Demand Elasticity Wage Determination Supply & Demand Curves Equilibrium Points Analysis

Section I.

1. Explain why demand is more inelastic in the long run (10 marks, max 200 words).

2. Explain how the wages are determined in the private sector. Provide the example of a

profession with the main participants of its sector.

(10 marks, max 200 words)

3. You are given the following quotes for petrol on the New York Mercantile Exchange

(NYMEX) See attached table.

Sketch the supply and demand curves (with a Word/Excel chart or by hand and then take/insert

a photograph) including the units for the axes.

Determine graphically and arithmetically the equilibrium point. (5 marks)

-Now, imagine that multiple reports estimate that the 2023àexpected economic recession will

not happen. What would that mean for supply and/or demand (5 marks)? Answer with your

own words

Imagine that a new oil extraction technology increases production by 20 million barrels at each

price point. Whatàthe new equilibrium? Graph the shift in the curve and represent the new

equilibrium point. (10 marks).

(Total: 20 marks, Max 200 words)

4. Calculate the following elasticities:

Price: $100 decreases to $75

Quantity demanded: 100 increases to 125.

Explain the category of elasticity of this good.

Price: $1 increase to $1.10

Quantity demanded: no change.

Explain the category of elasticity of this good.

Price of A: $1 increase to $1.50

l Tareeqah Management Studies – 2023 4

Quantity demanded for B: 30 increases to 50

Explain the type of elasticity of this good.

(10 marks, max 100 words)

Section II.

1. Explain how the supply and demand of money impact the setting of interest rates in

the US since the change of monetary policy at the beginning of 2022.

Answer this question like an essay with an introduction and a conclusion and 2/3 sections in

between. Use 10 unique professional/academic references.

Tips: Include financial data to explain the changes in supply and demand of money (25 marks,

700 words).

2. Explain how profitability can be determined for a producing firm. Using charts

provided in class explain which the costs and revenue are used and explain the different stages.

Tips: Introduction and conclusion are not needed but you need to explain each stage and the

meaning/use of each curve.