FAKULTI PERNIAGAAN DAN PENGURUSAN

COURSE:

MICROECONOMICS (ECS10203)

GROUP 5

GROUP ASSIGNMENT 2 (A)

PENSYARAH:

NORAZLINA BINTI ABDULLAH

DISEDIAKAN OLEH:

NAMA NO MATRIK

MUHAMMAD RAFIQIN AKMAL BIN MOHD ZAIKANI 077186

MOHAMAD ALIF AIMAN BIN ROSLI 079273

MUHAMMAD RIZAL BIN CHE MOOD 079260

MUHAMMAD NASRUDDIN BIN MOHAMAD ZAID 078579

 QUESTION

Question 1
a. A consumer has a income of RM3000. Pepsi cost RM3 per bottle and ice cream costs RM6
per box. Draw the consumer's budget constraint. What is the slope of this budget constraint?

b. Draw a consumer indifference curve for Pepsi and ice cream. Describe and explain four
properties of these indifference curves.

c. Show a consumer's budget constraint and indifference curve for Pepsi and ice cream. Show
the optimal consumption choice. If the price of Pepsi is RM3 per bottle and the price of ice
cream is RM6 per box, what is the marginal rate of substitution at this optimum?

d. The price of ice cream rises from RM 6 to RM10, while the price of Pepsi remains RM 3 per
bottle. For a consumer with a constant income RM3000, show what happens to consumption of
Pepsi and ice cream.

Question 2

a. Compare the following two pairs of goods.

i. Coke and Pepsi

ii. CDs adn CD player

In which case do you expect the indifference curve to be fairly straight, and in which case do
you expect indifference curve to be very bowed? In which case will the consumer respond more
to a change in the relative price of the two goods.

Question 3

Ali consumes only strawberry jam and crackers.

a. Could strawberry jam and crackers be inferior goods for Ali? Explain.

b. Suppose that straberry jam is a normal good for Ali while crakers are inferior good. If the
price of strawberry jam falls, what happen to Ali's consumption of crackers? What happen to
his consumption of strawberry jam? Explain.
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