10.1.6 ECONOMICS 3: ASSIGNMENT 1 [100] QUESTION ONE [25] Critically discuss and evaluate the consumption function. Include in your answer the main factors that affect consumption. QUESTION TWO [35] Discuss and critically analyse the different types of market failures. QUESTION THREE [20] Assume the agricultural sector of an economy is severely affected by heavy rains. In particular, many wheat crops have been destroyed. Discuss, with the aid of a diagram, the type of inflation this can lead to. QUESTION FOUR [20] Critically examine the application of monetary policy in your country of residence.