EC1002 - Assignment 1 3. Answer this question using the same graph in Question 2 above. Suppose that A Graph A concern over dietary habits has led the government to impose a restriction that limits B) Graph B Section A-Multiple Choice Questions (2 marks each; total 20 marks). Please insert your suppliers to produce no more than 40 pizzas. What will the price of pizza be as a result Graph C answer into time table at the end of this section. of this quota? Dj None of the above A) $2 1. Consider the demand fimctions: B) $ 5. Suppose the demand for coffee can be reprevented by a limear demand curve. At the C) $10 current market price, the income elasticity of demand for coffee is 2 When income Consumer A: 0. =250 - 2P rises, the demand curve for coffee Consumer B: Q. =300 - 3P A) becomes less elastic at the price that prevailed before the change in income Which of the demand functions reflect a higher level of consumer income? What is the total market supply. Qs, for luxury sports cars in the UAE if the only three ) becomes less elastic at every price suppliers' inverse supply functions are ") becomes more elastic at every price j becomes more elastic at the price that prevailed before the change in income B P=-10+50-1. C) A and B reflect the same consumer incomes. P =20 + 5052 D) More information is needed P = 503% 7. The market demand for wheat is Q = 100 - 2p + 1P), where P. is the price of barley. If the price of wheat is $2, the price elasticity of demand_ A) P=-2+(30:/5) 2. The figure below shows a graph of the market for pizzas in a large town. No pizzas B) P= 10+ 150: Al equals (-1) will be demanded unless price is less than_ 9 Q: =6+ (P/15) B) equals (-4/46) D) (: =-10+ (P/ 15) equals (-45) Dj cannot be calculated without more information 5. The above figure shows three different supply-and-demand graphs. Which graph best represents the market for vacations on Mare? B. The market demand for wheat is Q = 100-2P, + 1P + 2Y. If the price of wheat, P.. is $2, and the price of barley, Pr, is $3, and income, Y, is $1000; the income elasticity of wheat is S 8) 2 x (1000/2099) 12 x (1000/2099) Dj Cannot be calculated from the information provided. D KL Suppose the inverse demand curve for a good is expressed as Q = 50-2P. If the good 40 6070 140 currently sells for $3, then the price elasticity of demand is _ A -2 x (503) -3 x (250) 5-2 x (3 44) 0-3 x (442) Grain C Page 7 Page 1 2 7 Page 1 3 10. If two indifference curves were to intersect at a point, this would violate the assumption all question woche market demand for now A) transitivity B) completeness C) Both A and B above. D) None of the above