Assignment 1 ECON101 (2nd Term 2021-2022)
Deadline: 28/02/2022 @ 23:59
(To be posted/released to students on BB 14/02/2022)
| Course Name: Microeconomics | Student’s Name: |
| Course Code: ECON101 | Student’s ID Number: |
| Semester: 2nd | CRN: |
| Academic Year: 1442/1443 H, 2nd Term | |
For Instructor’s Use only
| Instructor’s Name: | |
| Students’ Grade: /10 | Level of Marks: High/Middle/Low |
Instructions – PLEASE READ THEM CAREFULLY
- This assignment is an individual assignment.
- Due date for Assignment 1 is 28/02/2022
- The Assignment must be submitted only in WORD format via allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
- Students must mention question number clearly in their answer.
- Late submission will NOT be accepted.
- Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Question-1
Bill can produce either tables or chairs. Bill can work up to 10 hours a day. His production possibilities are given in the table below: (3 Marks)
| Tables | Chairs |
| 0 | 200 |
| 50 | 180 |
| 60 | 160 |
| 70 | 140 |
| 80 | 120 |
| 90 | 0 |
- Explain production possibilities frontier (PPF) by putting tables on the Horizontal axis and chairs on the vertical axis. What is Bill’s opportunity cost of producing one additional table?
- Currently Bill is producing 70 tables and 140 chairs. Is this allocation of resources efficient? Why?
- Show this allocation on the graph and advise Bill how he can be more efficient.
Question-2
Explain by applying these concepts with examples. (2 Marks)
- Rational people respond to incentives
- Role of prices in allocating resources
Question-3
The table below shows the marginal benefit that Khaled earns from keeping his store open one more hour. Khaled has a marginal cost of $40 per hour. Khaled stays open 20 hours. (3 Marks)
| Hours | Marginal Benefit Per Hour |
| 20 | 200 |
| 21 | 140 |
| 22 | 110 |
| 23 | 70 |
| 24 | 40 |
| 25 | 10 |
| 26 | 0 |
- Do you think Khaled’s decision to stay open 20 hours is optimal? Why?
- How many hours do you advise Khaled to stay open? Why?
Question-4
Suppose the market for Computer is given by the following equations for supply and demand:
(2 Marks)
Qd= 3300−2P
Qs= 500+8P
- Calculate the equilibrium price and quantity.
- Sketch the supply and demand curves on a graph indicating the equilibrium quantity and price.
Post a Comment