[Solved]a) Use a supply and demand diagram to describe the UK energy market, explaining the upward or downward slope of the supply

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[Solved]a) Use a supply and demand diagram to describe the UK energy market, explaining the upward or downward slope of the supply and demand in your diagram

Understanding the Business and Economic Environment (UMED8A-15-1)

Referral Coursework (2015 – 2016)

Essay:

This essay is to be done in your own time.  You may choose between two titles. There is a maximum of 2000 words limit.  Both questions carry equal mark.

The deadline for submission is 12 July 2016.  It is your responsibility to ensure that you submit your assignment on time and in accordance with Blackboard criteria.

Question 1: Market analysis: demand, supply, equilibrium

Read and watch the following extracts for the UK energy market and answer the subsequent questions:

Extract 1: The Energy Market Explained

http://www.energy-uk.org.uk/energy-industry/the-energy-market.html

Extract 2: Energy Outlook

http://www.bp.com/en/global/corporate/energy-economics/energy-outlook-2035/energy-outlook-to-2035.html

a)    Use a supply and demand diagram to describe the UK energy market, explaining the upward or downward slope of the supply and demand in your diagram.

b)     Discuss the concepts of elasticity of demand and supply and external factors influencing the equilibrium position of energy market in 2015.

c)     Find out statistical forecast for future energy prices and comment on any likely impact of this forecast on the UK energy market within the next few years.

Hint:

• To answer this question you will need to draw a series of supply and demand diagrams, using the neoclassical model of markets discussed in Chapter 2 of the text, Mulhearn, C. & Vane, H.R. (2016) Economics for Business, 3^rd edition, Palgrave, explaining your reasoning using the comparative static approach. This approach is also used in any other reputable text books in economics.

• You should demonstrate your knowledge of elasticity of demand and supply for energy  both in the short run and long run.

Question 2: Economic Growth

Read the following extract by Paul Romer and answer the subsequent questions.

http://www.econlib.org/library/Enc/EconomicGrowth.html

This is a non-technical overview of economic growth written by Paul Romer – one the leading architects of new endogenous growth theory (see chapter 11 of the text book, Economics for Business).

1. What does Romer argue is the driving force behind economic growth: objects or ideas?
2. What factors does he identify as being particularly important in the acquisition and adoption of ideas by poor countries from the rest of the world?
3. What role do incentives play in the discovery of new ideas?
4. Why does Romer support subsidies for educations to increase the supply of scientists and engineers?
5. What fundamental challenge does Romer suggest now faces all industrialised countries?

Hints:

• Demonstrate your knowledge and understanding of the meaning of economic growth.

• Your text book highlights a number of theoretical models that are set to explain the sources of economic growth and the role of government in minimising the surprised demand and supply shocks and encouraging growth.

• Your essay would benefit from relevant graphical illustration of the impact of economic growth in production of goods and services and hence employment.

General Guidelines

Both essaysrequire you to demonstrate factual knowledge and analytical skills in evaluation as well as correct referencing throughout the paper. Ensure that your diagrams are fully and clearly labelled and appropriately discussed.

In assessment of the essay points that will be credited include:

• ability to answer the question
• understanding the key issues
• evidence of research/reading
• effective use of English
• clarity of expression
• appropriate referencing of source material and a reference section
• use of suitable diagrams, mathematical equations, statistical data, where relevant
• size 12 Arial font, 1½ line spacing, page numbering, enough margins on the sides