Fall 2020 Terminal Exam Question SheetAttention: - Attempt all of the following questions. - Your paper is subject to plagiarism check. Make sure you do not write similar to your classmates or any...

Fall 2020 Terminal Exam Question SheetAttention: - Attempt all of the following questions. - Your paper is subject to plagiarism check. Make sure you do not write similar to your classmates or any other sources. - You have 24 hours to answer the paper and upload it, starting from 04:00 PM, Wednesday 10 February 2021. - The deadline for uploading this paper is 04:00 PM, Thursday 11 February 2021. After completing the - Upload your answer sheets in the Pdf format to the portal. - Provide detailed explanations to all the questions. Limited explanation may lead to limited marks.1. This question has 5 sections; you need to first replace the highlighted Alphabet letters (A, B, C … ) with values of your own choice (suitable and valid as per the law); then solve each section as per your inserted values:1.1. The demand quantity of a good rises from A to B units when the price falls from AFN C to AFN D per unit; what is the Price Elasticity of Demand (Use the Percentage Method)1.2. The demand quantity of a good falls from E to F units when the price rises from AFN G to AFN H per unit; what is the Price Elasticity of Demand (Use the Total Outlay Method)1.3. The demand quantity of a good rises from I to J units when the price falls from AFN K to AFN L per unit; what is the Price Elasticity of Demand (Use the Arc/Mid-point Method)1.4. Go through the following table (depicting Demand Quantity at Different Prices) and find the values of blank cells:SituationBefore Change in Price After Change in PricePED (Ab. Value)Method to UseWhat is the degree?Price (AFN)Quantity (Units)Price (AFN)Quantity (Units)A 300 5000 6000 1.5 Total Outlay B 500 300 9,000 2 Percentage D 5,000 100 8,000 5 Arc/Mid-P(For full answer you will get 15 marks)Course Title: Microeconomics Exam time: 24 Hours Instructor: Ahmad Sina Sabawoon Program: BBA/B.Sc. Economics Session: Evening Semester: Fall 2020 Assessment: Open Book Questions Marks: 502. Go through the following statements given; and answer the questions asked below each:2.1. Statement: Assume, there was 20% import tax rate on import of agricultural machinery to Afghanistan, which has just decreased to 8%. Question: Who would benefit the change? Why? How will this affect the market demand and supply for agricultural machinery in Afghanistan? Explain it with the help of graphical illustration2.2. Statement: The demand for Toyota Cars, model 2010 in Kabul is given by the following equation: Qd = 12000 – 0.4P + 0.3PM + 0.2Y ; where ‘Qd’ is the demand quantity, ‘P’ is the price car, ‘PM’ is the price of Mercedes Benz and ‘Y’ is consumer’s average annual income. Questions:A. Looking at the demand function, what do ’12,000’, ‘-’ and ‘+’ mean? Why do we have ‘’ before ‘P’ and have ‘+’ before ‘Y’ and ‘PM’? Can the sign before income be ‘-‘ also? How? B. Calculate the market demand for the following two situations: Situation P (USD) PM (USD) Y (USD) Qd (Toyota Model 2010) A 7,000 5,000 25,000 ? B 11,000 8,000 18,000 ?(For full answer you will get 8 marks)3. This question has 3 sections:3.1. List any 8 major industries in Afghanistan.3.2. Describe the structure of each industry listed in section 4.1.3.3. Justify your ‘Market Structure’ naming in section 4.2. for each industry with logical bases, for example if you have written that ‘A industry’ is ‘Monopoly’; write a proper justification for it; why?(For full answer you will get 6 marks)4. Answer the following short questions:- What is the slope of demand curve; positive or negative? Why?- Can the Price Elasticity of Demand be Positive? Why? Justify your answer.- Can the Income Elasticity of Demand be Negative? When? Why? Justify your answer.- The Cross Price Elasticity of Demand for Commodity ‘A’ and Commodity ‘B’ is -0.62 and the same for Commodity ‘C’ and ‘D’ is +0.5. What could be the possible reason that the sign is positive for the first basket; and negative for the second?- Can the Price Elasticity of Supply be negative? Why? Justify your answer.- There are three common methods of calculating elasticity of demand; do they all give the same value? Why? Justify your answer with the help of an example.(Write your answer in at least 300 words, you will get 12 marks)5. This question has 4 sections:5.1. Make up an example of a monthly market demand schedule at 5 different prices for Coke and graph the implied demand curve. Would a change in the price of Coke shift this demand curve? Why?5.2. Make up an example of a monthly market supply schedule for Coke at 5 different prices and graph the implied supply curve. Would a change in the price of Coke shift this supply curve?5.3. Considering the demand and supply schedules prepared in your answers to sections ‘5.1.’ and ‘5.2.’; draw curves for both the schedules in one graph and determine their equilibrium price and quantity.(For full answer, you will get 9 marks)