( SI/é Question 1 [18 marks in total] 7 Assume a proxtuction quota is effectively imposed on tomato farmers, Explain, with the help of a diagram, how this policy affects the market price and market quantity of tomatoes, Make sure you bel yp agra cacy i ef tonal 4q ts ‘4 As. shawn te Vee disqi, the prodedion quote will Vecnease th saptlied “epuanlrt y of Comuters and mmontare Woe pace market Prove Question 2 [10 marks} You are the owner of a motorway café, located far from any other available convenient store selling coffee to drivers. Is the demand for coffee in your store price elastic or inelastic? Explain verbally e in a few sentences, e L : \nclakic, \ye cause \eve is we subskukes ail aw Vee ava. wotla Question 3 [10 marks] ~, / Consider the price elasticity of demand for tomatoes to be -4.6. If you were the owner of a store yf selling tomatoes, wishing to increase your revenues (ic earnings from selling tomatoes), should you increase or decrease the price of each kg of tomatoes you are selling? Explain your answer in not oon than 2-3 sentences. Decree pecosn the price: Because Ve \o al event Ulam | % Peo v widubu(Boed) weeny gree yrazimnize § when Question 4 [22 marks in total] The average monthly income in an area increases time, memberships in local health clubs increase by 30%. uy 4, S aneaate the income elasticity of demand. [12 marks] + — 4% Tepe 3 OV from 40,000AED to 44,000AED. At the same thee 2 #07 b. Based on your answer above, would you argue that membership in a health club is a normal or an inferior good? Explain your answer. [5 marks] Normal goo bs Because the elashishy, is @ t/ c. Based on your answer above, would you argue that membership in a health club is a basic or a luxury good? Explain your answer. [5 marks] \urury, gos 5 Because \\w clas off Bley ow