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    Economics Assignment

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    yohannes18addisu

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    © All Rights Reserved
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    Economics Assignment

    Uploaded by

    yohannes18addisu
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    ECONOMICS ASSIGNMENT

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    © © All Rights Reserved

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    5 views4 pages

    Economics Assignment

    Uploaded by

    yohannes18addisu

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 4

    ADDIS ABABA INSTITUTE OF TECHNOLOGY

    Economics assignment

    Name: Yohannes Addisu

    Section: 16

    Id number: UGR/7521/15

    SUBMISSION DATE:12/12/2023

    SUBMITTED TO:TEMESGEN AREGAY


    Assignment

    Part One

    1. Convex Production Possibility Curve indicates that


    a) Constant opportunity cost
    b) Decreasing opportunity cost
    c) Increasing opportunity cost
    d) All are answers
    2. The reason we study economics is
    a) Because of resource scarcity
    b) Because of Supply is greater than Demand
    c) Because of facing difficulty in decision making
    d) All are answers
    3. Which one is true
    a) Production possibility curve is concave because of specialization
    b) Normative economics deals with what is
    c) Free resources and scarce resources are the same concept
    d) Command economy and mixed economic system are similar concepts
    4. Assume that car and fuel are complementary each other. If the price of car
    decreases, then
    a) The quantity demanded for car increases
    b) The demand curve for car shifts leftward
    c) The quantity demanded of fuel increases
    d) The demand curve for fuel shifts downward
    5. Suppose that when the price of Ethiopian coffee increasing from $2 to $3 per kilo,
    the quantity demanded falls from 800 Kilo per day to 700 kilo per day. Over this
    range, the demand for coffee is
    a) Elastic
    b) Unitary elastic
    c) Perfectly elastic
    d) Inelastic
    6. Belay consumes two goods, potatoes and pineapples. When Belay income
    decreases, he buys more pineapple and les potato. Which of the following is
    correct?
    a) Pineapple and potato is substitutes.
    b) Pineapple is an inferior good.
    c) Potato is an inferior good.
    d) pineapple and potatoes are complementary
    7. If the demand curve is a horizontal line, then
    a) Demand is perfectly elastic
    b) Demand is perfectly inelastic
    c) Demand is unit elastic
    d) Demand is elastic
    e)
    8. If two goods are substitute, then
    a) The cross-price elasticity of demand will be negative
    b) The cross-price elasticity of demand will be zero
    c) The cross-price elasticity of demand will be positive
    d) An increase in the price of one good will decrease the demand for the other
    9. If consumer income increase, then the demand for
    a) Normal goods will increase
    b) Inferior goods will increase
    c) Substitute goods will increase
    d) Complementary goods will increase
    10. If demand is price elastic, a decrease in price
    a) Raises total revenue to the seller
    b) Raises total expenditure on the good, but not total revenue to the seller
    c) Reduces total revenue to the seller
    d) Leaves total revenue to the seller unchanged

    Part two

    1. Given the following hypothetical data

    Production Possibility Schedule


    Option Butter Gun
    A 0 20
    B 2 18
    C 5 14
    D 9 6
    E 10 0

    a) Draw the PPF using Butter in Y-axis and Gun in X-axis


    b) What look like the shape of the PPF and what indicates the shape of the PPF
    c) Find the opportunity cost of Gun when producer move from B to C
    d) Find the opportunity cost of Butter when producer move from D to C
    e) Can we produce outside the PPF explain
    f) Can we produce inside the PPF explain
    2. Given the following hypothetical data on Ethiopian wheat

    Table 2.7 Demand and Supply Schedule


    Price ( in Birr) Quantity Demanded Quantity Supplied
    2 10 6

    3 8 8

    4 6 10

    5 4 12

    a. Estimate demand and supply equation?


    b. Fined equilibrium price and output
    c. graph your result
    d. If government decided price below equilibrium price what is the consequence
    e. If government decided price above equilibrium price what is the consequence

    3. Suppose market demand for movie tickets (in millions per year) is given by the
    equation QD=19-2P, while tickets are supplied according to the market supply
    equation QS=P+2.
    a) Solve for the equilibrium price and quantity. Graph your results.
    b) Find consumer surplus and producer surplus
    c) Calculate excess supply and shortage at price 6 and 4 respectively
    e) Calculate the elasticity of demand and supply at equilibrium price and
    output

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