ECO0006 Economics for Managers

Diploma in Banking and Finance

Diploma in International Business
October 2023
Continuous Assessment 1 (Individual Assignment: 50 marks)
30% of Final Grade

INSTRUCTIONS TO STUDENTS:

1. This assignment consists of THREE questions and 6 pages. Answer ALL questions.

2. Type your answers in a Word document using Times New Roman, font size 12 and
submit via Canvas. Assignments submitted through other ways (e.g. through email or
hardcopy to the lecturer) will not be accepted.

3. Diagrams may be drawn with a digital stylus or hand-drawn and uploaded as an image.
All other parts of the answer that are NOT typed out will NOT BE GRADED.

4. Open your document in Canvas after upload to ensure that the document submitted is
complete and in order.

5. Your submission should include a cover page that follows the following format:

Module Code & Module Name

Diploma Name
CA 1 (Individual Assignment)
Name
SIM Student Number

6. Do not type the questions into your submission.

7. Deadline: 25 October 2023 (Wednesday), 11 59am.

8. Be reminded that a one-day late submission is subject to a 20%-mark deduction.

Submissions that are late by more than one day will NOT be graded.

9. CA1 is an individual assignment and should be worked upon independently. Any form
of plagiarism and/or collusion will be penalised.
Important Note:
Students caught for Plagiarism and/or Collusion will be subjected to heavy penalties.
Plagiarism & Collusion
(extracted from Student Handbook)
3.7.2 Plagiarism/Collusion
Plagiarism is theft of intellectual property. It is a form of lying, stealing and mistreating
others. Students are reminded that plagiarism is a serious offence subject to the Institute’s
disciplinary procedures.

Plagiarism can mean any one of the following:

• direct copying of phrases and/or passages without a reference and/or quotation marks;
• paraphrasing another writer’s work in your written work without citing the reference;
• making a direct reference to an author you have not read although you may have read about
him. The correct way is to reference the secondary source you have actually read rather
than referencing the original which you have not read;
• copying the work of another student, in part or in whole;
• handing an assignment that has already been submitted for assessment in the same or any
other course.

Please note that it is also a disciplinary offence for students to allow their work to be plagiarised
by another student.

A student found guilty of any of the above offences will render the student liable for
disciplinary actions which may result in the voiding and adjustments to the continuous
assessment grade, and may result in expulsion from the Institute.

2
Question 1 (10 marks)

Use the information given to answer the questions below.

Genetics and AI: The tech that goes into growing strawberries in Singapore

SINGAPORE: Juicy strawberries, plucked from the vine and into my mouth – this was not
something I was expecting to taste in sweltering Singapore. The fruit is the yummy result of years
of research into how key genes affect plant growth by Singrow CEO and co-founder Bao Shengjie
and his team. “We managed to cross-breed and developed the world’s first tropical strawberries, that
adapt well to warmer climate conditions. They also grow faster – going from the nursery to harvest
in about two months, or about 30 per cent faster than the norm, said Dr Bao.
But strawberries are just the testbed for the technology. Singrow will provide the outdoor farms with
its crop varieties, starting with strawberries. It will also work with the farms to improve their farming
techniques for existing crops, with plans to reduce their fertiliser use by 30 per cent and pesticide
use by 70 per cent.

Source: www.cna.com.sg, 12 April 2023

(a) If Singapore produces cars and strawberries, use a Production Possibility Curve (PPC)
diagram to illustrate and explain the impact of the development in paragraph 1.
(4 marks)

(b) If Singapore produces strawberries and vegetables, use a PPC diagram to illustrate and
explain the impact of the development in paragraph 2.
(4 marks)

(c) On your diagram in part (b), mark out a combination of output that illustrates the
concept of scarcity.
(2 marks)

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Question 2 (22 marks)

(a) Use information from the passage to answer the questions below.

Tokyo Disneyland & Universal Studios Japan set to raise 1-day ticket prices to
nearly S$100

One-day admission tickets for adults to Universal Studios Japan and Tokyo Disneyland
will soon increase to nearly S$100. The increase comes as inflationary pressures grip
Japan, compounded by a weakened yen and high operational costs.

Increase in prices to ease visitor traffic.

This was done “in order to minimise the difference in the number of guests visiting the
parks on weekends and weekdays”. Tickets are expected to reach their peak price on
weekends and holidays such as Christmas, and will be priced the cheapest during
weekdays.

Source: Extracted from www.mothership.sg

(i) Identify a factor of supply from the passage that led to the rise in the price of 1-
day tickets to Tokyo Disneyland & Universal Studios Japan. Use a market diagram
to aid your explanation.
(4 marks)

(ii) Use a demand diagram to explain how the increase in price can “ease visitor
traffic”.
(4 marks)

(iii) Use the concept of price elasticity of demand to explain how the pricing policy in
the last paragraph will help to “minimise the difference in the number of guests
visiting the parks on weekends and weekdays”. (Hint: Consider the price elasticity
of demand for weekday tickets vs weekend tickets.)
(6 marks)

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 (iv) Based on your answer to part a(iii), use a relevant diagram to illustrate and explain
how a rise in the price of a 1-day ticket during the weekend will affect total
revenue.
(4 marks)

(v) If the price elasticity of demand for the most expensive Adult 1-Day Passport is
-0.8, calculate the percentage change in quantity as a result of the rise in price.
Use information in the table to answer the question.
(4 marks)

Question 3 (18 marks)

The following table provides information about a firm that produces toothpaste. Use the
information to answer the questions below and show all working clearly.

Toothpaste Total Cost

(Units) ($)
0 30
10 90
20 140
30 240
40 360

(a) State the value of the fixed cost incurred by the firm.
(2 marks)

(b) State the period of production that the firm is operating in.
(2 marks)

(c) Calculate the average variable cost incurred by the firm to produce 20 units of
toothpaste.
(2 marks)

(d) Calculate the marginal cost incurred by the firm to increase its output of toothpaste from
30 units to 40 units.
(2 marks)

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(e) Calculate the average fixed cost incurred by the firm if it were to produce 50 units of
toothpaste.
(2 marks)

(f) If the firm is a price-taker, state the market structure that it operates in.
(2 marks)

(g) If the market equilibrium price is $10, use the profit-maximising condition to find the
optimal output of the firm and calculate the profit at this level of output.
(4 marks)

(h) Based on your answer to part (g) identify the type of profit made.
(2 marks)

The End