Economics is the social science that analyzes the production, distribution, and consumption of goods and services.

Sunday 4 March 2012

Exercise micro chapter 2: Demand and Supply

Exercise Chapter 2 : Demand and Supply

 1.                  The following table shows the demand and supply schedule for computers.


Price (RM)
Quantity Demanded (units)
Quantity Supplied (units)
7000
2000
14000
6000
6000
12000
5000
10000
10000
4000
14000
8000
3000
18000
6000


a.                  What is the meaning of equilibrium price?

b.                  What are the equilibrium and quantity of computers based on the above table?

c.                   Based on the above figure, plot the demand and supply curve in the same graph paper.



2.                  The following schedules show the demand and supply for a product.

Price
Consumer X
Consumer Y
Consumer Z
Producer A
Producer B
Producer C
10
40
40
60
20
20
20
20
35
35
50
25
30
25
30
30
30
40
30
40
30
40
25
25
30
35
50
35
50
20
20
20
40
60
40
60
15
15
10
45
70
45

a.                  Calculate the market demand and supply

b.                  Plot the market demand curve and market supply curve on the same graph paper

c.                   Determine the market equilibrium price and quantity

d.                  At the price of RM40, state whether there is a surplus or shortage.  How much is the surplus or shortage.

e.                  Based on the market demand and market supply, find the value of demand elasticity if the price increases from RM20 to RM40.

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