BEC 3102 Principles of MicroEconomics
BEC 3102 Principles of MicroEconomics
BEC 3102 Principles of MicroEconomics
a) Using economic theory tools, clearly differentiate between the following terms; (10 Marks)
(i) List of want and scale of preference
(ii) A movement and a shift in the demand curve
(iii)Total utility and marginal utility
(iv) Microeconomics and macroeconomics
(v) Normative and positive economists
b) Discuss the factors that can influence the demand for a commodity in the market.
(10 Marks)
c) With the help of a diagram, explain what happens if the government set prices for a
commodity;
(i) Above the equilibrium price (5 Marks)
(ii) Below the equilibrium price (5 Marks)
Price 10 20 30 40 50 60 70 80 90
Quantity 90 80 70 60 50 40 30 20 10
Demanded
a) Using a well labeled diagram explain the relationship that exist between average total cost,
average variable cost and marginal cost. (12 Marks)
b) Explain the basic assumptions of the ordinal approach consumption theory. (8 Marks)
a) There exist situations where demand may slope upwards instead of downwards. Give
reasons for the existence of such demand curve. (6 Marks)
b) Using well labeled diagrams derive the demand curve using the indifference curve
approach. (10 Marks)
c) What are the properties of isoquant curves? (4 Marks)