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# [Solved] ECO402 Assignment 1 Solution & Discussion Spring 2020

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ECO402 Microeconomics Assignment 1 Solution & Discussion Spring 2020

MICROECONOMICS (ECO402)

ASSIGNMENT

DUE DATE: JUNE 01, 2020          MARKS: 10

## Case#01:

Pakistan electricity sector is a developing market. For years, the matter of balancing the country's supply against the demand for electricity had remained an unresolved matter. According to Pakistan Economic Survey 2018-19, the installed electricity generation capacity reached 34,282 megawatts (MW) in Jul- Mar 2018-19 compared to 33,433 megawatts (MW) in the corresponding period of previous year, recording a 2.5% growth. Despite the fact that Pakistan’s installed capacity to generate electricity has surged up, this sector is still facing manifold issues. Let’s suppose the quantity demanded and quantity supplied at different prices per unit of electricity are given in the following table:

 Per unit Price (Rupees) Quantity Demanded (Thousand MV) Quantity Supplied (Thousand MV) 20 25 14 24 22 16 26 18 18 28 16 20

## Requirements:

Keeping in mind the above table, you are required to:

1. Identify the per unit equilibrium price of
2. Calculate the price elasticity of demand and price elasticity of supply when per unit price of electricity is rupees

Marks: (1+6)

## Case#02:

Meat is a consumable food that appears in various forms in Pakistanlivestock markets including beef, mutton and poultry. Pakistan livestock sector has 50% share in agricultural GDP. Meat and poultry are great sources of protein. They also provide lots of other nutrients like iodine, iron, zinc, vitamins (especially B12), and essential fatty acids. The high cost of a nutritious diet can worsen nutrition outcomes, especially for low-income households. Consumer Price Index (CPI) is used to assess the situation of Inflation. The monthly price review shows the prices of 53 items, including beef, mutton and chicken in 17 major cities of Pakistan. The information about nominal prices and CPI of beef, mutton and chicken for the year 2019 and year 2020 is given below:

 Item Unit Year Nominal Price in Faisalabad CPI Real Price Beef Kg April- 2019 375.00 336.48 April- 2020 450.00 372.48 ? Mutton Kg April- 2019 950.00 350.53 April- 2020 1000.00 380.63 ? Chicken,live Kg April- 2019 179.88 225.63 April- 2020 128.00 168.32 ?

## Requirements:

Keeping in mind the above case and assuming April-2019 as the base year, find the real price of beef, mutton and chicken for April-2020.

Marks: (1+1+1)

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# As you know that Pre Mid-Term semester activities have started and

load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

Students kindly share assignment files in relevant subject timely for discussion/solution.

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ECO402 Microeconomics Assignment 1 Solution & Discussion Spring 2020