The table below shows the demand and supply of coats in Small Town.

a. What is the equilibrium price of coats?

b. Will a shortage or surplus occur?

c. At what price will the most coats sold be sold?

d. The mayor of SmallTown in order to "help the poor by making coats cheaper", imposes a price ceiling of $40. How many coats will be bought and sold? Will a surplus or shortage of coats occur?

e. The mayor of Small Town, in order to "help protect our coat industry," imposes a price floor of $80 instead. How many coats will be bought and sold? Will a shortage of coats or surplus occur?

To answer all the questions, it will be easy for you to draw the supply and demand graph first to see the whole picture. Keep it up!

When customer wants to purchase a goods, he/she will engage in a decision-making process. Please use the model “consumer decision making process” (5 steps) to discuss the purchasing process of one high involvement purchase situation based on your own experience.

Discuss three parameters for firms operating in an oligopoly market. Even when allowed to collude, firms in an oligopoly will choose to cheat on their agreements with the rest of the cartel. Why?

What is the role each of these characters, listed below, play in the unification of Italy in the Leopard, by Giuseppe Tomasi di Lampedusa.

Characters are: Angelica, Don Calogero, Father Pirrone, and Concetta

Discuss the legal aspects of adverse impact and what recommendations could be made to reduce adverse impact .

Private tuition centres are a big industry in Singapore with over 500 such centres that reportedly serve more than 95% of all college students. Tuition fees can be high and some families pay more than $3000 a month to send their children to private tuition. Using the theory and models of market structure, examine this industry. Should government be worried about any aspect of how an industry with this particular market structure will perform?

QUESTION THREE [25]

3.1 “Patent laws, (which can last up to twenty years), in South Africa gives a pharmaceutical company monopoly power on the sale of any new medication that it discovers.” In terms of the above statement answer the following questions:

3.1.1 Discuss the profit maximisation position of the firm in the short-run and long-run whilst it is protected by the patent. (12)

3.1.2 Explain the change that occurs in terms of the market structure when the patent expires. (5)

3.1.3 Explain the profit maximising position of the new market structure in the short-run, in other words after the patent expires.

QUESTION ONE [20]

Assume the equilibrium price for rental space for residential occupation is R100/m2 and people seeking homes find this equilibrium price too high. Home seekers therefore lobby the government to pass laws that alter the market outcome by changing the price of rental accommodation. If those seeking rental accommodation are successful in their lobbying, the government will impose a legal maximum on the price at which rental accommodation can be sold. In terms of the above, discuss the effect on the equilibrium price and quantity of rental accommodation in each of the following cases, using diagrams to motivate your answer:

1.1 Government imposes a price ceiling of R120/m2 for rental accommodation. (8)

1.2 Government imposes a price ceiling of R70/m2 for rental accommodation

Many people think that economics is the study of money, financial management, and investment, but that is not the case. Explain with examples what are the main concepts that are the backbone of economic studies?

Is having a trade deficit necessarily bad for the United States? Explain your answer.

Is greed the same as self-interest?

**Must be at least 4-5 sentences

Q3 - List four shift factors of demand and explain how each affects demand.

4. How is a change in a shift factor different from a change in price?

QUESTION 46

1. The Keynesian approach to fiscal policy calls for

   a		budget deficits during periods of inflationary pressure
   b		budget surpluses during periods of high unemployment
   c		a balanced budget despite the state of the economy
   d		tax cuts during recession
   e		spending increases during inflation

2. The income effect of an increase in the price of hominy grits (an inferior good) is a(n)

   	a	decrease in the demand for hominy grits
   	b	decrease in the quantity demanded of hominy grits
   	c	increase in the demand for hominy grits
   	d	increase in the quantity demanded of hominy grits
   	e	new demand curve because everything else is no longer constant

3. The Keynesian approach to fiscal policy calls for

   a		budget deficits during periods of inflationary pressure
   b		budget surpluses during periods of high unemployment
   c		a balanced budget despite the state of the economy
   d		tax cuts during recession
   e		spending increases during inflation

Find a concept on your own from Adam Smith that is not on the web page of this course. You need to identify the page and source of where you found this concept. What prompted Adam Smith to develop this idea. How would you use this concept to explain an observation in your life, an historical event, a cultural norm or institution, a local/international problem, create a solution to an environmental issues, or to create a business opportunity.