BBBE 1033 ECONOMICS

MICROECONOMICS

TUTORIAL 2

1. August 2015/16

Describe the TWO (2) factors that can cause changes in the Production Possibilities
Frontier (PPF) of a country. (4 marks)

2. January 2016/17
Identify the effect on Malaysia’s production possibilities frontier curve for each of the
following events:

(i) Discovery of new oil fields in Kelantan. (4 marks)

(ii) New technology introduced in the electronics sector in Penang. (4 marks)

3. The table below shows efficient combinations of two goods, computers and cars that an
economy can produce:

Combination Computer (units) Car (units)

A 400 0
B 300 20
C 200 40
D 100 60
E 0 80

(i) Define production possibilities frontier (PPF). (3 marks)

(ii) Based on the table above, plot a PPF diagram for the economy. (3 marks)
(iii) Calculate the opportunity cost of producing 20 units of car. (3 marks)
(iv) Explain the type of opportunity cost faced by this economy. (2 marks)

4. Briefly explain any FIVE (5) factors that shift the demand curve. (10 marks)

5. Explain the difference between the ‘law of demand’ and the ‘law of supply’. (8 marks)

6. With the aid of a diagram, briefly explain the differences between ‘a movement along the
demand curve’ and ‘a shift in the demand curve’. (8 marks)