a) Write short notes on the following fundamental concepts of microeconomics: (i) Scarcity and Choice (ii)...

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a) Write short notes on the following fundamental concepts of microeconomics: (i) Scarcity and Choice (ii) Opportunity cost (iii) Production possibility frontier (iv) Positive and normative economics (4marks) (2 marks) (2 marks) (4 marks) b) The following economic functions have been derived by the Finance Manager of the Kenya Tea Limited: Q=3P2-4P and Q = 24-p where P is Price and Q is Quantity Required: (i) Which of the two functions represents a demand curve, supply curve and why? (4 marks) (ii) At what values of price and quantity is the market in equilibrium? (5 marks) (iii) With the aid of a diagram, explain the effect on the demand and supply functions indicated in (i) above of a simultaneous decrease in cost of production and an increase in the price of a complementary good. (6 marks) a) Write short notes on the following fundamental concepts of microeconomics: (i) Scarcity and Choice (ii) Opportunity cost (iii) Production possibility frontier (iv) Positive and normative economics (4marks) (2 marks) (2 marks) (4 marks) b) The following economic functions have been derived by the Finance Manager of the Kenya Tea Limited: Q=3P2-4P and Q = 24-p where P is Price and Q is Quantity Required: (i) Which of the two functions represents a demand curve, supply curve and why? (4 marks) (ii) At what values of price and quantity is the market in equilibrium? (5 marks) (iii) With the aid of a diagram, explain the effect on the demand and supply functions indicated in (i) above of a simultaneous decrease in cost of production and an increase in the price of a complementary good. (6 marks)

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a i Scarcity and Choice Scarcity refers to the limited availability of resources relative to the unlimited wants and needs of society It forces individuals businesses and governments to make choices a... View the full answer