Question 1 and 2

1. Supply and Demand are economic terms describing market healthiness, examining the connection between consumers and producers and highlighting the willingness of producers to manufacture products in a market to meet a customer's need; it is anything that can be offered to a market to satisfy a customer's desire or need. Explain how the behaviour of customers and producers cause the markets to move towards equilibrium. Give some instances and a supportive diagram. 2. Externalities are generally viewed by economists as a serious problem that makes markets inefficient, leading to market failures. Externalities are the main catalysts that lead to the tragedy of the commons. (a) Discuss how externalities can cause inefficiencies in the market outcome by choosing any area or field you are familiar with as an example. (b) Explain the Malaysia government's policies towards externalities.The government is a major player in terms of taxation. The government collects tax revenue for the development of the country in order to finance the public education, health, infrastructure etc. With the aid of a diagram, explain how welfare without tax, welfare with tax and changes in welfare affect consumers and producers in the country.Goods can be classified by their consumption rivalry and ability to exclude non-payers. If the same unit of a good cannot be consumed by more than one person at the same time, the good is rival in consumption. Explain FOUR (4) different types of goods based on their rivalry and excludability. Provide your explanation with examples.A monopolist can exert market power because it can influence the price of its output and become the sole seller of a product or service without any close substitutes. (a) By giving an appropriate example, explain THREE (3) factors that become the cause of monopoly power. (b) Elaborate FOUR (4) ways how the policymakers can respond to the inefficiency of monopoly behaviour