16. 17. 18. 19. 20. 21. 22. 23. Define supply schedule and the law of supply. What is the relationship between price and quantity supplied? Why is the supply curve upward sloping? Distinguish between a change in supply and a change in quantity supplied. Discuss the non-price determinants of supply that shift the supply curve and show graphically the effect of the following. a) Increase in wages and the prices of raw material that influences cost of production b) Technological progress c) Negative expectations of suppliers d) Increase in the number of suppliers Explain, with diagrams, the following a) Market equilibrium b) Market equilibrium price and equilibrium quantity c) Market surplus and market shortage With the help of diagrams, explain the effect of the following on equilibrium price and equilibrium quantity a) Supply increase and demand decrease b) Supply increase and demand increases c) Supply increases and demand increases d) Supply decrease and demand decrease e) Supply remains constant and demand increases f) Supply increases and demand remains constant What is price elasticity of demand? How is it measured? Explain the following graphically a) Bastic demand b) Unit elastic c) Inelastic demand d) Perfectly elastic e) Perfectly inelastic Distinguish between arc/midpoint elasticity and point elasticity 24. Suppose the demand schedule for CDs is as follows Price per CD (Pula) 8 7 6 5 Quantity demanded 1 2 3 4 4 5 3 2 1 6 7 8 a) b) c) d) 25. 26. Calculate the elasticity coefficient for each price change and quantity change. At what price(s) or price range is the demand elastic, unit elastic and inelastic? By using the above figures, draw the demand curve. What price would bring in the highest revenue to the seller? How would the price changes affect total revenue? When price of milk is reduced from P10 to P7 per litre in Gaborone city, milk purchased by Mrs. Doreen per week for her family has increased from 12 to 14 litres. Calculate price elasticity of demand for milk by using point elasticity and arc elasticity methods. Indicate whether the demand is elastic or inelastic. How do businesses and government use the concept of elasticity while fixing the price of a product or service and imposing taxes on people? 27. Discuss the factors that determine price elasticity of demand. 28. Define elasticity of supply and explain how it is measured? 29. Explain the following and give examples of products that are relevant for each: Immediate market Short run market Long run market