BBM102_TMA2_revised - Semester 1 6WVQT 2 7XWRU 3 Section...

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Unformatted text preview: Semester 1 6WVQT 2 7XWRU 3 Section A (60 marks) Quantitative Questions Answer ALL the questions. Question 1 (a) Sup p ly A B C 2 5 5 0 7 5 1 0 0 1 2 5 1 5 0 1 7 5 2 0 0 2 2 5 2 5 0 2 7 5 3 0 0 Q u a n tity 2 4 6 8 P r ice (i) Using the midpoint method, what is the price elasticity of supply between point A and point B? [3] (ii) Using the midpoint method, what is the price elasticity of supply between point B and point C? [3] 4 (iii) If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from RM6 to RM8, then sellers’ total revenue would__________. [3] (b) Supply Curve A Supply Curve B Supply Curve C Price RM1.00 RM2.00 RM1.00 RM3.00 RM2.00 RM5.00 Quantity Supplied 500 600 600 900 400 700 (i) Which of the three supply curves represents the least elastic supply? [4] (ii) Which of the three supply curves represents the most elastic supply? [2] Question 2 (a) Price Quantity Demanded Quantity Supplied RM0 12 0 RM1 10 2 RM2 8 4 RM3 6 6 RM4 4 8 RM5 2 10 RM6 0 12 (i) What is the equilibrium price and quantity for this market? [3] (ii) Suppose the government imposes a price ceiling of RM1 on this market. What will happen in this market?...
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This note was uploaded on 02/15/2011 for the course FIN 355 taught by Professor Tang during the Spring '10 term at Aachen University of Applied Sciences.

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BBM102_TMA2_revised - Semester 1 6WVQT 2 7XWRU 3 Section...

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