Question No 04:

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Smart car? Write down the mechanism and also plot the graphs for each case if necessary.

a. The price of small automobiles substantially drops.

b. Big automobiles become less fashionable

c. The price of small automobiles rises (with the price of big autos remaining the same).

d. Income increases and small autos are normal good.

e. Consumers anticipate that the price of small autos will not change in the near future.

Q1: how the covid-19 pandemic has affected consumer spending? Briefly explain your perspective. answer should be logical.

Q3:Solve the numerical step-wise The price elasticity of demand for chicken is estimated to be -0.45. If the price of chicken Increased by 08 percent, what will be the expected percentage decrease in the quantity of chicken sold.

Q2:Assume you won $ 30 on a lottery ticket and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $0.75 and price of peanuts is $1.50. a. Construct a table showing the alternative combinations of the two products that are available. b. Plot the data in your table as a budget line in a graph. What is the slope of the budget line? What is the opportunity cost of one more candy bar? Of one more bag of peanuts? Do these opportunity cost rise, fall or remain constant as each additional unit of the product is purchased? c. Does the Indifference curve tell you which of the available combinations of candy bars and bags of peanuts to buy? Explain it logically. d. Suppose that you had won $60 on your ticket, not $30 show the $ 30 budget line in your diagram. Has the number of available combinations increased or decreased? Explain it.