Question1. Make a distinction between price, income and cross elasticity of demand.
Question2. How can the concept of the price elasticity be useful to owner of supermarket who wants to maximise sales revenue? Describe your reasoning, with the aid of suitable examples and diagrams.
Question3. Make a distinction, with the aid of diagrams and examples, between a firm’s fixed cost and variable cost.
Question4. Describe why all firms aim at growing big in size.
Question5. What are the causes of inflation in economy?
Question6. Illustrate the policy implications which the central bank will implement if there is excess liquidity in the market.
Question7. Illustrate the different kinds of unemployment that exist.
Question8. Illustrate the trade-off between unemployment and inflation.