This assignment is an individual assignment. The due date for Assignment 1 is by
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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)
5.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 If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium? drive the market toward the equilibrium?
