1. State whether each of the following statements concerns ‘Micro’ or ‘Macro’
a) Toyata had increased the production of a new hybrid car since May 2009
b) The number of workers in a cement industry has increased tremendously over the last five years.
c) China’s unemployment rate had decreased since the implementation of an economy.
d) Meat prices have increased as a result of a higher tariff rate.
e) The demand for cars is anticipated to rise ever since the government raised the income of civil servants.
f) In 2009, Malaysia’s inflation rate was 2.9%.
g) The import of rice from Thailand and Vietnam has increased in tandem with domestic consumption.
2. State whether each of the following statements is a positive or normative statement.
a) When the consumer income increases, food consumption at fast food restaurants also increases.
b) The government should lower the driving speed in school zones to reduce aaccidents.
c) An increase in interest rates will discourage investments.
d) Protectionism policies on imported goods are necessary for all countries and should be practiced.
e) Low-income groups should pay lower taxes compared to high-income groups.
3. When the price per carton of Cola Cola falls from RM16 to RM14, the quantity demanded increases from 200 to 300 cartons per month. On the other hand, the demand for Pepsi falls from 250 to 200 cartons per month.
a) Calculate the price elasticity of demand using the midpoint formula
b) If the price of Cola Cola increases, what will happen to the total revenue of Cola Cola. Explain.
c) Calculate the cross elasticity of demand between Cola Cola and Pepsi. Based on the answer, explain the relationship between the two
4. The following table shows the demand and supply schedule for coconuts.
PRICE (RM/ton)
|
Quantity demaded (tons)
|
Quantity supplied (tons)
|
12
|
8
|
21
|
11
|
12
|
19
|
10
|
16
|
16
|
9
|
20
|
13
|
8
|
24
|
10
|
7
|
28
|
7
|
6
|
32
|
4
|
5
|
36
|
0
|
a) Using graph paper, draw the market demand and supply curves for the coconuts.
b) What are the equilibrium price and equilibrium quantity if the coconuts?
c) If the price of the coconuts is RM8, there will be _________ of _________ tons.
d) If the price of the coconuts is RM12, there will be _________ of _________ tons.
e) Calculate the price elasticity of supply when the price of the coconuts increases from RM6 to RM8 per ton. Is supply elastic or inelastic at this price range?