Question
Topic : Demand and Supply 1.When the price per carton of Coca Cola falls from RM16 to RM14, the quantity demanded increases from 200 to
Topic : Demand and Supply
1.When the price per carton of Coca Cola falls from RM16 to RM14, the quantity demanded increases from 200 to 300 cartons per month. On the other hand, the demand for Pepsi falls from 250 to 200 cartons per month.
(i)Calculate the price elasticity of demand using the midpoint formula.
(ii)If the price of Coca Cola increases, what will happen to the total revenue of Coca Cola? Explain.
(iii)Calculate the cross elasticity of demand between Coca Cola and Pepsi. Based on the answer, explain the relationship between the two.
2.The following table shows the market for butter. For each situation, tick (v) the column which indicates the changes in demand (shift to the right or left) or movement along the demand curve (extension or contraction).
Situations
Shift to right
Shift to left
Contraction
Extension
Consumers prefer margarine to butter for toast.
The average income of consumers increases.
The price of butter decreases.
In a health magazine, butter is categorized as an unhealthy good.
Recent news reports state that the price of butter increased by 10%.
Topic : Theory of Production pg5
1.The following table shows the product schedules for X company.
Labour
Land
Average Product
Marginal Product
Total Product
1
5
15
2
5
50
3
5
36
101
4
5
31.3
5
5
140
6
5
9
7
5
143
(a)Complete the table above.
(b)Sketch the Total Product, Average Product and Marginal Product curves in a graph. Indicate the stages of production.
(c)State total product is maximized by which worker.
(d)At which stage of production will a rational producer choose to produce? State the range of workers.
2.The following table shows the relationship between Total Product of Good X and the number of workers employed.
Land
50
50
50
50
50
50
50
50
50
50
Capital
10
10
10
10
10
10
10
10
10
10
Labour
0
1
2
3
4
5
6
7
8
9
Total Product
Average Product
Marginal Product
-
10
16
15
11
8
5
2
0
-4
(a)Calculate Total Product and Average Product.
(b)Sketch the Total Product, Average Product and Marginal Product curves in a graph. Indicate the stages of production.
(c)State beyond which worker when the diminishing returns set in.
(d)Which stage of production will a rational producer choose? Why?
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
