The table below shows information on the demand and supply for Chicken, where the quantities of Chicken are measured in thousands. Price Qd Qs GHS 120 50 36 GHS 150 40 40 GHS 180 32 48 GHS 210 28 56 GHS 240 24 70 Table 1. Demand and Supply for Chicken a. What is the quantity demanded and the quantity supplied of Chicken at a price of GHS 210? b. At what price is the quantity supplied equal to 48,000 Chickens? c. Graph the demand and supply curve for Chickens. Determine the equilibrium price and quantity from the graph? d. If the price was GHS 120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?
1. The table below shows information on the
GHS 120 50 36
GHS 150 40 40
GHS 180 32 48
GHS 210 28 56
GHS 240 24 70
Table 1. Demand and Supply for Chicken
a. What is the quantity demanded and the quantity supplied of Chicken at a price of GHS 210?
b. At what price is the quantity supplied equal to 48,000 Chickens?
c. Graph the demand and supply curve for Chickens. Determine the
d. If the price was GHS 120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?
2. An exclusive Yoghurt manufacturer sells 4,000 gallons per month at a price of GHS 40 each. When the price is reduced to GHS 30 sales increase to 6,000 gallons per month.
a. Calculate the price elasticity of demand for the Yoghurts over this price range.
b. Is demand elastic, unit elastic or inelastic?
c. Calculate the change in revenue due to the change in price.
3. Akua is a School of Agriculture graduate and consumes 2 goods: Yoghurt and Bread. Akua also earns a typical student income from the parents, GHS 400 a month. She can either spend it all on Yoghurts and get 50, or she can spend it all on Bread and get 200 loaves.
a. Given this information, construct the equation for Akua’s Budget Line.
b. The following are the bundles that Akua can afford with her income:
Yoghurt Bread
10
0
80
20
Fill the blanks in the table with the quantities that will exhaust Akua’s income.
c. Akua gets a research grant and her income increases to GHS 800 per month. What is the new equation of her budget line? What if income stays constant at GHS 400 and the price of Yoghurts increase to GHS10?
d. Assume that prices are the same as used in part a. If the
e. Now assume that Yoghurt and Bread are compliments for Akua. For her to consume all her income of GHS 400, and the prices used in part a. What if Yoghurt is so SOUR that Akua needs 2 loaves of bread for every Yoghurt that she consumes?
4. DBS Farms is a producer and retailer of farm products. DBS main products are Mangoes, Pawpaw and Pineapples. The current price of the Mangoes per Kilogram is GHS 50, the Pawpaw/Kg is GHS 80 and the Pineapple is GHS 40. This year the DBS Farms sold 10,000 kgs of Mangoes, 20,000 kgs of Pawpaw and 1 million kgs of Pineapples. In an attempt to improve revenue, the managers of the firm have decided to increase all prices by 10%.
a. Comment on the planned price changes.
b. Would a 10% price reduction have been better for some or all of the products?
5A. Explain how
a. “Nestle Ghana posted a 18% increase in sales”
b. “GRIDCO plans to slash more jobs”
c. “Ghana’s Output Grew by 5.8%”
d. “Housing starts soared 10% in September”
e. “Ghana to Breach key Deficit Target it helped to create”
Explain each issue why it is a microeconomic issue
5.B Justina owns the Just’s Sobolo Store. She charges GHS10 per bottle for her handmade sobolo. You, the economist calculated the elasticity of demand for sobolo in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Be able to explain your answer.
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