1. Use the following demand curve to answer the following questions.
a. How would point A be represented as an ordered pair?
b. What type of curve is this?
c. Does this curve show a positive or negative correlation between price and
quantity? Explain.
d. Compute the slope of the D1 between points A and C.
e. What is the slope of D1 between points C and E? Why would you not have to
calculate this answer?
f. What is it called if we move from D1 to D2?
g. How do you know that the slope of D2 is the same as the slope of D1?
2
2. GRAPHICALLY analyse the following scenarios:
a. People often travel to the Caribbean from the USA and the UK to
escape cold weather. Describe what results in the market for Caribbean
hotel rooms during the winter period in the USA and the UK.
b. When war broke out in the Middle East, many markets were affected.
Most of the world’s oil production takes place this region. Describe (i)
what happens in the market for oil; and (ii) what would happen in the
market for sports utility vehicles (SUVs) as a result of the war.

3. Consider a market for trucks. Assume that the demand for trucks is given by:
QD= 60 – 2P + 5Y
where P is price per truck and Y is the income of the buyers.
The supply of trucks is given by:
QS= 30 + 5P – 3W
where W is the price of all the materials needed to produce a truck.
Compute the equilibrium price and equilibrium quantity of trucks bought and sold.
(Hint: Your answers will depend on Y and W)

4. You own a small cinema. You currently charge $5 per ticket for everyone who
comes to your movies. Your friend who took an economics course at university
tells you that there may be a way to increase your total revenue. Given the
demand curves shown, answer the following questions

a. What is your current total revenue for both groups?
b. The elasticity of demand is more elastic in which market?
c. Which market has the more inelastic demand?
d. What is the elasticity of demand between the prices of $5 and $2 in the
adult market? Is this elastic or inelastic? Show your calculations.
e. What is the elasticity of demand between $5 and $3 in the children’s
market? Is this elastic or inelastic? Show your calculations.
f. Given the graphs and what your friend knows about economics, he
recommends you increase the price of adult tickets to $8 each and lower
the price of a child’s ticket to $3. How much could you increase total
revenue if you take his advice? Show your calculations.

5. Assume that a consumer faces the following budget constraints.

a. Assuming that income is the same on both occasions, describe the difference in
relative prices between Panel A and Panel B, i.e., which good has higher price in
each time period.
b. If income in Panel B is 126, what is the price of good X? Show your calculations.
c. If income in Panel A is 84, what is the price of good Y? Show your calculations.
d. Assuming that the price of good X is the same on both occasions, describe the
difference in income and price of good Y between Panel A and Panel B.

if i can get a email address from you i would like to show the corresponding graph to the question via e-mail. thank you in advance! my address is veronathomas1@hotmail.com.
Thanks
Verona