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Assignment for Sec-7 and Sec-8

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54 views2 pages

Assignment for Sec-7 and Sec-8

Uploaded by

mikiyassyume60
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Hawassa University

College Of Business And Economics


Department of Economics

Group Assignment-1 for first years SS : Section-7 & 8 ; Semester-I; A/C YEAR: 2024/2025

Course Title : Introduction to Economics ;Course Code: Econ 1011 Credit Hours: 3

Instructor : Berhanu Getinet(Ass.Professor)

Submission deadline : 25 December 2024

Instruction: Attempt all the questions and explain your answers correctly

1.Given the following table;

Types of Types of
products products Production
Unit Unit Alternatives
A B C D E
Cloth Metric yarn 600 520 420 280 0
Food Metric tone 0 600 1100 1600 2100

a) Draw the graph of PPF Curve


b). Explain the three important concepts that can be explained by PPF Curve.
c). Calculate opportunity cost of producing food in terms of cloth between all production
alternatives: A& B, B&C, C&D, D & E. Interpret all your results.
d). By illustrating PPF curve , briefly explain the conditions that lead to outward(right) shift of
PPF curve
2. What are economic systems? Explain how the three economic questions get answer in each
economic system.
3.Draw the circular flow diagram for two and three sector economies and briefly discuss the
role of each agent in resource or factor market.
4.Given the following demand and supply schedules in a table ;
price demand supply
60 22 14
80 20 16
100 18 18
120 16 20
140 14 22

a) Calculate the price elasticity of demand when the price is 80birr.


b) Calculate the price elasticity of supply when the price is 120 birr.

1
c) Suppose the government sets a price ceiling of 60 Birr. What will be the market condition?
d) Suppose the government sets a price ceiling of 120 Birr. What will be the market condition?
5. Given the following demand and supply equations;
Market demand: Qd=200-4p; market supply: p=(Qs/4)+20
a) Find the equilibrium price and equilibrium quantity
b) What will be the market condition at price 30 birr.
c) What will be the market condition at price 40 birr

6.Given the following table for income levels and quantity demanded of a commodity per
month;
Income Quantity demanded per month(Qd/month)
6,000 25
10,000 30
15,000 35
20,000 40
25,000 45

a) Calculate income elasticity of demand, if income increases from Br.6, 000 to Br.10,000 and
if income increases from Br.40, 000 to Br. 45,000.
b) Is this a normal or an inferior or a luxury good? Justify.
c) Does the proportion of household income spent on this good increase or decrease as income
increases? .Why?
7. When price of tea in local café rises from Br. 50 to 60 per cup, demand for coffee rises
from 10000 cups to 20000 cups a day despite no change in coffee prices.
a) Determine cross price elasticity.
b) Based on the result, what kind of relation exists between the two goods?
8. Given market demand for good Y is Qd = 100 -2/3 P, and market supply P = 4Qs + 200
a) Find the market equilibrium price and quantity?
b) What would be the state of the market(surplus or shortage) if market price is fixed at Birr 120
and Birr 136 per unit ?
c) Calculate and interpret price elasticity of demand at the equilibrium point.
d) Calculate and interpret price elasticity of supply at the equilibrium point.
9. Explain in detail the effects of combined changes in demand and supply sides of a market for a
given commodity on equilibrium price and quantity in a market (here use graphs to show the
effects).

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