Economics Assignment 1

Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

Economics

Assignment 1

Submit your assignment through SOUL.

Late submission will not be accepted. A zero mark will be given to late submission.

This assignment is to assist students to achieve the module intended learning outcome of “discuss fundamental economic problems and the basic methodology used in economics”; and programme intended learning outcome “communicate ideas in a manner appropriate to the circumstance using written English language in social and academic contexts”.

Marks allocation:

Contents: 70%

Format/Presentation/Clarity of ideas presented/Grammar/Spelling: 30%

The assignment should be typed up; double-spaced with Times New Roman font size 12 or Arial font size 11.

Q1. Bread and cheese are often eaten together. Therefore, they are complements.

Flour is an ingredient in producing bread. Milk is an ingredient in producing cheese.

A. Explain what happens to the equilibrium price and equilibrium quantity of cheese when the price of milk falls. Draw a diagram for your answer. (10 marks)

B. Explain what happens to the equilibrium price and equilibrium quantity of bread as a result of your answer in part A. Draw a diagram for your answer. (10 marks)

Q2. Orange juice and apple juice are substitutes.

Orange is an ingredient in producing orange juice. Apple is an ingredient in producing apple juice.

A. Explain what happens to the equilibrium price and equilibrium quantity of orange juice when the price of oranges rises. Draw a diagram for your answer. (10 marks)

B. Explain what happens to the equilibrium price and equilibrium quantity of apple juice as a result of your answer in part A. Draw a diagram for your answer. (10 marks)

Q3. Peter likes to see movies but he decides that he will spend a fixed amount of $1,000 per month on movie tickets, no matter what the price of per movie ticket is. Is Peter’s price elasticity of demand on movie tickets elastic, unit elastic or inelastic?

Explain your answer. (30 marks)