Answer the question below

TUTORIAL 2: ECO201/ECO3033 ECONOMICS DEMAND, SUPPLY, MARKET EQUILIBRIUM AND ELASTICITY NAME: ID STUDENT: MARKS: Question 1 a. Table 1 and Table 2 are the demand and supply schedules for Mangosteens in Marudi. Table 1 Supply Price (RM) Quantity (kg) 5.00 50 6.00 100 7.00 150 8.00 200 9.00 250 10.00 300 i. Table 2 Demand Price (RM) Quantity (kg) 5.00 300 6.00 250 7.00 200 8.00 150 9.00 100 10.00 50 On a graph paper plot the demand and supply curves and label them correctly. ii. (3 marks) Determine the equilibrium price and quantity. (2 marks) Price equilibrium: _________ Quantity equilibrium: __________ iii. If the government fixed the price at RM6.00 per kilogram, what is this legal price called? Calculate the amount and determine whether there is a surplus or shortage. (3 marks) iv. On a separate diagram, sketch new equilibrium price and quantity if income of consumers in Marudi increases. (2 marks) b. Diagram 1 below shows the equilibrium price and quantity of mutton in Selangor. Diagram 1 i. When the price of chicken decreases, what happen to the demand of mutton in Selangor? Increase / Decrease (1 marks) ii. Sketch a new diagram to explain your answer in (i). (3 marks) iii. When the price of chicken increases, and the supply of mutton remains the same, the equilibrium price of mutton will _________ and its equilibrium quantity will __________. (2 marks) iv. Sketch a new diagram to explain your answer in (iii). (2 marks) v. Give TWO (2) possible reasons that would cause the supply of mutton to increase. (2 marks) (Total: 20 marks) Question 2 Table 3 shows the relationship between the price of S and the quantity demand for S and Z. Table 3 Price of S Quantity demanded for S Quantity demanded for Z (RM) (kg) (kg) 4.00 150 100 5.00 120 80 6.00 100 70 7.00 80 50 Based on the information in Table 4, answer the following questions: a. Calculate the price elasticity of demand if the price of S increases from RM5 to RM7. State whether the demand for S is elastic or inelastic. (4 marks) b. Calculate the cross elasticity of demand for Z when the price of S decreases from RM6 to RM4. What is the relationship between S and Z? (3 marks) c. Calculate the income elasticity of demand for each good based on the information given in Table 4 and classify its type. Table 4 Goods % change in % change in quantity S Z Y income Increase 20 Increase 10 decrease 3 demanded increase 60 Increases 2 increase 3 coefficient Type of good (3 marks) (Total: 10 marks) TOTAL: 30 MARKS