QUESTION 1

Marks

1. Economist can use two types of economic statements to engage with governments. Provide an example of both the statements and explain their purpose. 2 Marks
2. What are and why do firms have to address the three fundamental economic production questions?2 Marks
3. Explain two ways to increase the efficiency of each of the three factors of production.3Marks

QUESTION 2

1. It was noted that even with the increase in the supply of face masks, the price of face masks increased. Graphically represent and explain why?2 Marks

1. The increase in the demand for alcoholic drinks has lead the government to increase the tax on such drinks. Graphically represent and explain, with demand and supply graphs, the effect on the price and quantity in the market for alcoholic drinks. Hint: address all possibilities in your answer. 3 Marks

1. Using the demand curve and appropriate terminology, graphically represent how a decrease in price of a good resulted in you buying more units of it. Provide a reason why the drop in the price made you buy more units.2 Marks