|
|
Q.1: In closed economy in which the GDP is growing at 7 per cent per annum and the population at 2 per cent per annum,the income elasticity of demand for food is 0.4.If food prices are determined by demand and supply at what rate must food supply increase ,if the price of food is to remain constant?
Q.2: In an economy with only two goods X and Y.The price of x increased from 1 in period 1 to 1.5 in period 2,while that of Y remained constant at 1.Consumer A consumed 2 units of X and 3 Units of Y in period 1,and 3 units of X and 2 units of y in period 2.Consumer B consumed 3 units of x and 2 units of y in period 1 and 1 unit of X and 3 units of Y in period 2.Assuming that tastes of these two individuals have not changed,which individual is clearly better off in period 2 compared to period 1?
Thanks
|
Locked
