Nigeria Student Forum

I realise some students are facing series of problems in solving certain topics in economics. With the knowledge I have, I'd be solving a few questions here. I'll try and make it as understandable as possible.

Note: I'll answer mathematical questions on my notebook, snap and then post it here, while theorical questions would be typed and posted.

As times goes, I'll try and bring people who are more knowledgeable in this field.

This thread is gonna help students prepare themselves for the upcoming jamb exam as I'll be solving a few questions from the past question. Feel free to ask or answer questions on this subject

ELASTICITY OF DEMAND

[i]Elasticity of demand may be said to be the degree of responsiveness of demand to changes in all factors that influences or affect demand. Does the definition make sense to you? Let me break it down. To what extend and at what rate do the consumers respond to changes that affect demand. Do they respond negatively or positively? I'd want you to go through the definition carefully. Read it word by word for better understanding.

There are 3 types of demand. They are:
1. Price elasticity of demand---Ed
2. Income elasticity of demand---Ed
3. Cross price elasticity of demand---EAB
-----Price elasticity of demand
It is simply the degree of responsiveness of demand to a change in price of the whole commodity or the ratio of a percentage change in quantity demanded to a percentage change in price. Confused?? It means, when the price of a commodity increases or decreases, how do consumers respond.


Types of price elasticity
1. Elastic---Ed>1 i.e if you solve your question and the answer you get is greater than 1, then your demand is elastic.
2. Inelastic---Ed

2.Inelastic---Ed

OK let me skip the long thing and move to the main thing.

The method to imply in solving elasticity of demand depends on the type of question given. As far as I know, there are four(4) ways to solve elasticity of demand and you solve according to the type of elasticity of demand.
1. Percentage method(the one I consider to be the best for waec candidates as it draws more marks).
2. Point method(best for jamb candidates. it's a very fast method of solving.
3. Arc method
4. Differential calculus method, which is the only method I'd be using today. This method can't be implied to solve all questions.

I'll be posting pictures of the methods

Here

Thumb up, sis! I believe that you're doing a great job there albeit, am not a student of economics.

Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the supply will be
A. The same as equilibrium supply
B. Greater than equilibrium supply
C. Less than the equilibrium supply
D. Determined later by government
E. None of these

Thanks *wink*

Question 1
Given a market demand and supply equation as:
Qd=20-3p
Qs=10+2p
Find the price elasticity of demand.

I'm gonna solve it using differential calculus method

Inferior goods are referred to in Economics as goods
A. Whose quality is low
B. Consumed by very poor people
C. Whose consumption falls when cunsumers' income rises
D. Which satisfy only the basic needs
E. None of the above

Sorry for the late response sir. I was writing the solution to the elasticity question.

Inferior goods are goods or commodities in which quantity demanded decreases as consumer money income rises and vice versa I.e consumers money income and quantity demanded are negatively related.
You should be able to answer the question with the definition

Obviously, the answer is C

C is the answer

Question 2

Qa=100-5Pa-3Pb
Qb=40-2Pa+0.5y
If Pa=#3, Pb=#4 and y=#300,
Calculate:
a.price elasticity of demand of commodity A.
b.income elasticity of demand of commodity B
c.cross elasticity of demand for commodity A with respect to the price of commodity B.

Someone should try the above question. There's no harm in trying.

The question is simpler than it looks. All you have to do is to think.
snap your solution and let's see