QUESTION
1 (CLO 1):
(4
marks)
(4
marks)
(2 marks)
PART 2
OBJECTIVE:
The
main objective of this part of the assignment is to develop the students’
ability to discuss important economics concepts pertaining to supply and
demand, as well as to utilise the concept of elasticity in business management.
REQUIREMENT:
QUESTION
2 (CLO 2)
(5
marks)
Demand equation: Qd = 100 – 20P
Supply equation: Qs = 130 + 2P
Calculate
the equilibrium price (P) and quantity (Q) of kittens. Remember that a negative
price of kittens is not allowed. How many kittens will be adopted by humans and
how many will be “strays?”
(5 marks)
[Total: 20 marks]
PART 3
OBJECTIVE:
The main objective of this part of the assignment
is to develop the students’ ability to discuss important economics concepts
pertaining to the theory of the firm, with a focus on the production function as
well as to determine the stages of production.
REQUIREMENT:
QUESTION
3 (CLO2)
i.
Complete the following table, where X is the
input for the product of output Q.
X |
TPX (=Q) |
MPX |
APX |
0 |
0 |
|
|
1 |
3 |
|
|
2 |
6 |
|
|
3 |
16 |
|
|
4 |
29 |
|
|
5 |
43 |
|
|
6 |
55 |
|
|
7 |
58 |
|
|
8 |
60 |
|
|
9 |
59 |
|
|
10 |
56 |
|
|
(3 marks)
ii.
Plot the (i) total
product, (ii) marginal product, and (iii) average product functions. (Note:
Some relationships on the following graph may not appear exactly correct
because the graph plots discrete, not continuous values. With smaller discrete intervals these
problems disappear. You may want to try this.)
(3 marks)
iii.
Determine the
boundaries of the three stages of production.
(2
marks)
iv.
Explain the law of
diminishing marginal returns. Based on the answers above, show the occurrence
of the law of diminishing marginal returns.
(2
marks)
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