Answer the following questions;

29 (i) Explain the difference between the law of diminishing returns and the law of diminishing marginal utility. [2] (ii) Draw a marginal product curve for good X that you would expect from the laws of increasing and diminishing returns. Clearly indicate on the curve a region of negative marginal product. [1] (iii) Draw a marginal utility curve for good X that you would expect from the law of diminishing marginal utility. Indicate on the curve a region of negative marginal utility. [1] [Total 4] 30 Draw a diagram showing a profit maximising monopolist making supernormal profit at its profit maximising output. Ensure that the firm has constant average costs at all levels of output. Make sure that you include the following curves with the labels as in the parentheses: marginal revenue (MR), average revenue (AR), marginal cost (MC) and average cost (AC). Mark the price P1, quantity Q1 and average cost Cl. [4]31 Discuss the key factor that distinguishes monopolistic competition from perfect competition and the implications for the demand curve facing the individual firm in each market structure. 32 Explain the meaning of the following words when used in economics. (i) resources scarce (iii) allocation [Total 33 Explain how the introduction of the following controls will affect prices, quantity supplied and quantity demanded, and whether the outcome will be a surplus or a shortage of goods supplied. (i) A price ceiling set below the free market price. (ii) A price floor set above the free market price. 12 [Total 34 (i) Define "economies of scale" and "diseconomies of scale". (ii) List FOUR reasons for economies of scale