Economics

ContextVitro is a cultured meat producer based in the United States. You have beenhired as an
economic analyst to clarifyseveral issuesfor them.Assignment TasksYou are to provide your consultation
in the form of a report.
The questions you should address are in tasks 1-4Assessment criteria (Total 100marks) Task 115 Marks
Major health magazine has recently published an article about the health benefits of cultured meat. You
are to answer the questions in this section using appropriate diagrams.
A) Explain what is likely to happen to equilibrium price and quantity in the market (2 marks)
B) Explain how the magnitude of the effect on price and quantity is moderated by the elasticity of supply
(4 marks)
C) Suppose, at the same time as the news came out, a new regulation increased the cost of business for
cultured meat producers. Explain how the equilibrium price and quantity will be effected (4 marks)
D) Currently there are wage negotiations going on with trade unions, with trade unions bargaining to
increase wages of workers. What would happen to average total cost and marginal cost if they
succeeded? Consider a case in which labor costs are only variable costs and a case in which they are
both variable and fixed costs (5marks)
Task 220 Marks Currently Vitro operates in an oligopolistic market (duopoly) with only one other
competitor. They spend huge sums of money each year to advertise their products. Suppose both firms
could decide at the beginning of the year if they want to advertise. If neither firm advertises, each will
earn a profit of $4 million. If they both advertise, each will earn a profit of $2 million. If one firm
advertises and the other does not, the firm that does advertise will earn a profit of $3.5 million and the
other firm will earn aprofit of $1.5 million.
A) Usingpayoff matrix to depict this problem, identify the Nash equilibriumandexplain why the Nash
Equilibrium is the likely outcome in the absence of any collusion (6marks)
B) Compare and contrast the long-run equilibrium’s of the four market structures (perfect competition,
monopoly, monopolistic competition and Oligopoly) and discuss the efficiency implications of each
respective equilibrium outcome (14 marks)
3| Pa g eTask 325MarksVitro has decidedto internationalize and set up its operations in an emerging
market. Currently the board is considering to invest in either India or Brazil. A key consideration in the
decision, apart from current economic condition, are their growth potentials.
The data used for this task must be taken from valid sources and referenced properly.
A) Compare the current economic condition in the two countries using relevant economic variables (10
marks)
B) Compare the growth potential of the two economies using relevant economic indicators and suggest
which country has the higher potential for growth (15 marks) Task 440marksSelect a recent (From
January 2020onwards) article from the news about Monetary Policy measures in the United States.
The selected article must be from a credible source and must be referenced properly.
A) Starting with a short summary of the article, provide an analysis of the policy measures reported
in the article and discuss their potential impact on the economy using the Aggregate Demand
and Aggregate Supply Model.
B) (35 marks)B) Recommend supply-side fiscal policy measures that could be used to stimulate the
economy (5 marks