assignment 1 ECON201
Assignment 1
ECON201
| Course Name: Macroeconomics | Student’s Name: |
| Course Code: ECON201 | Student’s ID Number: |
| Semester: II | CRN: |
| Academic Year: 1442/1443 H, 2nd Term | |
For Instructor’s Use only
| Instructor’s Name: | |
| Students’ Grade: / 15 | Level of Marks: |
Instructions – PLEASE READ THEM CAREFULLY
- This assignment is an individual assignment.
- The due date for Assignment 1 is by the End of Week 7 (19/01/2023)s
- The Assignment must be submitted only in WORD format via the allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling in your information on the cover page.
- Students must mention question numbers clearly in their answers.
- Late submission will NOT be accepted.
- Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment 1 Questions: Week 2 to Week 3: – [15 Marks]
- Water is necessary for life. Is the marginal benefit of a glass of water large or small? Give an example of some action from your real life that has both a monetary and nonmonetary opportunity cost. (3 Mark)
- What does the “invisible hand” of the marketplace do? Explain the two main reasons of market failure and give an example of each. (3 Marks)
- How does a price ceiling set below the equilibrium level affect quantity demanded and quantity supplied? (3 Marks)
- What would be the impact of imposing a price floor below the equilibrium price? If a price floor benefits producer, why does a price floor reduce social surplus? (3 Marks)
- Illustrates the market for Pizza has the following demand and supply
schedules: (3 Marks)
| Price | Quantity Demanded | Quantity Supplied |
| $3 | 115 | 37 |
| $4 | 95 | 55 |
| $5 | 80 | 80 |
| $6 | 67 | 95 |
| $7 | 50 | 110 |
| $8 | 38 | 122 |
- Graph the demand and supply curves. What is the equilibrium price and quantity in this market?
- If the actual price in this market were above the equilibrium price, what would
drive the market toward the equilibrium?
- If the actual price in this market were below the equilibrium price, what would
drive the market toward the equilibrium?
