Explain the concept of human capital within the context of the Malaysian environment

What is the new equilibrium price and quantity now

 

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Part A

Answer ALL the questions in this section.

Question 1

The market for oranges has the following supply and demand schedule.

Price (RM) Quantity demanded (units) Quantity supplied (units)
2 24 14
3 22 17
4 20 20
5 18 23
6 16 26
7 14 29

 

(a) What is the equilibrium price and quantity?

(b) Calculate the revenue at equilibrium.

(c) Due to a heat wave, the demand for oranges increased by 5 units per ringgit.

(i) Calculate the new quantity demanded.

(ii) What is the new equilibrium price and quantity now?

(d) Calculate the new revenue. Did it increase or decrease?

 

Question 2

The table below shows demand and supply schedule for apples:

Price (RM) Market Demand (units) Market Supply (units)
5 60 20
10 50 30
15 40 40
20 30 50

 

(a) What is the equilibrium price and quantity?

(b) Suppose that the scientific community has proven that apples can cause cancer. This has caused demand to decrease by 20 units at each price level.

(i) Calculate the new demand.

(ii) What is the new equilibrium price and quantity?

(c) Draw a demand and supply diagram to show the initial condition of the market and the changes in question (b).

 

Question 3

For each of the following statement, calculate the elasticity coefficients and explain the meaning. State the relationship between the two goods mentioned.

(a) When the price of tea increases from RM1.50 to RM1.80 per cup, the quantity demanded for sugar will decrease from 50 units to 20 units.

(b) When price of tea decreases from RM1.80 to RM 1.50 per cup, the quantity demanded for coffee will decrease from 30 to 20 cups.

 

Part B

Answer ALL the questions in this section.

Question 1

(a) Differentiate between positive and normative statements.

(b) Using appropriate examples, evaluate the two types of statements above.

 

Question 2

(a) What is labour?

(b) Explain the concept of human capital within the context of the Malaysian environment.

 

Question 3

A simultaneous decrease in demand and increase in supply will result in a decrease in equilibrium price and uncertain effect on quantity. Using appropriate diagrams, elaborate on the statement above.

 

Question 4

Video games and video game players are complements. Suppose that technological advances lower the price of a video game player. What do you expect to happen to the equilibrium price and quantity of video games? Explain your answer using both words and a diagram. Your explanation must include both the markets for video games and video game players.

 

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