DPB 1023-MICROECONOMIC

NAMA: MUHAMMAD HILMAN BIN MUHAMAD REZDUAN

(17DIB16F2006)
MOHAMAD NASRUL SHAH BIN MAHMUD
(17DIB16F2067)
MOHAMAD HAIQAL BIN MOHAMAD DIAH
(17DIB16F2010)
IKHWAN AIMAN BIN BAKAR
(17DIB16F2039)
MUHAMMAD AFIQ BIN JASMURI
(17DIB16F1072)

TAJUK: MIKROEKONOMI BAB 1 (PENGENALAN MIKRO)

PENSYARAH: PN.SARIMAH HANIM BT AMAN SHAH

KELAS: 2A
 GREENBOOK
1.Scarsity exist
A.when people consume beyond their needs
B.only in rich nations
C.in all countries of the world
D.only in poor nations.

2.Which of the following would eliminate scarsity as an economic problem

A.Moderation of peoples competitive instincts
B.discovery of sufficiently large new energy reserves
C.Resumption of the above because scarcity cannot be eliminated
D.None of the above because scarcity cannot be eliminated

3.Which of the following is not a resource

A.The owner of the company
B.Labor
C.Money
D.Capital

4.Economic is the study of

A.How to make money
B.How to operate a business
C.Money
D.Capital

5.Microeconomics approaches the study of economics from the view point of

A.An individual or specific markets
B.The operations of the Federal Reserve
C.Economy wide effects
D.The national economy

6.An economic theory claims that a rise in gasoline price will cause gasoline purchase to fall,
ceteris paribus. The phrase ceteris paribus means that.
A.Other relevant factors like consumer income must be held constant
B.the gasoline prices must first be adjusted for inflation
C.the theory is widely accepted, but cannot be accurately
D.Consumers need for gasoline remains the same regardless of price

7.Which of the following decisions must be made by all economies?

A.How much to produce? When to produce? How much does it cost?
B.What is the price? Who will produce it? Who will consume it?
C. What to produce? How to produce it? For whom to prodice it?
D.None of the above
8.Opportunity cost is the
A.Purchase of a good or a service
B.value of leisure time plus out-of-pocket cost.
C.Best option given up as a result of choosing an alternatives
D.undesirable sacrifices required to purchase a good.

9.Any point inside the production possibilities curve as in a

A.efficient point
B.non-easible point
C.inefficient point
D.maximum output combination

10.Using a production possibilities curve, unemployment is represented by a point located

A.along the curve
B.at the bottom corner of the curve
C.outside the curve
D.inside the curve

11.Along a production of possibilities curve, an increase in the production of one good can be
accomplished only by
A.decreasing the production of another good
B.increasing the production of another good
C.holding constant the production of another good
D.producing at a point on the corner of the curve

12.Education and training that improves the skill of the labor force are represented on the
production possibilities curve by a
A.movement along the curve
B.inward shift of the curve
C.outward shift of the curve
D.movement toward the curve from an exterior point

13.A nation can accelerate the economic growth by

A.reducing the number of immigrants allowed into the country
B.adding to its stock OF capital
C.printing more money
D.imposing tariffs and quotas on imported goods

14.Conventional and Islamic economic system are common in the sense that both of the
system
A.are to ensure welfare
 B.will ensure efficient combinations of inputs at a minimum cost
C.are to achieve economics profits
D.have the same guideline on the payments to the factor of production.

15.The basic foundation of Islamic economics that refers to the responsibility of man in
purifying his wealth according to the rule of Islam is
A.Rububiyyah
B.Khilafah
C.Tazkiyyah
D.Ukhwah

16.The following are the advantages of a socialist economy except

A.it promotes social justices
B.it ensures full employment
C.it ensures efficiency in the use of resources
D.it ensures the stable prices

17.The basic economic problem are:

A.what to produce, how much and for whom
B.where to and when to produce
C.what to produce and why
D.what is the purpose of producing and for whom

18.In planned economy, the economic problems are solved b;

A.the pattern of consumer expenditure
B.the price mechanism
C.the actions of the producers
D.the command of the ruling party

19.Which of the following does not illustrate opportunity cost?

A.If I study today, I must give up going for the football game
B.If I spend more on clothes, I must spend less on food
C.If I buy a computer, I must do without a 35 television
D.More consumer spending now means more spending in the future.

20.The rizk concept in Islam means:

A.heavenly gift
B.governments contribution
C.wealth inherited
D.totally ones own effort
21.In a production possibilities diagram, efficient ,management of resources is shown by
A.movement from outside of the curve to a point on the curve
B.All the point on the curve
C.Change in the slope of the curve
D.The point inside the curve

22.All of the following will shift the production possibilities curve outward except;
A.advancement of technology
B.an increase in the amount of resources
C.political instability
D.an increase in the quality of labour

23.An economic system where all the basic economic problem are solved through market
mechanism is called
A.capitalist economy
B.socialist economy
C.mixed economy
D.Islamic economy

24. The basic philosophic foundation of Islamic economics that refers to the role of Man as a
trustee of economic resources is
A.Tazkiyyah
B.Ukhwah
C.Rububiyyah
D.Khalifah

25.An economy is usually described as a mixed economy, if production is

A.Determined partly by the market mechanism and partly by the government
B.determined partly by the decisions of households and partly by the decisions of firms
C.made up partly of agriculutural goods and party manufactured goods
D.partly for thee domestic market and partly for export

26. Solar energy will emerge as the main source of energy future. At the moment it is not
cost-effective to commercializie it. From Islamic perspective, this statement suggest that
A.Resources are facing depletion if man is greedy using it. The main reason why we study
economic is
B.Resources are not scarce but human knowledge is
C.Resources have to be fully utilized due to the non-scarce concept
D.Man and environment have close relationship and are created to complement each other
 WORKBOOK

1. Microeconomics is NOT concerned with

A.the distribution of good among households
B.the size of aggregate money in the economy
C.the quantities of each goods produced
D.the allocative function of change in relative price
Answer: B. the size of aggregate money in the economy

2. Mixed economy refers to an economy which has both

A.firm and household decision making and government decision making
B.bussineses and households
C.product and factor market
D.market and non-market sectors
Answer: A. .firm and household decision making and government decision making

3. The following statement are related to Islamic economics EXCEPT

A.maximizing consumer utility and social welfare
B.consumation and sustainable development
C.social justice and social charity
D.maximizing producer profit at all cost
Answer: D. maximizing producer profit at all cost

4.The concept of Al-Falah refers to

A.the role of men as the vicegerents of Allah s.w.t. to whom economic resource are entrusted
B.purifying and cleansing ones soul and wealth through waqf, zakat, and sadaqah
C.the blessings of Allah s.w.t. which ensure ones happiness in this world as well as in the
hereafter
D.the belief and understanding that Allah is the Creator, the Lord, the Sovereign, the
Sustainer and the Giver
Answer: C. the blessings of Allah s.w.t. which ensure ones happiness in this world as
well as in the hereafter

5.Private ownership of resources and the use of price mechanism to solve the basic economic
problem are the characteristic of
A.Capitalism
B.The Command Economy
C.Mixed Economy
D.Socialism
Answer: A.Capitalism

6.The economic problem of scarcity refers to

A.unlimited want and unlimited resources
B.;imited wants and limited resources
C.limited resources and unlimited wants
D.limited wants and unkimited resources
Answer: C. limited resources and unlimited wants

7.The fundamental problem of economics is:

A.the law of increasing opportunity costs
B.the scarcity of resources relative to human wants
C.how to get government to operate efficiently
D. how to create employment for everyone.
Answer: B.the scarcity of resources relative to human wants

8.Which of the following are the principals of Islamic Economic System

i. a balance between private ownership and public ownership of resources
ii. regulated or limited economic freedom
iii. a need for government intervention
A.i only
B.ii only
C.i and ii
D. I, ii and iii
Answer: D. I, ii and iii

9.In a capitalist economy

A.consumer can never be sovereign
B.markets can never be competitive
C.the government owns the means of production
D.there is a reliance on the market system
Answer: D.there is a reliance on the market system

10.Which of the following is NOT a factor of production?

A.Money
B.Land
C.Labor
D.Capita
Answer: A. Money
11.Which of the following is the scarce resource?
A.Land
B.Labor
C.Entrepreneurship
D.All of the above
Answer: D.All of the above

12.Opportunty may be defined as the

A.goods and service that are foregone in order to obtain something else
B.dollar process paid for final goods and services
C.dollar cost of producing a particular product
D.diffrence between wholesale and retail prices
Answer: A.goods and service that are foregone in order to obtain something else
13.Which of the following events would allow the production possibilities curve to shift
outward?
A.the economys capital stock grows
B.technology imporves
C.more women enter the labor force
D.all of the above
Answer: D.All of the above

14..Figure 1: Production Possibilities Curve

In figure 1, if an economy is currently producing on PP2, which of the following would shift
the production possibilities curve towards PP1?
A.an decrease in quantity of labor available
B.an decrease in quantity of capital available
C.an increase in the level of unemployment
D.an advancement in technology
Answer: B. an decrease in quantity of capital available
 WORKBOOK

If the statement is true, tick () and if the statement is false, tick (X)

Question Statement True False

1 Microeconomics is concerned with the overall view of X
operations in the economic system.
2 A product is said to be scarce if the total amount needed by the X
society exceeds the total amount that the society can obtain free
of charge.
3 When you make a decision to study principles of economics,
you can incur opportunity cost.
4 In drawing a production possibility curve (PPC),several
asssumptions are made such as only two goods are produced
and there are no addition in factors of production while the
level of technology is stagnant.
5 A production point outside the production possibility frontier
might be a possible production combination once additional
resources or new technology is introduced.
6 The decreasing opportunity cost causes the production
possibility curve to have a concave shape.
7 An illustration of opportunity cost shows that an economy can
produce more consumer goods and more capital goods at the
same time.
8 Scarcity occurs when our unlimited needs exceed the ability to
fulfil them due to limited resources
9 Finished goods are goods used by consumers to produce other X
goods or for specific purposes.
10 Where to produce is considered an economic problem X
Give short answers and provide examples where necessary .
1. Distinguish between microeconomics and macroeconomics.

MICROECONOMIC
Studies that behaviour of an individual
decision making unit such as a firms
decision in the market,how an individual
uses his/her income to maximise
satisfacation,and how the price of each
commodity in the market is affected by
demand and supply
Studies how individuals,households and
firms make decisions to allocate limited
resources,typically in markets where
goods or services are bought and sold
Looks into why people interact and
participate in a market
MACROECONOMIC
Deals with aggregate economic
decisions or behaviour of an economy as
a whole for example the problem of
inflation level of unemployment and the
balance of payment deficit
Deals with the performance,structure
and behaviour of a national or regional
economy as a whole
Deals with the bigger pricture. It looks
into the effects of a governments
actions on the economy.

2. Explain the concepts below with examples:

Scarcity
Can be explained as wants that are exceeding limited resources to satisfy
them. The needs or wants are unlimited but the world has limited resources of
production. Eg: Naim syukri has RM 200,000 and he would like to open two
new businesses,a restaurant and abookstore. But he can only open one
because his capital is not enough to support two. In this case, the captal is a
scarcity.
Choice
When there is scarcity,choices have to be made. Not everyone can have what
he or she wants , so they have to make a choices from the available
alternatives. Individuals,firms and governments make decisions to choose
from many alternatives.eg : Naim Syukri can make a choice to either open a
restaurant or booktstore to satisfy his needs.
Opportunity cost
The cost of one choice in terms of the best forgone alternative. If you cannot
obtain what you need,then you have to choose among the alternatives. The
alternative that you choose not to do is the cost of the thing that you choose to
do. Eg: Naim Syukri chooses the bookstore,then the restaurant is the
opportunity cost because it is the second best alternative which he has to
forgot.
 Calculation Questions

Production possibilities factors schedule

Clothes

14 A
12 B
FOP Clothes Foods
10 C A 14 0
B 12 5
C 10 7
5 D D 5 10
E 0 12

Foods
5 7 10 12

Based on the figure above,calculate the:

a. Opportunity cost of producing two additionals unit from point A to B

Point A to B is = decrease in the quantity produced for one good

Increase in the quantity produced of another good

OP = 14-12
5-0

OP = 2/5
OP = 0.4

b. Opportunity cost of producing two additional units from point B to C

 Point B to C = decrease in the quantity produced for one good
Increase in the quantity produced of another good
OP= 12-10
7-5
OP= 2/2
OP= 1

c. Opportunity cost of producing five additionals units from point D to E

Point D to E = Decrease in the quantity produced for one good

Increase in the quantity produced of another good

OP= 5-0
12-10
OP= 5/2
OP= 2.5
 TEXTBOOK
1. Economic is defined as
A. Study of social science that studies mans behaviour in the distribution of limited
factors of production
B. A study of the behaviour of individuals in the determinantion of the optimum level of
production at the minimum cost
C. The science of wealth in a community focussing on the distribution of factors of
production and income
D. A study of socials science that focuses on behaviour of indviduals in the allocation of
limited production factors to fulfil unlimited wants

2. Opportunity cost is defined as

A. The cost of the second best option that will have to be forgone in order to select the
best option
B. The fixed cost involved in the short term
C. The cost of using a factor of production
D. The cost related to the optimum level of production

3. Which of the following services is not available in a free market economy?

A. Educational services
B. Transportation services
C. Defence services
D. Medical services

4. In a free market economy,the production resources are allocated through

A. The power of supply and demand in the market
B. The price mechanism and government intervention
C. Production of profitable goods
D. Planning by firms and government intervention

5. In a centrally planned economy,the problem of for whom a good should be produced

is solved by
A. Rationing
B. Market mechanism
C. Market factors
D. Consumer purchasing power

6. In a mixed economy,the problem of how much a good should be produced is solved

by
A. Market mechanism
B. Market mechanism and government intervention
C. Production of public goods
D. The quantity of factors of production in the economy

7. An economy reaches production effiency when

A. Production of a good can be increased without reducing the production of another
good
B. Production of a good cannot be increased without reducing the production of another
good
C. Economic resources cannot be fully utilized
D. Goods are produced in sufficient quantities to fulfil all consumer needs

8. The figure below shows a production possibilities curve for the production of good X
and good Y.The points that indicate achievable production levels are points

Good Y

G
F
K

M Good X

A. P and M
B. F,G and K
C. P,F and M
D. F,M and G

9. Of the following which is not a merit of free market economy?

A. Economic decisions are made quickly
B. Economic efficiency is achieved
C. Developments in technology and innovation are encouraged
D. Social welfare is prioritised

10. Government intervention is necessary in the economy because

A. The government wishes to overcome weakness in the free market economy
B. The government has power of monopoly
C. The government has interests in the specific sector
D. The government wishes to share profits with the private sector
 TEXTBOOK

1 Macroeconomics focuses on aggregate variables such as True

nastional income,employment and inflation
2 A product is said to be scrace if the total amount needed by true
the society exceeds the total amounts that the society can
obtain free of charge
3 When you make a decision to study principles of economics True
you incur opportunity cost
4 In the free market economy, all economy decisions are true
determined by demand and supply
5 In centrally planned economy,production resources are false
owned by individuals
6 The decreasing opportunity cost causes the production false
possibility curve to have a concave shape
7 Capitalism is also known as free market or laissez-faire true
8 Scarcity occurs when our unlimited need exceed the ability to true
fulfill them due to llimited resources
9 Finished goods are goods used by consumers to produce other false
goods or for other specific purposes
10 Inferior goods are goods required by the consumer for a false
comfortable

ESSAY

1. Explain 4 factors of production in an economy

land
Is a naturally occuring resource (free gift of nature). it exist independent of human action
labour
The physical and intellectual services provided by man
capital
Capital consists of assets such as money,equipment,machinery,and raw materials
entrepreneurship
Is a person with the skills and ability to organize production and bear risks.
2. Define a production possibilities curve and the assumptions used to explain the
production possibilities curve
A curve that shows the maximum production limits of two goods produced simultaneously by
a country at a fixed level of technology and limited quantities of factors of production.
Assumptions:
The economy achieves full employment
The economy only produces two types of goods
3. Discuss the 4 basic economic problems.
What goods and services should be produced
What quantity of goods and services should be produced
How goods and services should be produced
For whom should goods and services be produced

CALCULATION

1. the table shows the various combinations of maximum output for good X and good Y that
can be produced simultaneously by an economy at a certain level of technology.

combination Good X (units) Good Y (units)

1 0 50
2 10 48
3 20 43
4 30 36
5 40 28
6 50 14
 7 58 0

A) Using graph paper draw the production possibilities curve for the production for good
X and good Y

B) Calculate the opportunity cost to produce

i) 25 units good X iii) 40 units good Y
50-40=10 units of goods Y 58-25=33units of goods X
ii) 45 units good X iv)20 units good Y
50-21=29 units of goods Y 58-46=12 units of goods X

C) assuming there is advancement in production technology for good Y,the subsequent

increase in production of good Y is as below:
Combination Good X (units) Good Y (units)
A 0 60
B 10 58
C 20 55
D 30 49
E 40 40
F 50 26
G 58 0
Draw the new production possibilities curve on the same sheet of graph paper as for question
(b)
=Refer to the graph in (b)

E) calculate the opportunity cost to produce:

i)25 units of Good X iii) 40 units good Y

60-52=8 units of goods Y 58-40= 18 units of goods X
ii)45 units of good X iv) 20 units good Y
60-33=27 units of goods Y 58-52=6 units of goods X