BBF104 Economics for Engineers

Lecturer Name : Ms Sia Beng Yen

Group Name : Anti-Social
Group Member : EDMUND TIEW SIEW JUN
141012218
LOW YONG WEI
142012833
WONG BENG SHENG
142013448
CHAN YUET NI
142013143
CHIN EDMON
142013143
WOO WOEN CHEN
141012344

Question 1(a)

Public Goods

Private Goods

Question 1(a)
Public Goods
Non-rivalry
- Beautiful scenic view
- National Defense
- Public safety

Non-Excludability
Air
Public Parks
Road
Knowledge

Private Goods
Rivalry
- Food
- Clothes
- Limited edition cards,
books, shirt

Excludability
Concerts
Museums
Talks
Car parts

Question 1(b)

Can

Can of
Sardin

Sardin

400

395

387

375

360

340

310

270

220

140

10

Question 1(c)
Opportunity Cost = Income Forgone = Working as
a office clerk
Year

Salary per month (RM) Annual Salary (RM)

2014

1,300

15,600

2015

1,500

18,000

2016

2,000

24,000

2017

2,200

26,400

Total income forgone (Opportunity Cost) =

RM84,000

Question 1(d)

Bachelor of Civil Engineering (Hons)

Type of Fees

4 Years (RM)

Tuition Fees

66,500

Insurance (4 years)

280

Others (Library, Student Club)

1,870

Total

68,650

Question 1(d)

Bachelor of Civil Engineering (Hons)

Starting salary for fresh graduate: RM2500
Annual Gross Income: RM30,000

Years of
experience

Salary per
month (RM)

Salary per
year (RM)

2,500

30,000

2,875

34,500

3,737.50

44,850

Project
Manager

3,737.50

44,850

5,232.50

62,790

Position
Civil
Engineering

Question 1(d)
Employee deductions
Gross
Salary
(per
month)

EPF

Incom
SOCSO e Tax

Total
deductio
ns (per
month)

2,500

275

12.25

287.25

2,875

317

14.25

331.25

3,737.50

412

14.75

24.85

451.6

3,737.50

412

14.75

24.85

451.6

5,232.50

583

14.75

181.85

779.6

Net
Salary
(RM)
2,212.7
5
2,543.7
5
3,285.9
0
3,285.9
0
4,452.9
0

Net
Annual
Salary
(RM)
26,553
30,525
39,430.8
0
39,430.8
0
53,434.8
0

As the monetary cost for a civil engineering degree is

RM68,650,
it takes around 3 years to earn back the cost of the
degree.

TOPIC 2

2(A)
DEFINE PRICE ELASTICITY OF DEMAND AND PRICE
ELASTICITY OF SUPPLY.

Price Elasticity of Demand

a measure of the relationship between a

change in the quantity demanded of a
particular good and a change in its price.

Price Elasticity of Supply

a measure to show the responsiveness, or

elasticity, of the quantity supplied of a good
or service to a change in its price.

2(B)
STATE THE FORMULAS FOR
CALCULATING THE PRICE
ELASTICITY OF DEMAND AND PRICE
ELASTICITY OF SUPPLY.

Price Elasticity of Demand

Price Elasticity of Supply

2(C)
USING NUMERICAL EXAMPLES,
SHOW HOW YOU CALCULATE THE
PRICE ELASTICITY OF DEMAND
AND PRICE ELASTICITY OF SUPPLY.

Price Elasticity of Demand

If the price of petrol increased from $130 to $140
and demand fell from 10,000 units to 9,900.

% change in quantity demanded

= -100/10 000 X 100%
= -1%
% change in price
= 10/130 X 100%
=7.7%
Therefore, Price Elasticity of Demand
= -1/7.7
=-0.13

Price Elasticity of Supply

When the price of a bottle of ink changes from $5
to $6 and the quantity supplied changes from 20
units per supplier per week to 30 units per
supplier per week.
% change in quantity supplied
= 10/20 X 100%
= 50%
% change in price
= 1/5 X 100%
= 20%
Therefore, Price Elasticity of supply
= 50/20
= 2.50

2(D)
SHOW BY WAY GRAPHS;
-PRICE ELASTICITY OF DEMAND EQUALS
1, GREATER THAN 1 AND LESS THAN 1.
-PRICE ELASTICITY OF SUPPLY EQUALS 1,
GREATER THAN 1 AND LESS THAN 1.

PRICE ELASTICITY OF DEMAND = 1

PRICE ELASTICITY OF DEMAND > 1

PRICE ELASTICITY OF DEMAND < 1

PRICE ELASTICITY OF SUPPLY = 1

PRICE ELASTICITY OF SUPPLY > 1

PRICE ELASTICITY OF DEMAND < 1