BACHELOR DEGREE

BACHELOR OF BUSINESS ADMINISTRATION (HONS)

INDIVIDUAL ASSIGNMENT

OCTOBER 2018

COURSE NAME: MICROECONOMICS

COURSE CODE: MBB2303

NAME : JOHN BENDO (BBA18091094)

LECTURER : MR JAIN

DATE OF SUBMISSION : 28 OCTOBER 2018

 Table of Contents

NO CONTENTS PAGES
1. Introduction 1
2. Task 1: Fundamentals of Economics

A) Capitalism 2-3
B) Socialism/Planned Economy
C) Mix Economics
3. Task 2: Applying the Demand and Supply Theory 3
4. Task 3: Theory of Consumer Behaviour 4
5. References 5
1. Introduction

Microeconomics is an investigation of the behaviour of individuals, households, and

companies in decision-making and resource allocation. It generally applies to goods and
services markets and concerns individual and economic issues.

Plus, Microeconomics study deals with what selections folks build, what factors
influence their selections and the way their choices have an effect on the products market by
moving the worth, the availability and demand.
Task 1: Fundamentals of Economics

A) Capitalism

Capitalism is a financial set-up wherever non-public entities own the factors of production.
The four factors are labor, natural resources, capital merchandise, and entrepreneurship. The
house owners of natural resources, capital merchandise, and entrepreneurship is management
through firms. Meanwhile, the individual owns her or his labor. the sole exception is
slavery, wherever somebody else owns somebody’s labor. Though illicit throughout the world,
slavery remains wide practiced.

Next, there are a lot of characteristics of Capitalism. Capitalistic means that 2 things.
First, they derive their financial gain from their possession. Second, the owner manages and
controls the factors of production. It is also providing them with incentive to maximize profit.
This is why several or some capitalists say “Greed is Good”. Lastly, in firms, the shareholders
are the owner, their level of owning is depending on what percentage shares they own. They
shareholders elect a board of administrators, and rent chief executives to manage the company.

B) Socialism/Planned economy

Socialism is an economic system where everybody within the society equally owns the factors
of production. The ownership is received through an elected democratic government and it also
can be public corporation or cooperative where everyone owns the shares. There is a mantra
called “from each according to his ability, to each according to his contribution.” Which says
that everyone or anyone in the society shares the amount of the production based on how much
they contributed. it will motivate them to work long hours if they want to receive more.

There are 8 types of Socialism and these are the major branches of it: - Democratic
Socialism, Revolutionary Socialism, Libertarian Socialism, Market Socialism, Green
Socialism, Christian Socialism, Utopian Socialism, and Fabian Socialism.
C) Mix Economy

An economic system where that combines all the characteristic of traditional economies,
market, and command. All of it has its own benefits from the advantages and suffering from a
few disadvantages. Next, a mix economy has three of the following characteristics of a market
economy. Firstly, it is driven by self-motivation and self-interest of the individuals. Secondly,
it allows the laws of supply and demand and free market to determine prices. Lastly, it protects
private properly or stronger.

Moreover, it has some characteristic of command economy in some areas. It is allows

the federal government to protect its market and its people where the government play a huge
role in the military, national transportation, and international trade.

Task 2: Applying the Demand and Supply Theory

There are some possible or maybe the factors that influence the demand and supply for cars in
Sabah. As for the demand, the inco.me of citizens will affect the demand due to whether their
income has increases or not. For example, the bigger the incomes of the citizen, the greater will
their demand for the car. Otherwise, if their income is small, their demand of owning a car is
almost impossible due to lack of income. Therefore, when incomes of citizen increases, they
can afford to buy car.

Next, the supply of cars in Sabah is also will got effected by some factors which is the
technology. The technology factors are important because of if a better and advanced
technology will increase the production of a car, indirectly will increases the supply of car. for
example, the production of car and its good quality will increase the brand’s name to the world
and directly the company will be more successful in selling cars.
Task 3: Theory of Consumer Behaviour

A) it is because scarcity is existing inside each of the human beings. Also define as the problem
of fulfilling the infinite wants of human with very limited resources. This is why some people
has difference level of satisfactions. For example, some people do feel satisfy by eating their
favourite food or the food that they have been craving for and some people feel satisfy when
they get a good service or customer service from a company or organization. This is why
economies need to manage their resources in such way where everything ends up where it
ought to.

B) the human behaviour will keep changing and changing from time to time. According to the
law of diminishing marginal utility, where the marginal utility will decline from each
successive unit of the good from where the customer increases the consumption of a good at
the first place.

For example, if the individual feels hungry and decides to eat rice. The first rice that him/her
consume will gave a maximum satisfaction to him/her. After that, his/her satisfaction will begin
to drop slowly due to eats more and more rice. If him/her still consuming more rice, it will
eventually reach a point where eating rice would provide dissatisfaction to him/her.
 References

Amadeo, K. (2018). 8 Types of Socialism. [online] The Balance. Available at:

https://www.thebalance.com/socialism-types-pros-cons-examples-3305592 [Accessed 27 Oct. 2018].

Amadeo, K. (2018). What Is a Mixed Economy? [online] The Balance. Available at:
https://www.thebalance.com/mixed-economy-definition-pros-cons-examples-3305594 [Accessed 27
Oct. 2018].

Amadeo, K. (2018). What Is Capitalism and How Does It Work?. [online] The Balance. Available at:
https://www.thebalance.com/capitalism-characteristics-examples-pros-cons-3305588 [Accessed 27
Oct. 2018].

Hayes, A. (2018). Economics Basics: Utility. [online] Investopedia. Available at:

https://www.investopedia.com/university/economics/economics5.asp [Accessed 27 Oct. 2018].

J. Singh (N.D) Economics Discussion. 6 Important Factors That Influence the Demand of Goods.
[online] Available at: http://www.economicsdiscussion.net/essays/economics/6-important-factors-
that-influence-the-demand-of-goods/926#navigation [Accessed 27 Oct. 2018].

Nitisha (N.D) Economics Discussion. 8 Factors that Influence the Supply of a Product. [online]
Available at: http://www.economicsdiscussion.net/supply/8-factors-that-influence-the-supply-of-a-
product/3369 [Accessed 27 Oct. 2018].

Nitisha (N,D) Economics Discussion. Law of Diminishing Marginal Utility (Limitations and Exceptions).
[online] Available at: http://www.economicsdiscussion.net/consumer/law-of-diminishing-marginal-
utility-limitations-and-exceptions/3481 [Accessed 27 Oct. 2018].