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Instructions:
College of Administrative and Financial Sciences
Assignment-1
Deadline: 01/07/2021 @ 23:59
Course Name: Macroeconomics Students Name:
Course Code: ECON201 Students ID Number:
Semester: Summer CRN:
Academic Year: 1441/1442 H
For Instructors Use only
Instructors Name: Bandar Almutairi
Students Grade: / 5 Level of Marks: High/ Medium/ Low
Instructions PLEASE READ THEM CAREFULLY
· Assignments will vary across CRNs, so make sure you do the assignment associated with your CRN.
· Any matched results will be considered cheating, so it results into ZERO grade.
· Show all works for calculation, final result will not be accepted without showing how you reach to it.
· YOU CAN NOT USE ANY OUTSIDE RESOURCES FOR HELP ON THE ASSIGNMENT & IF YOU HAVE ANY QUESTION, ASK ONLY YOUR INSTRUCTOR ( almutairi.b@seu.edu.sa ). OTHERWISE, IT WILL BE CONSIDERED CHEATING.
· The Assignment must be submitted on Blackboard (WORD format only) via 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 your information on the cover page.
· Students must mention question number clearly in their answer.
· 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.
Q1. (4 Points)
Consider an example of the vehicle tires; if the supply and demand are:
Qs = – 500 + 8p ; Qd = 500 2 p
Solve:
a) Equilibrium price and equilibrium quantity and calculate total revenue?
b) If there were a price celling equal to 120 SAR per each tire imposed, calculate the price elasticity of demand? Does this consider elastic, inelastic or unit elastic? Also, calculate the total revenue?
c) Now consider the vehicle battery; if the supply and demand is:
i. Qs = – 100 + 3p ; Qd = 1100 9p, calculate the equilibrium price and equilibrium quantity. Also, calculate Total Revenue.
ii. If there were a price celling of 120 SAR imposed per each pair of battery, calculate the price elasticity of demand? Do the battery prodduct consider elastic, inelastic or inelastic or unit elastic? Also calculate total revenue.
d) Compare the total revenue for the tires and the total revenue you found for the battery. Which one of products total revenue has been increased after the price have been increase and why? Explain in words and show the difference in numbers as well.
e) Recall part a (The tires) Calculate the CS & PS. Hint; you need to set Qs=0 & Qd=0 to find the intercept and calculate the CS, PS. you need to set Qs=0 & Qd=0 then solve for P to find the intercept and calculate the CS, PS. Where the CS is the area between the intercept for demand and the equilibrium price you found on part a. Do not forget that this area is a triangle so carefully calculate the area. The same thing for PS.
f) Now, if the government impose sales tax equal to 5%, what is the CS, PS, government revenue and DWL and show this on the graph? Hint; price paid by the buyer equal 104 SAR and price received by seller equal 99 SAR, the difference is the tax per tires. The intercept points for the supply and demand on this part are the same as the ones on part e. To find the quantity, plug either the price for the buyer on the demand curve formula or the price for the seller on supply curve formula. Also, remember CS, PS & DWL have triangle area, whereas tax revenue has rectangular area. Graph this manually so you can easily find the answer.
g) Without calculation, would you expect to have higher/ lower government revenue and DWL on the vehicle battery and why?
Q2. (1 point)
Assume that Saudi Arabia produce only two products; cupcakes and TVs where are the price and quantity produced are:
Calculate GDP deflator for the years 2018, 2019 and 2020. Also, calculate the Nominal and real GDP growth on 2019 & 2020, compare between them by explaining why they are different. Calculate the 2019 & 2020 inflation rates.
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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College of Administrative and Financial Sciences