1. Explain the following concepts each.

a. Economics

b. Market

c. Opportunity cost

d. Equilibrium

e. Economic growth

f. Unemployment rate

g. Inflation

2. Let's suppose UK and France produce textile and wine per hour.

Textile Wine

UK 4 2

France 1 3

a. For the UK to produce 1 unit of textile, it has an opportunity cost of ( ) wine.

b. For France to produce 1 unit of textiles it has an opportunity cost of ( ) wine.

c. For the UK to produce a wine, the opportunity cost is ( ) textile.

d. And, for France to produce a wine, the opportunity cost is ( ) textile.

e. Therefore ( ) has a comparative advantage in producing textiles because it has a lower opportunity cost.

f. Therefore ( ) has a comparative advantage in producing wine because it has a lower opportunity cost.

3. Explain each of the following statements using "supply-and-demand diagrams".

a. "Since coronavirus hit the world in early 2020, the price of masks has gradually dropped after a year."

b. "After corona pandemic prevailed the world for more than a year, Brent crude oil price is back at pre-pandemic level (over $60 a barrel as of May 2021)."

4. For each of the following pairs of goods, which good would you expect to have more elastic demand and why? Explain them in regards to the pricing strategy of the producer.

a. Champagne or water

b. 30 days pass (19,90) or 1 year pass (149,00) of digital concert hall of Berliner Philharmoniker (https://www.digitalconcerthall.com/en/tickets)

Economics

5. The price of cigarettes has increased to around 10 per pack last year in 2020, according to the rise of the tax on it. Please discuss it in terms of market welfare - social cost and benefit. Use the concept of tax revenue and deadweight loss.

(FYI : https://www.francetvinfo.fr/sante/drogue-addictions/lutte-contre-le-tabagisme/paquet-de-cigarette-a-10-euros-qui-touche-quoi_3823105.html

https://www.bfmtv.com/economie/economie-social/en-2020-le-tabac-a-genere-1800-euros-de-taxes-par-fumeur_AV-202104020281.html )

< Technical Questions >

6. A market is described by the following supply and demand curves:

jQuery22403509091409972349_1622566853122 = ? 40

?? =200 ?

a. Solve for the equilibrium price and quantity.

b. Draw the graph of Supply and Demand curves.

c. If the government imposes a price ceiling of 100, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demande, and size of the shortage or surplus?

d. I f the government imposes a price floor of 100, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demande, and size of the shortage or surplus?