\fQUESTION 1 Due to urbanisation the demand houses in Klang area surge tremendously. With there situation there is less increase in the supply of houses, analyze the housing price with the guide of curves. Suggested answer: .;. In the diagram the supply curve will be inelastic and demnad curve will be elastic. so Demand curve will shift to right. Show the changes in price and quantity QUESTION 2 Based on question 1, what would be effect of housing price in short run and long run in the event the demand is keep on in increase. Suggested answer: 6* Short run - supply curve inelastic (reason) and demand curve elastic - DD curve shift to right. Show the changes in price a. Long run - supply curve elastic (reason) and demand curve elastic - DD curve shift to right. Show the changes in price QUESTION 3 Government Intervention in Markets: 1. Explain about free market - need curve - draw DD and SS curve. Do explanation. QUESTION 3 XYZ is a small firm producing buttons. It is seeking profit maximization. At the prevailing market price, say RM 12 per box it can sell as many buttons as it produces. It has, however, a limited capacity of a single manufacturing plant. It is operating at full capacity on all working days, expect Sundays. If it has to work on Sunday, the firm has to pay overtime (double) wage rates to the workers. As such, the marginal costs of production on weekdays remain constant, but tend to be higher on Sundays. QUESTION 3 Suppose, the firm gets a contract from 'Big Boss\" garment producing firm to supply the buttons with its brand name and ready to pay RM18 per box for weekly order of 1000 boxes. The firm's full capacity daily output is 1000 boxes, which it can sell at RM12 per box in the market. The firm's weekly fixed costs amount to RM1000 (rent + interest + insurance). Variable costs is RIVI'IO per box (raw materials RM5 + labour cost RM5). Assuming no cost difference between ordinary and brand name imposed buttons: QUESTION Examine the output determination by the firm and justify whether it should produce more by working on Sundays.DAY OUTPUT PRICE (RM) TOTAL TOTAL REVENUE VARABLE COST MON TUES WED THURS FRI SAT WEEKLY TOTAL# with brand-name Profit if work on normal days: Total Cost = TFC + TVC Profit = TR - TC Profit if work 7 days (including Sunday) * the variable cost for Sunday will be different. * compare the profit if work on 6 days and 7 days. Do your conclusionCASE STUDY TIPS 1. Explain about economies of scale and diseconomies of scale with the guide of curve. 2. Based on the case study identify whether the firm is at economies of scale or diseconomies of scale 3. Analyze the reasons for diseconomies of sclae