Institute of Business Management

Principle of Microeconomics
Semester Fall2021

Course Instructor: Irfan Lal Total Marks:100

Due Date:
Assignment No.1

Q#1 a) Define.
I) Economic, II) Scarcity & Choice III) law of demand.
b) Differentiate
I) Positive and Normative Economics II) Microeconomics & Macroeconomics
III) Command, Market and Mixed Economy

Q#2 Draw and explain circular flow diagram?

Q#3 Show how the demand curve for Cofee might be affected by the following
variables “Graph”
a) An increase in the price of coffee.
b) A decrease in the price of tea.
c) A decrease in consumers’ income
d) Increase in the price of sugar.
e) Consumers prefer to drink more cocoa rather than tea

Q#4 Show how the supply curve will be affected by the following factors “Graph”
a) Increase in car prices
b) Technological improvement in car production
c) Increase in wages