Q. 1. List and briefly explain the three principles that questions that explain how the economy as a whole works?
Q. 2. What is comparative advantage? How does it explain the existence of trade between two nations?
Q. 3. Explain demand schedule and demand curve, and how they are related? Why does the demand curve slope downward?
Q. 4. You are given the following Functions:
Qd = 40-2P
Qs = 20 +3P
Find the following:
1- Find mathematically and graphically the Equilibrium price and Quantity?
2- If the price is 10 Riyal, what kind of surplus we will have and how much is it?
3- If the equilibrium price increased by one Riyal, what will be the quantity demanded?