Elements of Economics – CA01

There is only one section containing: 3 Short Questions (Total 10 marks)

Do not copy the question into your submitted answers as it will affect your plagiarism score.

Question 1 (Total 4 marks)

(a) An increase in technology will increase the quantity supplied of laptops in the market. True or False?  Explain your answer clearly; marks will not be awarded for merely stating if the statement is true or false.

(2 marks)

(b) You will earn $15 per hour working part-time. Your best friend has asked you to watch a movie at the cinema tonight that will cost you $21 for a combo ticket (cinema ticket will cost you $15 while the popcorn and drink combo is worth $6). You will have to pay $3 for the train trip to and from the cinema. Assume you will have to pay the same $3 had you chosen to go to work, what is the cost of watching the show with your friend if the entire night out is approximately 4 hours? Hint: You need to consider opportunity cost in your calculations. (2 marks)

Question 2 (Total 6 marks)

Consider the market for fresh chicken. Using an appropriate demand and supply diagram, explain the following effects on the chicken market independently. Your answer must include the possible changes in equilibrium price and quantity.

(a)The price of chicken feed rises substantially.

(3 marks)

(b) A wildly popular chicken recipe has gone viral on the Internet. Many people want to try and cook this dish to try for themselves.

(3 marks)

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