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7. A 10 percent decrease in the price of a Pepsi decreases the demand for a
Coca-Cola by 50 percent. Find out the cross elasticity of demand between
Pepsi and Coca-Cola.
When the price of Apricot was Rs. 100 per kg, 200kgs of Apricot were
demanded in Delhi market per day. Now the Apricot price has increased to
Rs. 110 per kg as a result of which the quantity demanded reduced to 160
kg per day. Calculate the price elasticity of demand by using the mid - point
method.
5. Assume that product A is a normal good and product B is an inferior
good. If the income of the consumer increases, graphically analyse its effect
on demand for good A and B.
3. Suppose fidget spinner market is in equilibrium. If the price of ball
bearing falls and all other variables are held constant, what would you
expect for the new price and quantity of fidget spinner?
Given two commodities A and B, where price of A is ₦50 and the price of B is ₦60. If the consumer’s income is ₦1200 and the utility function U = AB, Find: i. the equilibrium values of the two commodities. ii. Mention four properties of the demand function derived in (i) above
Evaluate, with the use of an appropriate diagram (s), whether fiscal policy will always reduce a negative output gap. (25 marks)
The consumption function is C=250 +0.75Y) - 400r, and the investment function is given by I=1300 - 100r. Here Yo is disposable income and r is the real interest rate. Net taxes are T=1000. Government spending is G=1450. The economy is in the long run where real GDP is Y = 5000.
(A) Give a real-life example of a transaction that would count towards investment I.
(B) Derive the total savings function S.
(C) Find the equilibrium on the loanable funds market: find , S, and I at equilibrium
(D) The new president is concerned about the current budget deficit, and she orders to adjust G in such a way that the budget becomes balanced. Find the new equilibrium: find r. S. and I at the new equilibrium
The time it takes for something to double is approximately equal to, divided by the growth rate
Explain what is meant by national income equilibrium and how it may change
Suppose the market demand and supply function for cookies per day in Puri city is given as Qd = 20-2P and Qs = - 8+2P, where Qd, Qs and P refers to quantity demanded, quantity supplied and price respectively. Draw the demand and supply graph and show the market equilibrium price and quantity. Analyse the market situation if the actual price of cookies is Rs. 10 per unit by drawing a well labeled graph.
