Question

Handwrite in text plz not in pic since its hard to read from and plz dont copy answers that were answered before.

1. Imagine that the leaders of a poor nation with a centrally planned economy become willing to try a different economic system, and hire an economist from a rich, market economy nation to advise them. The economist recommends a switch to a market economy. What will the economist suggest the leaders order their citizens to do?

2. Only one thing can cause movement along a product’s demand curve --- that is, cause a change in quantity demanded for that product --- and that’s a change in that product’s price. On the other hand, there are five key variables that can cause a product’s demand curve to shift to the left or right --- that is, lead to a change in demand. Coca-Cola is experiencing shifts in the U.S. demand curve for its famous cola soft drink, as the huge post-World War II “Baby Boom” generation has aged beyond their prime soft drink consumption years, and as the smaller generations behind the Baby Boomers have been buying relatively more energy drinks, water, juice, and tea, and relatively less soda than previous generations. What two key variables are affecting demand for Coca-Cola in the U.S., and in which direction are these variables shifting the demand curve for Coke?

Write as much as you can!

Answer 1

1. An economist who suggests marketbased economy from centrally planned economy will naturally suggest decentralised power in decisions making and allowing market forces to determine supply and demand and subsequently adopt deregulation of all sectors. He wpuld recommend profit maximizing for consumers, private owned assets rather than publicly owned and perfect capitalism in economy.
2. Coca-Cola demand has seen gradual decrease as baby boomers and Generation Z has now looked for Energy drinks and sports drinks which are less calorific in consumption. The second biggest concern is hypercompetition from brands like Pepsi and pulp juice makers which has offered greater differentiation with low cost products and heavy discounting. The demand curve hence shifts leftwards owing to subdued consumption.