Aston Business School BS1194: An Introduction to Business Economics SECTION B – MICROECONOMICS You should answer one question from this section

Aston Business School

BS1194: An Introduction to Business Economics

SECTION B – MICROECONOMICS

You should answer one question from this section.

QUESTION 1: WORD LIMIT - MAXIMUM 500 WORDS

The time-series below shows the annual price of maize. Using supply and demand analysis how might you analyse the fluctuations in the price of maize?

Source: WorldBank.org

In your answer, comment on the factors that impact upon the supply and demand for maize. In addition, make sure you include diagrams, comment on the elasticity of supply and demand for maize and utilise any other information you might know about this market. You should comment on three potential explanations for why cotton prices fluctuate. (100 marks)

QUESTION 2: WORD LIMIT – MAXIMUM 500 WORDS

Using an example (not Amazon), explain the different characteristics of a monopoly. Explain how these characteristics apply to the example you have chosen and how they differ from the assumptions of perfect competition. (100 marks)

SECTION C – MACROECONOMICS

You should answer one question from this section.

QUESTION 1: WORD LIMIT - MAXIMUM 500 WORDS

Using the Aggregate Demand/Aggregate Supply model (AD/AS), analyse how a policy maker might mitigate the consequences of a negative aggregate demand shock. Illustrate your answer by using a specific example and in particular include commentary on the effectiveness of fiscal and monetary policy. (100 marks)

QUESTION 2: WORD LIMIT – MAXIMUM 500 WORDS

Discuss the UK’s monetary policy framework and analyse in detail how interest rates impact upon inflation. In your answer, ensure that you comment on the costs of inflation. (100 marks)