Economics

Economics And Quantitative Analysis Assessment 1

You can download the solution to the following question for free. For further assistance in Economics assignments please check our offerings in Accounting assignment solutions. Our subject-matter experts provide online assignment help to Accounting students from across the world and deliver plagiarism free solution with free Grammarly report with every solution.

(ExpertAssignmentHelp does not recommend anyone to use this sample as their own work.)

Assessment Type

Assignment

Word Count

1200 words

Subject

Economics

Deadline

2 Days

Assignment Criteria

Instructions 

As a policy analyst you have been asked to calculate the elasticity of demand for university  courses. Questions 1 to 4 are based on the assumption that the universities that increased their  fees by 35% experienced an overall decrease in student applications of 7%. 

  1. What is the price elasticity of demand for courses at the universities that increased  their fees by 35%? (1 mark
  2. Is the demand for these courses elastic or inelastic? (1 mark
  3. What factors do you think are responsible for this degree of elasticity? (2 marks) 4. Is tuition fee revenue likely to increase or decrease at these particular universities? (2 marks

Questions 5 to 8 are based on the assumption that the 35% fee increase at the universities that  increased fees caused an overall increase in student applications of 12% at those universities  that did not increase their fees. 

  1. What is the cross-elasticity of demand for courses at universities that did not increase  their fees with respect to the price of courses at universities that did increase their  fees? (2 marks
  2. Are courses at different universities substitutes or complements? (2 marks)
  3. Is demand for courses at the universities that did not increase their fees elastic or  inelastic with respect to universities that did increase their fees? What is the  importance of this degree of elasticity? (2 marks)
  4. Finally, what are some of the factors that might cause the Minister for Education to  argue that changes in demand for course are not necessarily related to the fee changes? (3 marks)

Why Choose Us?

Assignment Understanding Brief

Review your requirements with our FREE Assignment Understanding Brief and avoid last minute chaos.

Global PhD Experts

We provide you services from PhD experts from well known universities across the globe.

Free Grammarly Report

No more plagiarism worries. We give you a FREE Grammarly report with every assignment.

Delivery Before Deadline

Our experts work round the clock to provide you with solutions before the scheduled deadline.

Assignment Solution

Purpose:

As a policy analyst, my aim is to evaluate the response of the students to the proposed variations in the fee structure in different universities. By using various examples the report aims to understand the concept about the various terms like the price elasticity, degree of elasticity, cross elasticity etc. 

METHOD:

Elasticity:

Elasticity may be defined as the measure of the changes in a variable as due to the changes in the different variable (Imbs & Mejean, 2015). The value of elasticity is evaluated on the following basis:

  1. When the value of Elasticity is greater than 1 than it refers that the minimum changes in the price of the commodity will affect the quantity of the commodity demanded 
  2. When the value of elasticity is equal to one, it means that the slight variation in the price of the commodity will affect the demand for only 1 unit of that commodity.
  3. And in case the value of elasticity is less than 1, then the slight variation in the price of the commodity will not affect demand for the quantity of the commodity  (Allan Layton, Tim J. C. Robinson, & Tucker, 2011). 

Own-Price Elasticity:

When all the factors and parameters remain unchanged then the ratio of the % of the change in the quantity of a commodity to the % change in the cost of the commodity is called the own-price elasticity. 

Cross-Price Elasticity:

The cross-price elasticity may be defined as the measure of the changes in the demand of a particular commodity when the cost of another commodity is changed. 

Price Elasticity of Demand:

Price elasticity of demand = % change in quantity demanded/% change in price

Thus in this situation the % change in the quantity demanded is equal to the % changes in the number of applicants for the courses, i.e = Decrease of 7%

Further, the % change in the price can be said to be the % change in the fees of the University = increase of 35%

Hence the Cross-Price Elasticity of demand can be given as:

Cross-price Elasticity = % change in the demand for a particular commodity(X)/ the % change in the price of another commodity(Y). 

RESULTS:

In the given situation, commodity X may be referred to those courses for which the fees are not increased by the university. 

The % in the demand for these Universities = Increase of 12% 

The commodity Y can be referred to those universities where the course fees have been raised. 

The % change in the price of such universities = Increase of 35%. 

Hence the Price Elasticity Of Demand for those universities where the course fees are increased by 35% = 7÷ 35 = 0.2 

The Cross-price elasticity of demand is obtained as the ratio of those universities where the price of the course is not increased to those universities where the fee structure of the courses is changed.  This can be given as, 

= 12÷ 35

= 0.3428 ≈ 0.34

Download This Assignment Sample For Free

    This form collects your email so that we can correspond with you through our newsletters. Checkout our Privacy policy for more information.
    Yes, i consent to this conditions.