principal Economic 101

 only 2 Qs see please first 

Question 1

a. Explain the concept of Equilibrium Price in a perfectly Competitive Market and how it is determined? [2 Marks]

b. Calculate the percentage change in equilibrium price if percentage change in quantity demanded is 25%. Price Elasticity of Demand is 1.35 and Price Elasticity of Supply is 1.15. [1 Mark]

Question 2

Calculate the Total Variable Cost, Average Fixed Cost, Average Variable Cost, Average total Cost and Marginal Cost in the table given below (All Cost are given in USD). [2 Marks]

  

Labor   (No of workers)

Output   (Number of units)

Total   Fixed Cost

Total   Variable Cost

Total   Cost

Average   Fixed Cost

Average   Variable Cost

Average   total Cost

MC

 

0

0

150

0

 

1

1

150

100

 

2

5

150

25

 

3

8

150

37.5

 

4

10

150

55

 

5

11

150

650