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DIM1113- MICROECONOMIC
CLO 1 SECTION A
1
TN 1 1. B
1
TN 1 2. A
1
TN 1 3. A
1
TN 2 4. D
1
TN 2 5. B
6. A 1
TN 2
1
TN 2 7. B
1
TN 2 8. D
1
TN 3 9. A
1
TN 4 10. C
1
TN 4 11. D
1
TN 5 12. D
1
TN 6 13. B
1
TN 6 14. A
1
TN 6 15. D
1
TN 6 16. B
1
TN 7 17. A
1
TN 7 18. D
1
TN 7 19. A
1
TN 7 20. B

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SECTION C (ANY 4 QUESTIONS)
QUESTION 1

(a) The PPC shows the various possible combinations between 2 goods and services 2
produced within a specified time period with all its resources fully and efficiently
TN 1 employed. 1
1
(b) 1 marks given on : correct y and x axis, correct point, title, and smooth curve. 4

(c) 2
i. 30 million – 22 million = 8 million laptops 2
ii. 12 million – 0 = 12 million of laptops 2
iii. 4 million – 0 = 4 million of mobile phones
(d)
i. Not achievable, due to scarcity problem. This point is outside the PPC. 2
ii. PPC should shift to right through improvement in technology, increase in 2
resources and growth in population. (any 2)

(e) Show the point correctly (inside the PPC ). 1

Inefficiency. 1

TN2 QUESTION 2
PART A
Generally the amount demanded of good increases with a decrease in price of the good and vice
versa. In some cases, however, this may not be true. There are certain goods which do not follow 2
this law.
Student must explain any 2 of the following examples: Any 2
2x2.5mk
Giffen goods
A Giffen good describes an inferior good that as the price increases, demand for the product =10mk
increases.

Expectation of change in the price of commodity

If an increase in the price of a commodity causes households to expect the price of a commodity to
increase further, they may start purchasing a greater amount of the commodity even at the presently
increased price.

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Emergencies
During emergencies such as war or natural disaster, people will buy more goods even though the
prices of goods are high.

Highly –priced goods

Goods that consumer consider quality or superior goods. As such, consumer will buy more when
price is high and less when price is low.

Status symbol goods

They are product that buys by higher income people. Not for satisfaction but for luxury or to be
flaunted. Example antique goods, diamond, luxury cars.

PART B
(a)
PA1 = RM25 QdB1= 160
PA2= RM35 QdB2= 80 1

[Qd2 – Qd1 / Qd1 ] x [P1/ P2-P1] 1

2
(80-1600 / 160 ) x 25 / (35-25) = -80 / 160 x 25/10 = -0.5 x 2.5= -1.25

(b) The answer is negative . It is complementary goods 1

(c)
Y1 = RM1600 QdC1= 400 1
Y2= RM2000 QdC2= 200
1
[Qd2 – Qd1 / Qd1 ] x [Y1/ Y2-Y1]
2
(200-400 / 400 ) x 1600 / (2000-1600) = -0.5 x 4 = -2
1
(d) the answer is negative. So it is inferior / giffen goods.

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QUESTION 3
TN3

a.)

700
600
500
400 4
300
200
100
0
0 1,000 2,000 3,000 4,000 5,000 6,000

Quantity Demanded Quantity Supplied

(b) Price = RM400 1

Quantity =2000 kg 1
c. At price of RM500, quantity supply is more than demand , surplus will happen by 1700 3
kg. This will lead to the price decrease until it meet the equilibrium point. This known as
price floor .

d. when the price of rubber increases, the supply of tires will be decreasing because the cost 2
production is increase. The supply curve will shift to the left.

d. any 4 factors that influence the decreasing of rubber

4 x 2mk
1. Raining seasons
=8mk
2. Increase in cost of agriculture
3. Government imposed tax on rubber
4. Reduces in number of seller/ producer
5. Expectation of future price increases, the supply will reducing now.
6. Government reduces the subsidies.
(other relevant answers are acceptable)

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QUESTION 4
TN4
a.
Q TU TU TU fried MU/P MU/P MU/P
chicken hotdogs chicken burger hotdog fried
burger s chicken a.
0 0 0 0 0 0 0 30√ x 6mk
30
1 100√ 80√ 40√
20√ 16√ 10√
2 180√ 155√ 76√ = 6mk
16√ 15√ 9√
3 248√ 225√ 108√
13.6√ 14√ 8√
4 306√ 290√ 136√
11.6√ 13√ 7√
5 356√ 350√ 160√
10√ 12√ 6√
6 396√ 405√ 180√
8√ 11√ 5√
7 434√ 455√ 196√
7.6√ 10√ 4√
8 462√ 500√ 210√
5.6√ 9√ 3.5√
9 482√ 540√ 218√
4√ 8√ 2√
10 492√ 575√ 222√
2√ 7√ 1√

Question a Question b
b. b.
39√ x 8mk
Combination 1: 5(B) √ + 7(H) √ + 1(F) √ = 5(5) + 7(5) + 1(4) = 64 √
30
Combination 2: 6(B) √ + 9(H) √+ 3(F) √ = 6(5) + 9(5) + 1(4)= 79√
= 8mk

Raj will buy 5 units of burger, 7 units of hotdogs and 1 unit of fried chicken√
c. Raj will buy 6 units of burger, 9 units of hotdogs and 3 unit of fried chicken as it is 1
closest to RM80.
d. Utility is the satisfaction obtained from consuming a commodity. The 2
relationship between TU and MU are:
i. When TU is increasing, Mu is positive 1
ii. When TU is at maximum, MU will be zero 1
iii. When TU is decreasing, MU will be negative. 1

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QUESTION 5
PART A

TN5 5

PART B
29√ x 15
Output Average Average
Fixed Variable Average
Total cost variable total
cost cost fixed cost 29
(unit) cost cost

0 20√ 0 20 0 0 0
1 20 30√ 50 20.00√ 30.0√ 50.0√ = 15 mk
TN6
2 20 50√ 70 10.00√ 25.0√ 35.0√
3 20 66√ 86 6.67√ 22.0√ 28.7√
4 20 90√ 110 5.00√ 22.5√ 27.5√
5 20 130√ 150 4.00√ 26.0√ 30.0√
6 20 186√ 206 3.33√ 31.0√ 34.3√
7 20 250√ 270 2.86√ 35.7√ 38.6√
QUESTION 6
Students required to explain in detail each of the market structure with the following point:
(a) Monopoly
- One seller
2
TN7 - Unique product/ no close substitute
2
- Barrier to entry the market
2
- Can control the price ( with government intervention)
2
- Eg, electricity service
2

(b) Students required to explain in detail any 4 conditions below:

1. Existence of monopoly
2. Existence of different market for the same coomodity 4x2.5mk
3. Existence of different degrees of elasticity of demand = 10 mk
4. Cost of serating the market must be low
5. No resale
6. Legal sanction

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