Define price elasticity...

(a) Using supply and demand analysis, explain the effect on the equilibrium price and quantity traded of houses in a country following the events below. (Consider each event separately.) (1) A fall in the rate of interest on loans for house purchases for an extended period of time. (ii) A rise in the level of taxes to be paid on the sale of a house. [5 marks] [5 marks] (iii) The relaxation of planning controls allowing more land to be used for building new houses [5 marks] (b) Assume the demand for cricket match tickets at Rs50 is 50,000 per week in India. If the Cricket club raises its prices to Rs60 per ticket and subsequently the demand falls to 45,000 per week. Calculate the value of Price elasticity of demand. [5 marks] (c) The table below provides data on weekly total revenue and total cost for a firm in $: Output per week Total Revenue Total Cost (units) 0 1 10 HO 25 100 45 115 70 5 125 100 130 140 132 200 (1) What is the Marginal Revenue from the production of the 5th unit? [2 marks] (ii) What is the Total Fixed Cost when 5 units of output are produced? [1 mark] (ii) Calculate the Average Variable Cost of producing 5 units of output? [2 marks]