1. Use a diagram discuss substitutional and income effect of inferior good

2.Suppose the utility function is specified as U(X1X2) =X1aX2b and the budget constraint is given as P1X1+P2X2=M state the consumer problem and derive the consumer ordinary demand function for X1 and X2.

3.Discuss the axioms of cardinal utility theory

4.It make economic sense to produce in stage one of production explain

5.What happen when the consumer's income increases on the budget line

6.Short run costs are incurred in the period during which factors inputs are variable explain

7.According to ordinal utility theory utility is measured subjectively using utilis. Justify

8.Discuss four assumptions of law of diminishing marginal returns

9.Discuss Edge worth box

10.Discuss the Slutsky substitution effect