Assignment Instruction

Assignment Title Assignment for ECON 260

Course Name Fundamentals of Microeconomics

Course Number ECON 260 Semester or Session Spring Year 2018

Instructor Dr. Mamdouh Ghanem Credit Hours 3

AssignmentValue 15 Marks

Assignment Due Date 24/03/2018

 Submit the assignment to the instructor through Moodle System by the

deadline date 24/03/2018.
Procedure for or where
 Use the file name specified by the instructor for the assignment
to submit work (including
[Ghanem ECON 260].
file name format for
 Provide a printed copy in class by the deadline date.
TurnItIn where
applicable)  College policy requires instructors to process all written assignments
through TurnItIn.
 One mark is deducted for each calendar day of late submission.

Expected Return Date 24/03/2018

The assignment focuses on demand and supply in the market

(international oil market) and their applications. The student will learn how
Description of to solve numerical problems related to an important concept in
Assignment Task microeconomics and try to analyze and take a perfect decision about
these problems.

2. Solve numerical problems related to the microeconomic theory.

Course Learning
Outcomes Assessed 3. Apply economic concepts to microeconomic issues and develop critical
thinking skills through analyzing economic issues.

Word or Page Limit [3 – 6] pages

Presentation Format
(e.g. MS Word MS Word document or PDF document
document)

Resources and Support Lectures of used textbook, College library, internet newspapers,
Available magazines, or other reference sources.

Revised: September 2015

 The instructor evaluates assignments and awards marks based on
the following criteria:

- Model answers is used to evaluate [CLO 2].

Evaluation Criteria - Rubrics is used to evaluate [CLO 3].

Peer or Self-Assessment
N/A
Required

After marking the assignment, the instructor reviews the work with
each student and discusses overall performance based on the
Feedback Details
evaluation criteria. The instructor uses a standard assignment
feedback form.

Revised: September 2015

 Assignment for ECON 260
INSTRUCTIONS:
Answer all the questions. Submit your answers on the Moodel System.

Suppose that you have been hired as an economic consultant by OPEC and given the
following schedule showing the world demand and supply for oil:

Price Quantity Demanded Quantity Supplied

($/barrel) (millions of barrels/day) (millions of barrels/day)
10 60 20
20 50 30
30 40 40
40 30 50
50 20 60

Your advice is needed on the following questions (use a diagram if it is needed):

Q1 (2 Marks) [CLO2]

What is the price and quantity of demand and supply in equilibrium situation? (Use a
diagram).

Q2 (3 Marks) [CLO 2]

Suppose the prevailing price is $20 per barrel then. Is there a shortage or a surplus in
the market? Why? What is the quantity of the shortage or surplus? What is your advice
to return to the equilibrium situation? (Use a diagram).

Q3 (3 Marks) [CLO 2]

Calculate the values of the price elasticity of both demand and supply for price changes
from $20 to $30 a barrel? Indicate whether demand and supply ware elastic or inelastic.
Why? (Use the midpoint formula).

Revised: September 2015

Q4 (2 Marks) [CLO3]

If the price raises from $20 to $30 a barrel, will the total revenue from oil sales increase
or decrease? Why. What is the evidence?

Q5 (2.5 Marks) [CLO 3]

Explain how it would be possible for the equilibrium price and equilibrium quantity to
both increase in the market for oil if consumer preference for oil increases and the
number of barrels of oil decreases.

Q6 (2.5 Marks) [CLO 3]

If the economic recovery leads the demand of oil to increase in the world, what will
happen to the equilibrium price, quantity, and total revenue from oil sales? What is likely
to happen to the incentive to sell oil?

Good Luck

Revised: September 2015