EGERTON UNIVERSITY

NJORO CAMPUS/NTCC CAMPUS

ECON 100/111 ASSIGNMENT 2 THURSDAY 2ND NOVEMBER, 2023

1. “An increase in price reduces quantity demanded, while a fall in demand reduces
prices” Non economists may find this statement contradictory. As a budding
student of economics, explain, in a hundred words or so, the apparent
contradiction in the statement above. Use diagram(s) as appropriate.

(10 marks)

2. Given the following functions:

20𝑝 + 9𝑞 − 525 = 0

15𝑝 − 4𝑞 − 340 = 0

i. Indicate, with reasons, which is the supply function and which is the demand
function. (5 marks)
ii. Calculate the equilibrium price and the equilibrium quantity. (5 marks)

3. On Tuesday March 23rd, 2021, Machakos Governor tweeted thus: “NIKUBAYA: All our
Machakos Level 5 hospital’s 15 ICU beds & additional 12 HDU beds (Total 27) full
with SEVERE Covid patients. All Machakos 42 ICU/HDU beds with oxygen points also
full. People are waiting for others to die to get a bed. MASK, avoid BARS, be WISE.
HAKUNA VITANDA.” Required: Given that there were patients with diseases other
than COVID-19, explain, in at most 100 words, the opportunity cost of the COVID 19
pandemic, mindful of Governor Mutua’s tweet above. (10 marks)

Submission time: Friday 3rd November, 2023, 1200hrs

Email: oyuginyanjong@gmail.com
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