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ECO404 Managerial Economics GDB Solution Fall 2013

GDB:

An article is given in the following link. Read this article carefully and answer whether Pakistan should export such a big quantity of Molasses to other countries or should use it domestically for employment generation, industrial growth enhancement and for the solution of energy crisis. Discuss with logics.

http://epaper.dawn.com/DetailNews.php?StoryText=20_01_2014_604_004

Solution:Pakistan should export such a big quantity of Molasses to other countries or should use it domestically for employment generation, industrial growth enhancement and for the solution of energy crisis.

1. Pakistan generates $292 million export revenue from the export of ethanol.

2. Most of the ethanol is exported to Europe, Far East and Middle East countries.

3. 1.5 gallon of ethanol is equal to 1 gallon of gasoline.

4. About 1/5 of ethanol can be produced from a given quantity of molasses.

So in my view Pakistan should use its produced amount of molasses for the industrial growth which will increase employment and help in reducing poverty. However this is not possible without the help and intervention of government. As govt must take fruitful steps in establishing these industries on public sector or encourage and promote its production and supervise and finance the private sector to invest here.

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