ECO401 Assignment No 1 Solution Spring 2018

ECO401 Assignment No 1 Spring 2018

Dear Students, Here you can read or Download ECO401 - Economics Assignment No 1 Solution and Discussion of Semester Spring 2018. Assignment Due Date is 21 MAY, 2018. Total Marks are 10. We are here to facilitate your learning and we do not appreciate the idea of copying or replicating solutions. ECO401 Assignment Solution File has been added. Previously we shared ECO401 Solved MCQs Mega Collection for Mid Term Papers.

ECO401 Assignment No 1 Solution and Discussion Spring 2018

ECO401 Assignment Deadline:

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Assignment Question:

The Case:

Agriculture is an important sector of Pakistan's economy. This sector directly supports the country's population and accounts for 26 percent of gross domestic product (GDP). The major agricultural crops include cotton, wheat, rice, sugarcane, fruits and vegetables. The annual sugarcane output has averaged around 74m tones in the last four years, according to the economic survey. As a result, the average production of sugar between 2013-14 and 2016-17 remained well above 5.7m tones. Further, the average wheat output has remained above 25.6m tones in the last four years compared to generously estimated national average consumption of 24m tones, according to the economic survey of Pakistan. Suppose the wheat and sugarcane is facing the following demand functions:

Demand function for wheat crop:
Demand function for sugarcane crop:

Requirements:

1. Calculate price elasticity of demand of agricultural products using point elasticity method for wheat crop and sugarcane crop in the following cases:

If market price of wheat is Rs.1300 per ton.
If market price of sugarcane is Rs. 180 per ton.

(Note: You are required to use given demand function and market price for calculation of price elasticity of demand of each product)

2. Suppose government gives subsidy to the producers of agricultural sector, explain with reason how it will impact the supply and price of the agricultural products in domestic market. (Graph is not required)
(Marks: 1: 4+4, 2: 2)