Price Elasticity of Demand

COURSE CODE: BCO115 COURSE NAME: TUTORING MICROECONOMICS SPRING Task brief & rubrics assessment
Task brief
Description:

  • Individual task. Each problem 25 % of the total grade.

 

  1. Calculate different costs of production by a firm which makes tires for cars:

 
Quantity                              Total Fixed Cost                Total Variable Cost
0                                                             200 €                                     0
1                                                             200                                        55
2                                                             200                                        75
3                                                             200                                        95
4                                                             200                                        145
5                                                             200                                        205
6                                                             200                                        365
 

  1. Calculate the following: marginal cost, average total cost average variable cost, average fixed cost, at every level of production.
  2. Make a graph all three curves. What is the relationship between the marginal-cost curve and the average-total-cost curve? And between the marginal-cost curve and the average-variable cost curve? Explain in detail.

 
 

  1. Consider a demand schedule for sandwiches is as follows:

 
                                Quantity Demanded                       Quantity Demanded
Price                      (income  24,000 €)                         (income  28,000 €)
 
8                                             32                                                           42
10                                           24                                                           37
12                                           16                                                           22
14                                             8                                                           12
16                                            5                                                           10
 

  1. Calculate price elasticity of demand as the price increases from 8 € to 10 € if your income is 24,000 and your income is $28,000.
  2. Calculate income elasticity of demand as income increases from 24,000 € to 28,000 € when the price is 12€ and the price is 16 €.

 

  1. 3. A and B are two food companies. They make cheese and ham. A takes 6 hours to make 1 kg of cheese and 2 hours to make 1 kg of ham. B takes 6 hours to make 1 kg of cheese and 4 hours to make 1 kg of ham.
  2. Calculate the opportunity cost of making ham and cheese. Who has the absolute advantage in making ham? Who has the comparative advantage in making cheese?
  3. If both trade food with each other, who will trade away cheese in exchange for ham?
  4. The price of ham can be expressed in terms of cheese. What is the highest price at which cakes can be traded that would make both companies better off? What is the lowest price? Explain.

 

  1. Classify the following markets (monopoly, oligopoly, monopolistic competition, and perfect competition) for these products? Explain in detail each type of market for every product.

 

  1. telecomunications
  2. copper
  3. lipstick
  4. movie streaming movies

 
 
 
Formalities:

  • Cover, Table of Contents, References and Appendix are excluded of the total word count.
  • Font: Arial 12 pts.
  • Text alignment: Justified.
  • Students are only allowed to use the slides / book and exercises provided for the course.

 
It assesses the following learning outcomes:

  • Outcome 1: Demonstrate an understanding of microeconomic theory and exercises
  • Outcome 2: Evaluate real life situations using required theoretical tools and knowledge

Rubrics

  Exceptional 90-100 Good 80-89 Fair 70-79 Marginal fail 60-69
Knowledge & Understanding (20%) Student demonstrates excellent understanding of key concepts and uses vocabulary in an entirely appropriate manner. Student demonstrates good understanding of the task and mentions some relevant concepts and demonstrates use of the relevant vocabulary. Student understands the task and provides minimum theory and/or some use of vocabulary. Student understands the task and attempts to answer the question but does not mention key concepts or uses minimum amount of relevant vocabulary.
Application (30%) Student applies fully relevant knowledge from the topics delivered in class. Student applies mostly relevant knowledge from the topics delivered in class. Student applies some relevant knowledge from the topics delivered in class. Misunderstanding may be evident. Student applies little relevant knowledge from the topics delivered in class. Misunderstands are evident.
Critical Thinking (30%) Student critically assesses in excellent ways, drawing outstanding conclusions from relevant authors. Student critically assesses in good ways, drawing conclusions from relevant authors and references. Student provides some insights but stays on the surface of the topic. References may not be relevant. Student makes little or none critical thinking insights, does not quote appropriate authors, and does not provide valid sources.
Communication (20%) Student communicates their ideas extremely clearly and concisely, respecting word count, grammar and spellcheck Student communicates their ideas clearly and concisely, respecting word count, grammar and spellcheck Student communicates their ideas with some clarity and concision. It may be slightly over or under the wordcount limit. Some misspelling errors may be evident. Student communicates their ideas in a somewhat unclear and unconcise way. Does not reach or does exceed wordcount excessively and misspelling errors are evident.