# .0001pt;text-align: justify;line-height:150%;tab-stops:40.5pt”>.0001pt; line-height:…

.0001pt;text-align:
justify;line-height:150%;tab-stops:40.5pt”>.0001pt; line-height: 150%;”>Question-1:
Suppose that you have been hired as an Economic Researcher by OPEC and given the following schedule
showing the world demand and supply for oil:(5
marks)

Price (P) (\$/barrel)

Quantity Demanded (Qd)
(millions of barrels/day)

Quantity Supplied (QS)
(millions of barrels/day)

10

60

20

20

50

30

30

40

40

40

30

50

50

20

60

the following questions: a.
At
what price, the oil market will be in equilibrium situation? b.
If
OPEC produces 50 million of barrels/day, calculate its Total Revenue (TR)? c.
If
the price of oil rises from \$40 to \$50 per barrel, what will be the Total
Revenue (TR) from oil sales? Also mention either TR will increase or decrease?d.
When
the price changes from \$30/barrel to \$40/barrel, calculate Price Elasticity of Demand (Ed)?e.
When
the price changes from \$30/barrel to \$40/barrel, calculate Price Elasticity of Supply (Es)?Question-2:Define the Law of
Supply? Keeping in view the Law of Supply, how the following
factors will shift the supply curve?
(Each answer must be supported by a neat diagram):
(2 + 8 = 10 marks) a.
If costs of raw material increases in the plastics industry;b.
If new technology is introduced
in the automobile manufacturing;c.
If OPEC decides to reduce oil
prices in the Gulf Region;d.
If government introduces some
new taxes in the construction sector.Question-3:Define and explain â€˜Law of Diminishing Returnswith the
help of diagram. What are the different stages of production in the short run? (5+5 =10
marks)Question-4:Define and explain â€˜Price Discrimination (PD)â€™with the
help of diagram. Also give examples of Price Discrimination from the real
world? (5+5 = 10
marks)Question-5:
(2+2+2+2+2+2+3 = 15 marks)Suppose the
quantity demanded of good (Qd) depends only on the price of the good
(P), monthly income (M), and the price of a related good R (PR):.0/msohtmlclip1/01/clip_image002.png”>a. Construct the demand curve for the good when M = \$1,000 and PR = \$5.
The equation for demand isQd
= ________________________b. Interpret
the intercept and slope parameters for the demand equation in part a.c. Let income
decrease to \$950. Construct the new demand curve. This good is _____________________
(normal, inferior). Explain using your graph.d. For the
demand curve in part c, find the
inverse demand function:P =
_____________________.e. Let
the price of good R increase to \$6 (income remaining at \$950). Construct the
new demand curve. Good R is a _______________________ (substitute, complement)
good. Explain using your graph.f. For
the demand curve in part e, find the
equilibrium price and quantity when supply function is as under;
.0/msohtmlclip1/01/clip_image004.png”>PE =
____________ and QE = ____________g. Construct the supply curve and verify your answer by showing
equilibrium price and equilibrium quantity graphically.

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