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# Semester &quot;Spring 2010&quot; &quot;Economics (ECO401)&quot; Assignment No. 01 Marks: 20 Question 01 Suppose a hypothetical economy produces two

A. Draw the demand curve for wheat.
B. Draw the supply curve of wheat.
C. Determine the equilibrium in the wheat market with the help of graphs.
D. If there is an increase in the price of rice, what will be its impact on the market
equilibrium? Show graphically.
E. If government imposes tax on wheat production, what will be its impact on
market equilibrium? Show graphically.
Semester “Spring 2010” “Economics (ECO401)” Assignment No. 01 Marks: 20 Question 01 Suppose a hypothetical economy produces two goods i-e wheat and rice. A. Draw the demand curve for wheat. B. Draw the supply curve of wheat. C. Determine the equilibrium in the wheat market with the help of graphs. D. If there is an increase in the price of rice, what will be its impact on the market equilibrium? Show graphically. E. If government imposes tax on wheat production, what will be its impact on market equilibrium? Show graphically. (Marks: A = 2, B = 2, C = 4, D= 3, E = 3) Important Note: o Just draw graphs in each part by yourself. Do NOT copy from any source. NO need to write irrelevant material or interpretation. o Graphs are very important in Economics course. This assignment will enhance your skill of drawing graphs online. A complete procedure of “How to draw graphs online in MS-Word” is uploaded on announcement page of LMS. Get help from that uploaded file to solve this assignment. Question 02 A. In the above graph, price is plotted on the vertical axis and quantity is plotted on the horizontal axis. From the information given in the graph, calculate price elasticity of demand from point A to B. B. Suppose the price of Pepsi rises by 8%, as a result demand of Coca Cola increases by 11%. Calculate the cross price elasticity of demand for Coca Cola. 0 Price 10 17 5 A B 9 Quantity
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