Reference no: EM132500468

1. Mary is a smart entrepreneur in her primary school. She sells ball points to her fellow school mates. At a price of $2.00 each, she sells 100. At a price of $1.50 each, she sells 300.

(i) Is Mary's demand elastic or inelastic over this price range?

(ii) If demand had the same elasticity for a price decline from $1.50 to $1.00 as it does for the decline from $2.00 to $1.50, would cutting the price from $1.50 to $1.00 increase or decrease Mary's total revenue?

2. Do you think the private market for medical care is producing at the socially Optimum level? Justify your answer. What should government do? (note: no need to draw a diagram for your answer). 

3.Explain how the following factors will affect the location of Malaysia production possibilities curve (note: no need to draw diagram for your answer) :

(i) Malaysia government has imposed a no work order on people except essential services for 6 months due to an outbreak of Corona virus.

(ii) US has decided to end trade war with China.

(iii) Much cheaper renewal energy price.