problem 1:
Illustrate out with the aid of a diagram, the effect on the consumer’s equilibrium, of a raise in the price of commodity X while consumer’s money income and price of commodity Y remains unchanged.
problem 2:
If the government intends to restore the consumer’s current welfare to its original level, illustrate out how the process of income compensation would proceed to realise that objective.
problem 3:
Define and illustrate out, using diagrams, consumers’ surplus; producers’ surplus and total surplus that a society can derive from consumption and production of the good at a specific price.
problem 4:
Illustrate out why these surpluses are maximised at the equilibrium price and output only in a purely competitive market.
problem 5:
Illustrate out inflation and discuss its origin using Keynesian and Classical theories.
problem 6:
Illustrate out with diagram how can inflation occur in the economy with substantial unemployment of factors of production.
problem 7:
Comment on the effects of inflation in economy and the measures to control inflation.