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

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SECTION C (ANY 4 QUESTIONS)
QUESTION 1

a.

PPC
350 4
300
Aic conditioner

250 N
200
150 M
TN 1
100
50
0
0 5 10 15 20 25 30
Fan

b. assumptions
- the resources are fully and efficiently employed 1
- The amount of resources are fixed 1
- The technology are no improvement (fixed0 1

c.
i. 300-220 – 80 air conditioner 2
ii. 160-90 = 70 air conditioner 2
iii. 25 unit of fan 2

d.
i. this point is inside the PPC . It is attainable but not efficient because not fully utilize the 3
resources. (waste of resources)

ii. This point is outside the PPC. It is not attainable because not enough resources. (scarcity) 3

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QUESTION 2
TN2
PART A
Any 4 non-price determinates of demand: (answers must be with explanation & example)

- Income – income increase, demand also increase and vice versa 4x2.5mk
- Change in taste / preferences – popular / trending product , demand will increase. =10 mk
- Festival season – certain product for festival, example Baju Kurung during Hari
Raya, demand will increase.
- Price of substitute good increase, demand for product will increase.
- Price of complementary goods , demand for product will decrease.
- Consumer’s expectation of future price increase, demand for good will increase
now.
- Population increase, demand also will increase.

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.)
10
8
6
280
4 5
550
2
0
0 100 200 300 400 500 600

(b) Price = RM10 1

Quantity =1600 kg 1

c. i. At price of RM8, quantity demand is more than quantity supply, shortage will happen 4
by 1400 kg. This will lead to the price increase until it meet the equilibrium point.

c. ii . At price of RM12, quantity supply is more than demand , surplus will happen by 1300 4
kg. This will lead to the price decrease until it meet the equilibrium point.

d. any 3 factors that make supply shift to right (increase)

3 x 2mk
1. Durians seasons
=6mk
2. Increase in number of sellers
3. Cost of agriculture production reduces
4. Subsidies given by governments
(other relevant answers are acceptable)

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QUESTION 4
TN4
The price of Chocolates is RM0.50, and the price of Ice-cream is RM1.00.

Q TU TU MU MU MU/P MU/P
Chocolates Ice-creams Chocolates Ice-cream Chocolate Ice-cream
1 10 25 10=10 25=25 10/0.5=20 25/1=25
2 18 40 18-10=8 40-25=15 8/0.5=16 15/1=15
3 25 53 25-18=7 53-40=13 7/0.5=14 13/1=13
4 30 63 30-25=5 63-53=10 5/0.5=10 10/1=10
5 34 68 34-30=4 68-63=5 4/0.5=8 5/1=5
6 37 71 37-34=3 71-68=3 3/0.5=6 3/1=3
7 39 73 39-37=2 73-71=2 2/0.5=4 2/1=2
8 40 74 40-39=1 74-43=1 1/0.5=2 1/1=1
(a) 4mk (a) 4mk (b) 4mk (b) 4mk

b) The combination that maximize utility are:

 4 Chocolates and 4 Ice-creams (1mk)
 8 Chocolates and 7 Ice-creams. (1 mk)

(c) 4 X RM0.5=RM2 + 4 x RM1 = RM4 = RM6 (0.5 mk)

8 x RM0.5=RM4 + 7 x RM1 = RM7 = RM11 (0.5 mk)
So, 4 Chocolates and 4 Ice-creams. (1 mk)

QUESTION 5

TN5 PART A

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QUESTION 5

Law diminishing marginal return states that as more variables input is used, with other 1
technology and input remaining fixed, the marginal product of the variable input will 1
eventually decline.
This will happen in stage 2 in production stages as both Average product and marginal
1
product of the variable factors drop continuously. this is the most efficient stage of
1
production as the combination of inputs are fully utilized.
1

PART B
√=1mk
Variable Total Average Average
Cost Cost Fixed Cost Variable Cost
Units

(VC) (TC) (AFC) (AVC)

TN6 0 0 200√ 0√ 0√
1 60 260√ 200√ 60√
10
2 80 280√ 100√ 40√
3 90 290√ 66.67√ 30√
4 100 300√ 50√ 25√

QUESTION 6
TN7
Students required to explain each of the market structure with the following point:
(a) Perfectly competitive market
- Large number of seller Any 4
- Sell homogeneous product (1.25 mk
- Very easy to enter the market each)
- No control over price = 5 mk
- Eg product wheat, corn

(b) Monopoly
- One seller Any 4
- Unique product/ no close substitute (1.25 mk
- Barrier to entry the market each)
- Can control the price ( with government intervention) = 5 mk
- Eg, electricity service

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(c) Monopolistic competition
- Large number of seller
- Selling differentiated product Any 4
- relatively easy to enter the market (1.25 mk
- non-price competition each)
- incurred selling cost – advertising is important = 5 mk
- Eg closthes, shoes, handbag

(d) Oligopoly Any 4

- Few seller (1.25 mk
- Selling homogeneous or differentiated products each)
- Mutual independence among the rivals = 5 mk
- Has some barriers to entry.
- Eg. Cigarettes, automobile, petroleum.

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