ATTEMPT ALL QUESTIONS ON DEMAND THEORY ASSIGNMENT

1     What is meant by aggregate demand under demand theory? (1 mk)

(b) Mention any three components of aggregate demand in an open economy (3 mks)

2. (a)Differentiate between change in demand and change in quantity demanded (2 mks)

(b) State two factors that lead to a change in demand for a commodity (2 mks)

3. Briefly explain the following concepts as used in economics:

(a)Joint demand (2mks)

(b) Competitive demand (2 mks)

4. Distinguish between:

(a)consumer’s surplus and producer’s surplus

(b) Consumer’s sovereignty and producer’s sovereignty

5. Suppose the price of a commodity remained constant, state four reasons that can account for a decrease in supply (2 mks)
6. Commodities P and Q have complimentary demand. with use of an illustration briefly explain how an increase in the price for commodity P will affect the quantity demanded for commodity Q ( 4 mks)