Fundamentals of Microeconomics
BQOE II FUNDAMENTALS OF MICROECONOMICS
Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen
Project Directors:
Prof. Dr. Mansor Fadzil Prof. Dr. Shaari Abd. Hamid Open University Malaysia Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen Universiti Utara Malaysia Wan Azman Saini Wan Ngah Universiti Putra Malaysia Lilian Kek Siew Yick Open University Malaysia
Module Writers:
Moderators:
Translated & Edited: Pearson (M) Sdn. Bhd. Compiled by: Desktop Publishing: Printed by: Lilian Kek Siew Yick Open University Malaysia Univision Press Sdn. Bhd. Meteor Doc. Sdn. Bhd. Lot 47-48, Jalan SR 1/9, Seksyen 9, Jalan Serdang Raya, Taman Serdang Raya, 43300 Seri Kembangan, Selangor Darul Ehsan
First Printing, Copyright @ Open University Malaysia (OUM), BQOE II All rights reserved. No part of this work may be reproduced in any form or by any means without the written permission of the President, Open University Malaysia (OUM). Version December 2008
Table of Contents
Course Guide TOPIC 1 INTRODUCTION TO ECONOMICS 1.1 The Scope and Method of Economics Studies 1.1.1 Economic Method 1.1.2 Microeconomics and Macroeconomics 1.2 Scarcity, Choice and Opportunity Cost 1.2.1 Problems of Scarcity 1.2.2 Choice and Opportunity Cost 1.3 Production Limitations 1.3.1 Production Possibility Table 1.3.2 Production Possibility Curve 1.4 Basic Economic Questions and Economic Systems 1.4.1 Basic Economic Questions 1.4.2 Economic Systems 1.5 Circular Flow of Income and Expenditure Summary Tutorial Question DEMAND, SUPPLY AND MARKET EQUILIBRIUM 2.1 Demand 2.1.1 Law of Demand 2.1.2 Demand and Quantity Demanded 2.1.3 Demand Determinants 2.1.4 Individual Demand and Market Demand 2.2 Supply 2.2.1 Law of Supply 2.2.2 Supply and Quantity Supplied 2.2.3 Supply Determinants 2.2.4 Individual Supply and Market Supply 2.3 Market Equilibrium 2.3.1 Equilibrium, Surplus, and Shortage 2.3.2 Change in Market Equilibrium 2.4 Market in the Form of
Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen
Project Directors:
Prof. Dr. Mansor Fadzil Prof. Dr. Shaari Abd. Hamid Open University Malaysia Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen Universiti Utara Malaysia Wan Azman Saini Wan Ngah Universiti Putra Malaysia Lilian Kek Siew Yick Open University Malaysia
Module Writers:
Moderators:
Translated & Edited: Pearson (M) Sdn. Bhd. Compiled by: Desktop Publishing: Printed by: Lilian Kek Siew Yick Open University Malaysia Univision Press Sdn. Bhd. Meteor Doc. Sdn. Bhd. Lot 47-48, Jalan SR 1/9, Seksyen 9, Jalan Serdang Raya, Taman Serdang Raya, 43300 Seri Kembangan, Selangor Darul Ehsan
First Printing, Copyright @ Open University Malaysia (OUM), BQOE II All rights reserved. No part of this work may be reproduced in any form or by any means without the written permission of the President, Open University Malaysia (OUM). Version December 2008
Table of Contents
Course Guide TOPIC 1 INTRODUCTION TO ECONOMICS 1.1 The Scope and Method of Economics Studies 1.1.1 Economic Method 1.1.2 Microeconomics and Macroeconomics 1.2 Scarcity, Choice and Opportunity Cost 1.2.1 Problems of Scarcity 1.2.2 Choice and Opportunity Cost 1.3 Production Limitations 1.3.1 Production Possibility Table 1.3.2 Production Possibility Curve 1.4 Basic Economic Questions and Economic Systems 1.4.1 Basic Economic Questions 1.4.2 Economic Systems 1.5 Circular Flow of Income and Expenditure Summary Tutorial Question DEMAND, SUPPLY AND MARKET EQUILIBRIUM 2.1 Demand 2.1.1 Law of Demand 2.1.2 Demand and Quantity Demanded 2.1.3 Demand Determinants 2.1.4 Individual Demand and Market Demand 2.2 Supply 2.2.1 Law of Supply 2.2.2 Supply and Quantity Supplied 2.2.3 Supply Determinants 2.2.4 Individual Supply and Market Supply 2.3 Market Equilibrium 2.3.1 Equilibrium, Surplus, and Shortage 2.3.2 Change in Market Equilibrium 2.4 Market in the Form of