2020 – 2021 ECO701 Economics and the Business Environment
Coursework 1 Re-sit Assignment
This assignment is set for students who had not passed/completed Coursework 1 over Jan 21 – May 21 semester.
Please complete all of the questions noted below. Please ensure that you appropriately justify your answers including the use of relevant diagrams where possible.
The word limit is 2000 words (excluding graphs, tables and references)
Which of the following factors influences demand? (5%)
I and IV
II and III
I, III, and IV
I, II, III, and IV
Electric guitars and amplifiers are complement goods, and electric guitars and acoustic guitars are substitute goods. An increase in the price of amplifiers ______ the number of electric guitars consumers want to buy, while an increase in the price of acoustic guitars ______ the number of electric guitars consumers want to buy. (5%)
Genetically modified soybean seed is an example of a new production technology that has increased soybean productivity. As a result, this new technology ______ production costs and ______ the supply of soybeans. (5%)
Suppose that farmers can use their land to grow and sell soybeans and cotton. How would farmers respond to rising cotton prices? (5%)
If the price of crude oil falls (5%)
In the strawberry market, the quantity demanded is given by QD = 2,600 – 500P, and the quantity supplied is given by QS = –400 + 100P. What is the equilibrium price and equilibrium quantity? (15%)
The price of good Y decreases by 15% and the quantity of good X sold increases by 4%. What is the cross-price elasticity of demand for good X with respect to good Y? How are good X and good Y related? (10%)
George bought a train set from Toys4Ever Shop. He paid £240 for the set and received consumer surplus of £125. What was George's willingness to pay for the train set?
The market for cookies is represented by the following supply and demand conditions: QD =1,000 – 200P and QS = 400P – 200, where P is the £ price per box of cookies and Q measures boxes per day.
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