CONFIDENTIAL, BAVJAN 2018/EC0162/104 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE MICROECONOMICS COURSE CODE EC0162/104 EXAMINATION : JANUARY 2018 TIME 3 HOURS INSTRUCTIONS TO CANDIDATES 1. This question paper consists of two (2) parts: PART A (4 Questions) PART B (5 Questions) 2. Answer ALL questions from PART A and three (3) questions from PART B in Answer Booklet. Start each answer on a new page. 3 Do not bring any material into the examination room unless permission is given by the invigilator. 4. Please check to make sure that this examination pack consists of i) _ the Question Paper ji) an Answer Bookiet — provided by the Faculty a Graph Paper — provided by the Faculty 5. ‘Answer ALL questions in English. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 7 printed pages © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL, 2 BAJJAN 2018/ECO162/104 PARTA QUESTION 1 The following table shows the production possibilities combination in country M Combination | Book (Unit) | Muffin (Unit) | Opportunity Cost per unit of book | A 0 300 _ B 50 200 — @ 100 120 D 150 60 E 200 20 _| F 250 oO | a) Complete the table above and briefly explain the concept of opportunity cost. (3 marks) b) Sketch the production possibility curve. (2 marks) c) Calculate the opportunity cost by increasing the production of: i) book from point A to D. ii) muffin from point E to B. iii) 250 unit of book. (3 marks) d) State the type of opportunity cost faced by the country. Give reason to your answer. (2 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 3 BAVJAN 2018/ECO162/104 QUESTION 2 Table below shows hypothetical demand and supply schedule of Durian in the market. Price/kg (RM) Quantity demanded (kg) Quantity supplied (kg) 45 6 12 | 7 10 8 | 8 30 9 6 25 10 4 20 11 2 a) Using a graph paper, plot the demand and supply curves for durian. (2 marks) b) Determine the equilibrium price and quantity of durian. (1 mark) ©) Assume that the government gives subsidies to the durian’s producer so that the quantity supplied increases by 3 kg at every price level. Show the effect of the subsidies on the same diagram in (a). Determine the new equilibrium price and quantity. (2 marks) 4) Calculate the price elasticity of supply for durian ifthe price increases from RM25 to RMA0. (2 marks) e) Based on the answer in (d), state the degree of elasticity of supply. (1. mark) 1) The quantity demanded for Durian decreases from 50 units to 29 units as the income increases from RM3000 to RM4000. Calculate the income elasticity of demand for Durian. (2 marks) (© Hak Cipta Universit Teknologi MARA CONFIDENTIAL