits (units) | 4,000 | 50.00 | 5000 | 60.00 |
| Components used for tractor production | 8,000 | 500.00 | 11000 | 1,200.00 |
| Cloth | 8,000 | 25.00 | 12,000 | 30.00 |
| Gold gifts during marriage ceremonies | 1,800 | 2.00 | 2,000 | 3.00 |
| Milk (litres) | 5,000 | 1.30 | 7,000 | 2.50 |
| Computers | 2000 | 500.00 | 2,500 | 600.00 |
| Printers | 500 | 300.00 | 400 | 355.00 |
| Prohibited elephant tasks seized at Karachi | 200 | 1000 | 300 | 2000 |
| Raw materials for car assembling plant | 4500 | 250.00 | 4450 | |
Required:
Use the information in this table to answer the questions that follow.
ANSWER
According to State Bank of Pakistan, Sensitive Price Indicator is designed to assess price movement of essential consumer items at short intervals, on a weekly basis, so as to take corrective measures. As per a report issued by the Pakistan Bureau of Statistics, the prices of 23 essential commodities have increased in just one week ending on August 25, 2022. Among the items that have become expensive, the price of tomatoes increased by 43.09%, onions by 41.13%, potatoes by 6.32%, eggs by 3.43%, garlic by 2.23%, dry milk by 1.53%, dal mash by 1.12%, cigarettes 2.26%, and LPG 1.95%. The items whose prices dropped include dal masoor which fell by 1.18%, vegetable ghee by 1%, cooking oil by 0.51%, sugar by 0.07% and mustard oil by 0.07%.
Based on these changes, examine the future inflation expectation in Pakistan. 4 Marks
ANSWER
Question 5: (10 Marks)
“The floods have affected everyone but the impact is on the poor and labourers more than anyone,” says Rasool. “They don’t have anyone in the government. They don’t have any voice here. Rich and powerful people are getting money and all the help.” Rasool says he has heard many stories of corruption in the province. Overall damages are estimated at US$14.9 billion, equivalent to 4.8% of GDP in 2022.
Required:
ANSWER
Use a macroeconomic graph to explain how the government of Pakistan used taxation as a fiscal policy instrument to supporteconomic recoveryafter the floods.
5 Marks ANSWER
END OF FINAL ASSESSMENT
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