Question 1

Draw and explain an indifference curve diagram representing the intertemporal choice of a consumer over two time periods. What is the effect of an interest rate change in this case?

Question 2

Draw and explain a diagram representing a firm's decision about how much capital and labour to hire in the long-run using isoquants and isocost lines. What factors will affect the capital-labour ratio employed by the firm to efficiently produce the good?

Question 3

Discuss what is meant by the idea of 'thinkingatthe margins'. Why is this idea so crucial to economic thinking? Give examples of the importance of marginal thinking to good economic decisions

Question 4

What is meant by 'returns to scale'? Show how the concept can be illustrated in a diagram.

Section B - Please answeronequestion

Question 5

What are the possible reasons for the existence of an oligopoly and what are the benefits and costs of this market type? Illustrate with examples where appropriate.

Question 6

Analyse the standard microeconomic model of labour supply. What factors will determine the shape of the labour-supply curve?

Question 7

Analyse how preferences other than for an individual's own self-interest might be incorporated into the model of rational choice. Provide examples to illustrate your answer.