1)In
the world of electronics overtime people realized the immense use of having a
personal laptop. And at the same time the technology has improved significantly
in last decade. In fact the technological improvement has surpassed the
increase in willingness and ability to purchase a laptop. Given this piece of
information, what in your opinion happened to the equilibrium price and
quantity in market for personal laptop. Draw a diagram and explain your
answer.(10 points)

2)If income elasticity
of demand of good X is 0.89, what will happen to equilibrium price if there is
an increase in income of consumers. Draw a diagram to support your answer. (5
points)

3)If Ministry of labor
sets up a minimum wage in the labor market, what can be the potential effect on
the employment? Explain your answer with help of relevant diagram. (10
points)

4)A manager in a firm
has been assigned a job to find costs at different levels of output He is
provided with the following table and asked to fill up the missing values since
there was no information available.

He
was also asked to find the marginal cost at output level of 5 units. (7+3=10
points)

5)According
toposting
from last fall, sales for products such as Spam, pancake mixes,instant
potatoes, rice and beans have been booming during the recession; a spokesperson
from a grocery chain is quoted as saying “They’re real belly fillers.” Comment
on this, using concept related to any one of the elasticities discussed in
class.(5 points)

6)If RTA increases the
bus-fare from Abu Dhabi to Dubai, then what will happen to their revenue?
[Hint: the demand curve is inelastic] Explain your answer with help of a
diagram. (10 points)