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Eco402 Assignment 1 Solution Fall 2022

ECO402 Assignment 1 Solution Fall 2022: Today we are sharing with you eco402 assignment 1 solution fall 2022 before creating your assignment read all the instructions carefully and follow all the rules. Make sure to upload the solution file before the due date on VULMS. Any submission made via email after the due date will not be accepted.


FORMATTING GUIDELINES:

  1. Use the font style “Times New Roman” or “Arial” and font size “12”.
  2. It is advised to compose your document in MS-Word format.
  3. You may also compose your assignment in Open Office format.
  4. Use black and blue font colors only.

The Case:

The rice sector in Pakistan is extremely important in terms of export earnings, domestic employment, rural development and poverty reduction. Rice is an important food as well as cash crop in Pakistan. It accounts for 3.0 percent of the value added in agriculture and 0.6 percent of GDP. After wheat, it is the second main staple food crop in Pakistan. Due to the impact of the recent flooding, in the FY 2022-23, rice production forecast is lowered to 8.3 million tons which means that this year export can be less at 4.3 million tonnes as compared to 4.8 million tonnes in FY 2021-22. Members of Rice Exporters Association of Pakistan (REAP) are of the view that government should provide support to all flood hit farmers across the country in order to cope up the current situation. Hypothetical data on price, quantity demanded and quantity supplied of rice in domestic market is given in the following table:

Price per Kg of rice (Rs.)

Quantity demanded of rice (tons)

Quantity supplied of rice (tons)

140

98,000

80,000

160

92,000

86,000

180

90,000

90,000

200

88,000

94,000

Requirements:

  • What is the equilibrium price and equilibrium quantity of rice in domestic rice market. Also show the market equilibrium graphically.
  • Calculate price elasticity of supply when price of rice is rupees 160.
  • What does the value of elasticity of supply calculated in part B represent?
  • Suppose government has given support to rice producers and as a result, numbers of suppliers of rice in domestic market are increased. Graphically analyze the impact of this situation on equilibrium price and equilibrium quantity of rice.

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Eco402 Assignment 1 Solution Fall 2022, Eco402 Assignment solution 2022.

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