project Questions5.docx - ECO1003 \u2013 MICROECONOMICS CASE STUDY QUESTIONS Each group should write draw their answers on the blank paper provided and

project Questions5.docx - ECO1003 u2013 MICROECONOMICS...

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ECO1003 – MICROECONOMICS CASE STUDY QUESTIONS Each group should write / draw their answers on the blank paper provided and submit the answers stapled into one bundle at the end of the exam. 1. Identify the determinants of demand on cars in this case study and state whether they are shifting demand left or right. (3 determinants). Show the effect on the car market using a labelled graph. (6 marks for correct shifts 3x 2) 2. The Motor Transport Authority (MTA) expects that new car sales will decrease from 48,500 cars in December to 46,950 cars in January due to 5% Value Added Tax (VAT) in 2018, which will be completely passed on to consumers. Calculate PED, state whether it is elastic or inelastic, and, state what manufacturers and dealers should do

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