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Question 1
Consider an economy where rice is the staple food and the rice market is perfectly competitive. Initially the consumers paid the market equilibrium price for rice.
(a) Using a diagram for the rice market, analyse the market equilibrium, the consumer surplus and the producer surplus. Your diagram needs to have a proper shape of the demand and supply curve that correctly reflects the demand and supply elasticities.
(b) Analyse the possible impacts of the market price of rice on low-income households. What policies could the government implement to rectify the possible negative impacts? You need to suggest at least three different policies, explain how each policy works and discuss the pros and cons of these policies.
Analyzing and understanding data is an important part of decision making. Econometrics is defined as the statistical methods used to analyze data and make
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An electronic device is available that will reduce this year's labor cost by $10,000. The equipment is expected to last for 8 years. If labor costs increase at an average rate of 7% per year and the interest rate is 12% per year: What is the maximum ..
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