Economists Consider the Commodity Market as a Form of Perfect Competition: Principles of Economics Assignment, SIM, Singapore

Assignment Questions:

Question 1

1. Economists consider the commodity market as a form of perfect competition. Give ONE example of this type of market structure and discuss the characteristics.

2. List THREE different types of barriers of entry into an industry.

Question 2

1. Study the following table and answer the questions:

• At what price is the market in equilibrium?
• What is the equilibrium quantity?
• If the market price is $10, what is the extent of shortage or surplus?
• If the demand rises by  200  units at every price level,  what is the new equilibrium price?

2. Which of these goods is more price elastic in demand, holiday tours, or rice? Explain briefly.

3. (i) State the formula for calculating the price elasticity of demand.

(ii) The price elasticity of demand for good X equals 3. If the price was $12, and the quantity demanded was  20,000  kgs,  calculate the new quantity demanded due to a 10% fall in price.

Question 3

1. Mankind had invented and used many objects as money. Suggest: Explain the four functions of money.

2. Explain the FOUR important functions of a central bank.

Question 4

1. Unemployment can arise due to different causes. Explain the following causes of unemployment:

• Cyclical unemployment
• Frictional unemployment

2. Discuss TWO disadvantages of high unemployment to an economy.

Question 5

1. Write short notes on the following:

• Tariffs
• Economic union

2. Many small developing countries do not subscribe to the tenets of free trade and some continue to erect trade barriers. Why do they carry out a policy of protectionism? Give two possible reasons.