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1) The document is an exam for a Managerial Economics course containing 5 questions assessing different economic concepts. 2) Question 1 asks students to explain graphically when a country becomes an exporter or importer of a good. Question 2 asks students to define a tariff and describe its economic effects. 3) Question 3 has two parts asking students to (a) draw and label a diagram depicting the U.S. orange market in autarky, and (b) show how trade affects the market equilibrium and consumer/producer surplus. 4) Question 4 asks students to (a) draw production possibility frontiers for two countries with different productivity levels, (b) identify which

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Tabish Khan
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157 views2 pages

Assignment (2) - 1

1) The document is an exam for a Managerial Economics course containing 5 questions assessing different economic concepts. 2) Question 1 asks students to explain graphically when a country becomes an exporter or importer of a good. Question 2 asks students to define a tariff and describe its economic effects. 3) Question 3 has two parts asking students to (a) draw and label a diagram depicting the U.S. orange market in autarky, and (b) show how trade affects the market equilibrium and consumer/producer surplus. 4) Question 4 asks students to (a) draw production possibility frontiers for two countries with different productivity levels, (b) identify which

Uploaded by

Tabish Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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KOHAT UNIVERSITY OF SCIENCE AND TECHNOLOGY, KOHAT

Institute of Business Studies


Paper: Managerial Economics
Discipline: BBA, Section: (R and S) (Exam: Online Final : Fall, 2020), Time: 9:00 AM-9:00 AM
Marks: 30

INSTRUCTIONS:

1) The Answer sheets must be handwritten. Your Name, Registration number, Program and Semester MUST be
clearly written on your handwritten answer sheet.
2) After solving the paper, student is required to follow three steps, (1): Clearly scan it, (2): then convert it into PDF,
(3): upload on KCMS. In case of any technical issue with KCMS account, submit your answer sheet through
registered email to [email protected] not later than 24 hours.
3) Important Note: Solved handwritten answer sheet must be submitted within 24 hours after which it will not be
accepted.
4) The student will send hard copy of their answer sheets through courier / postal services or can submit person
to the concerned instructor within the 24 hours after the Examination.

Attempt all questions.

Q1. When does a country become an exporter of a good? An importer? Explain it Graphically? (5 Marks)

Q2. Describe what a tariff is and describe its economic effects? (5 Marks)

Q3. The United States represents a small part of the world orange market. (10 Marks)

a. Draw a diagram depicting the equilibrium in the U.S. orange market without international trade. Identify the
equilibrium price, equilibrium quantity, consumer surplus, and producer surplus.

b. Suppose that the world orange price is below the U.S. price before trade, and that the U.S. orange market is now
opened to trade. Identify the new equilibrium price, quantity consumed, quantity produced domestically, and
quantity imported. Also show the change in the surplus of domestic consumers and producers. Has domestic total
surplus increased or decreased?

Q4. Let suppose in the world there is two country, Country X and Country Y. In country X there is only one worker A
while on country Y the worker is B. And both can produce sugar and wheat. But the country B is specialized in producing
wheat and the other one in sugar. Suppose that the A and the B each work 40 hours a week and can devote this time
to growing sugar, raising wheat, or a combination of the both. The person A can produce a pound of sugar in 10 hours
and a pound of wheat in 20 hours. The B, who is more productive in both activities, can produce a pound of Sugar in 8
hours and a pound of meat in 1 hour. (10 Marks)

(a) Draw the Production Possibilities Frontiers for both workers?


(b) Whose have absolute and comparative advantage?
(c) Why they move toward trade?
(d) Graphically shows the gain from trade.
Q5. Write a short note on the following:

(a) Suppose there is a product whose price is increasing but it has no impact on quantity demand (increase or
decrease). Draw the graph of this quantity demand.
(b) Suppose there is economy – spending is high, so how they combat to support their spending.
(c) Graphically shows how monopolist can earn profit in short run.
(d) Suppose if you are the President of State Bank of Pakistan, and in your economy, there is a problem of inflation
so how you can solve this problem? (20 Marks)

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