Question Three a) Discuss citing appropriate examples the concept of Dirnir shing Marginal Product (6 Marks) b) Illustrate the behaviour of a monopolist in the short run. (14 Marks) QUESTION TWO a) Using a well labeled diagram, explain the difference between substitution effect and income effect of an increase in price of a giffen good. (8 Marks) 1 b) A consumers direct utility function is given by U = X3X3 Vice Xi and X, vietivo goods. Let P and P, be the price of the iwo goods Xi and X2 respectively and M be the consumers income; (i) Find the corresponding uncompensated demand functions for the consumer. (5 Mails) (ii) Derive the indirect utility funclion of this consumer (2 Marks) falls to (iii) Suppose P. = Ksh. 20 and consumer has an initia of Ksh 1000 2 Ksh.15, how much compensation will be required to maintain consumer Calculate the substitution ad income effect of the price changes 15 viarks)