Question

5) Explain three reasons why the PES of fresh and canned tomatoes differ (6)
6) Use a diagram to illustrate how each of the following events affects the equilibrium price
and quantity of pizza.
a. The price of mozzarella cheese rises.
b. The health hazards of hamburgers are widely publicized.
c. The price of tomato sauce falls.
d. The incomes of consumers rise and pizza is an inferior good.
e. Consumers expect the price of pizza to fall next week.

7) Explain how the knowledge of PED can be of use to an airline company (8)

8) Explain the difference between an extension in demand and an increase in demand (6)

9) Show the effect on the market for cars if:
a) the price of public transport increases
b) the price of petrol increases
c) workers productivity rises
d) the government charges a tax on car producers
e) the price of cars is expected to rise in a year.

10) If the price of good X increases by 26% and quantity supplied increases by 18% what is
the PES? Is the supply of the good considered elastic, inelastic or unit elastic?
11) If the initial price of a product is $4 and it increases to $6 and the initial quantity supplied
is 15,000 units and increases to 18,000 unit what is the PES? Is the supply of the good
considered elastic, inelastic or unit elastic?

Answer 1

Answer:

5. a

6. c

7. b

8. a

9. d

10 c

Explanation:

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Answer 2

Answer:

5. a

6. c

7. b

8. a

9. d

10. c

Explanation:

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