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# ECO402 Microeconomics Assignment 01 Fall 2020 Solution / Discussion

ECO402 Microeconomics Assignment 01 Fall 2020 Solution / Discussion

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ASSALAM O ALIKUM! SIR PLEASE SEND THE SOLUTION OF FIRST ASSIGNMENT

Hi, Dear

Please you mind sharing the solution. In case you are done already.
Your kind help will be much appreciated.

ECO402 Assignment 1 Fall 2020 Solution:

ECO402 Assignment 1 Fall 2020 Solution:

ECO402_Assignment_No_01_Solution_Fall_2020

Our main purpose here discussion not just Solution

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MICROECONOMICS (ECO402)

ASSIGNMENT # 01

DUE DATE: 10TH DECEMBER, 2020 MARKS: 15

# The Case:

Breakfast is often called ‘the most important meal of the day’. As the name suggests, breakfast breaks the overnight fasting period. It replenishes your supply of glucose to boost your energy levels and alertness. It also helps to provide other essential nutrients required for good health. Breakfast can help to better weight management, reduce risk of type 2 diabetes, and heart disease in the long term. Milk, eggs, and tea are commonly used in breakfast in Pakistan. Therefore, changes in the prices of these products have a major impact on the cost of living. The information about their nominal prices and CPI from 2018 to 2020 is giver below:

 Item Unit Year Nominal Price CPI Milk Liter Jun -2018 85.00 283.97 Jun -2019 90.00 296.50 Jun -2020 97.50 322.10 Eggs Dozen Jun -2018 83.13 182.83 Jun -2019 79.38 172.61 Jun -2020 115.63 229.01 Tea Packet Jun -2018 205.26 304.69 Jun -2019 221.05 322.11 Jun -2020 242.10 350.92

# Requirements:

Keeping in mind the above scenario, solve the following questions.

1. By assuming June-2018 as the base year, find the real price of milk, eggs, and tea in each
2. If the base year bundle has 10 liter milk, 3 dozen eggs, and 2 packets of tea then find the Laspeyres index by assuming June-2018 as the base year and June-2020 as the current

Marks: (9+6)

by using this formula we find out the real price

(CPI BASE YEAR /CPI CURRENT YEAR) MULTIPLY NOMINAL PRICE CURRENT YEAR

by using this formula we find out the Laspeyres

(CURRENT YEAR PRICE MUTIPLY QUANTITY)/(BASE YEAR PRICE MULTIPLY QUANTITY)MUTIPLY BY 100

Thank you so much for your kind help.

I'm a new student at VU, and an overseas Pakistani, that is why have no idea what is going on here. I hope we will be helping each other in the future. I have sent you a request please add me there. I want to send you the assignment I've made if you can check and help me out with that.

Regards,

Question 1

Milk June 2019 Rs 86.2

June 2020 Rs. 85.96

Eggs June 2019 Rs. 84.1

June 2020 Rs. 92.31

Tea  June 2019 Rs. 209.1

June 2020 Rs. 210.2

ECO402 Assignment 1 Fall 2020 Solution:

ECO402 Assignment 1 Solution Fall 2020

Solution  :

Formula  : (CPI base year/CPI current year)* nominal price current year

 Items unit years Nominal price CPI Real price Milk Liter June -2018 June-2019 June-2020 85.00 90.00 97.50 283.97 296.50 322.10 283.97/283.97*85.00=85.00 283.97/296.50*90.00=86.20 283.97/322.10*97.50=85.96 Eggs Dozen June - 2018 June-2019 June-2020 83.13 79.38 115.63 182.83 172.61 229.01 182.83/182.83*83.13=83.13 182.83/172.61*79.38=84.08 182.83/229.01*115.63=92.31 Tea Packet June-2018 June-2019 June-2020 205.26 221.05 242.10 304.69 322.11 350.92 304.69/304.69*205.26=205.26 304.69/322.11*221.05=209.10 304.69/350.92*242.10=210.21

Q .NO:  2

Solution  :

Formula : (current year price *quantity)/(Base year price * quantity)*100

 Items unit years Nominal price Real price Laspeyres Milk 10 liter Jun - 2018 June-2019 June-2020 85.00 90.00 97.50 85.00 86.20 85.96 (85.96*10)/(85*10)*100 (859.60/850)*100 1.01*100 101 Eggs 03 dozen Jun - 2018 June-2019 June-2020 83.13 79.38 115.83 83.13 84.08 92.08 (92.31*3)/(83.13*3)100 (276.93/249.39)*100 1.11*100 111 Tea 02 packet Jun - 2018 June-2019 June-2020 205.26 221.05 242.10 205.26 209.10 210.21 (210.21*2)/(205.26*2)*100 (420.42/410.52)*100 1.02*100 102

ECO402 Assignment 1 Fall 2020 Solution:

ECO402_Assignment_No_01_Solution_Fall_2020

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