INSTRUCTION: Answer ONLY FOUR (4) Questions in A-4 size paper. 1. a) Use a downward-sloping demand curve to explain a change in quantity demanded. (5 marks) b) Use a diagram to show how each of the following events affects the equilibrium quantity and price of cakes: i. the cost of ingredients of cakes falls. (4 marks) ii. households tend to prefer buns to cakes. (4 marks) iii. cakes is assumed a normal good
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Elasticity- The measure of sensitivity of quantity supplied to changes in price. Demand Elasticity- The measure of responsiveness of the consumers to the changes in price. Classification of Demand Elasticity 1.Elastic Demand- when the quantity demanded is greatly affected by the changes in price. 2.Inelastic Demand- the quantity demanded increase in price creates a lesser change in the percentage in quantity demanded. 3.Unitary Demand- when there is an
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including Oldsmobile‚ Cadillac‚ and Oakland‚ today known as Pontiac" (General Motors‚ 2012). In this paper GM ’s income statement will be reviewed to figure out the following calculations: the number of cars sold each quarter‚ the elasticities‚ marginal cost‚ variable cost‚ and fixed costs. After figuring out these calculations‚ there will be a clear answer to what the future options are for General Motors if they decide to expand. Using the revenue figures from the income statement and the prices
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Dylan’s utility. b) Raise Dylan’s utility. c) Leave Dylan’s utility unchanged. d) Not lower Dylan’s utility. MC3. Suppose Ellen spends all her income on books and food. Following an increase in the price of books (with income fixed)‚ Ellen consumes fewer books and less food. From this‚ we can infer that: a) Books are normal goods‚ to Ellen. b) Books are inferior goods‚ to Ellen. c) Food is a normal good‚ to Ellen. Because the substitution effect saya it would rise d) Food is an inferior
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and its environment as well as ridding the marketplace of overconsumption and inefficiency. As proven throughout the world‚ this tax could bring the Australian plastic bag marketplace back into equilibrium at maximum efficiency‚ where marginal benefit equals marginal
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11. Using the expenditure approach‚ which of the following would be included in U.S. GDP? a. The value of the groceries you buy at the store. b. The value of an automobile purchased by Hertz to be rented out later to customers. c. The value of steel that was produced but not sold during the year. d. All of the above. e. None of the above. 12. Which of the following would be considered "government purchases" when measuring GDP? a. The salary of a city police officer. b. U.S. government social
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1 Module 1 Introduction Unit Structure : 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Objectives Distinction between Microeconomics and Macroeconomics Circular flow of Economic activities Gross National Product (GNP) Net National Product (NNP) Personal Income Disposable Income Summary Questions 1.0 OBJECTIVES 1. To study the distinction between Microeconomics and Macroeconomics 2. To study the Circular Flow of Economic Activities 3. To understand the concept of Gross National Product (GNP) 4. To understand
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PART TWO Producers‚ Consumers‚ and Competitive Markets Chapter 3 Consumer Behavior Teaching Notes Now we step back from supply and demand analysis to gain a deeper understanding of what lies behind the supply and demand curves. It will help students understand where the course is heading if you explain that this chapter builds the foundation for deriving demand curves in Chapter 4‚ and that you will do the same for supply curves later in the course (beginning in Chapter 6). It
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responsible enough to vote‚ certainly they could drink alcohol. Because not all states reduced their minimum drinking ages to eighteen‚ oftentimes young teenagers would travel across state borders known as “blood borders” to obtain alcohol and consume it in a more permissive state and then drive fully intoxicated back to their state of origin. Inebriated teenagers would have to drive long distances to return home‚ which provided more chances for accidents to occur along their journey. As a result
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Balanced versus Unbalanced Growth: Nature and Limitations. (68) Define the terms in question‚ consider the underlying economic logic of each approach‚ and identify the major criticisms of either. Can a case be made for a strategy based on one rather than the other? After the Second World War‚ theorists began to analyse how less economically developed regions could become more developed. The most notable original theories of development were of balanced and unbalanced growth. These strategies posited
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