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Show the decomposition of the price effect into the income and substitution effect for a price fall for an inferior good.
Explain and illustrate the impact of a minimum wage on the labour market. When is a minimum wage effective? What kind of price control is it?
Explain how the income effect influences food purchases and provide some examples of the income effect that might occur when the price of food rises, and other things remain the same
Ghana is well noted for cocoa production. With the use of a diagram, explain how a technological advancement in cocoa production can affect supply of cocoa.
In short, what is the difference between absolute advantage theory and comparative advantage theory?
Write 3 arguments in favor of free trade and 2 against free trade. Make sure you support and justify your arguments. (2 points for each argument)
Write at least 3 main differences in the assumptions of the classical models (absolute advantage and comparative advantage) of trade and the neo-classical model (HO) model.
If according to the HO model country 1 is advised to specialize and export Capital-intensive products and country 2 is advised to specialize and export labor-intensive products, then what can you say about the existing wages in both countries right now?
The demand and supply functions for a good is given as Q = 30 - 2p and Q = 20 + 2p. What will be the equilibrium quantity?
Demand is the quantity of goods:
desired by consumers.
ordered by consumers in a particular period.
consumers are willing and able to buy at particular prices in a certain period.
that consumers require in order to survive.
