Question:

1. Distinguish between a demand schedule and a demand curve. Let Q_d = 50 - 5P. Prepare a demand schedule from the equation and draw the underlying demand curve.

2. Graphically explain the distinction between change in quantity demanded and change in demand.

3. Consider the following demand and supply equations:

Q_d = 90 - 6P

Q_s = -10 + 4P

Find the equilibrium price and quantity. Suppose the government imposes a tax of $ 2 on the buyer for each unit of the product purchased. What is the new equilibrium price and quantity? How is the tax shared by the producer and the consumer?

4. Let Q₁ = 60 - 4P₁ + 3P₂

Where

Q₁ = demand for Product 1

P₁ = price of Product 1

P₂ = price of Product 2

Calculate E_P1 and E₁₂ when P₁ = 6 and P₂ = 5, and interpret the values.

5. Let Q_d = 60 - 8P. Prepare a demand schedule from the equation and draw the underlying demand curve.

6. Graphically explain the distinction between change in quantity demanded and change in demand.

7. Suppose the world tea market is in equilibrium. Draw an appropriate diagram to show this equilibrium. Suppose Brazil has had a bad harvest of coffee. How will this affect the equilibrium price and quantity of tea in the world market? Show your work graphically.

8. Consider the following demand and supply functions:

Qd = 80 - 5P

Qs = -10 + 3P

Find the equilibrium price and quantity. Suppose the government imposes a tax of Tk. 1 on the buyer for each unit of the product purchased. What is the new equilibrium price and quantity? How is the tax shared by the producer and the consumer?

9. Let Q₁ = 64 - 6P₁ + 3P₂ + 0.25Y

Where

Q₁ = demand for Product 1

P₁ = price of Product 1

P₂ = price of Product 2

Y = income

Calculate E_P1, E₁₂ and E_Y when P₁ = 5, P₂ = 4 and Y = 80. Interpret the elasticity values.

10. Let Q₁ = 100 - 6P₁ + 3P₂ + 0.25Y

Where

Q₁ = demand for Product 1

P₁ = price of Product 1

P₂ = price of Product 2

Y = income

Calculate E_P1, E₁₂ and E_Y when P₁ = 5, P₂ = 6 and Y = 60. Interpret the elasticity values.

11. The price of a product rises from 20 to 25. As a result, the quantity demanded falls from 40 to 32. Calculate price elasticity using the average elasticity formula and interpret the value.Will you recommend that the producer of the product should increase the price in order to increase total revenue? Explain.

12. The price of a product rises from 30 to 45. As a result, the quantity demanded falls from 50 to 40. Calculate price elasticity using the average elasticity formula and interpret the value.Will you recommend that the producer of the product should increase the price in order to increase total revenue? Explain.