CB2400 Microeconomics
The Complete Exam Bible · Semester A, 2026/27CB2400 Overview
- City University of Hong Kong
- Semester A, 2026/27
- Level 2 undergraduate
- Economics
- Final examination
What this course asks you to do
Microeconomics turns choices made under constraints into diagrams, functions and testable predictions. The opening material begins with scarcity and a production possibility frontier, then builds individual demand and supply into a market equilibrium.
- Assessment structure Two online problem sets, a midterm and a final examination make up the published grade.
- Largest component The Final Examination carries half of the grade and covers all chapters discussed in classes.
- Quantitative focus Diagrams, algebra and direction words must agree before a result is complete.
What you get in the full CB2400 Exam Bible
- 10 chapters, 43 pages — every examinable topic
- 34 original practice questions, each with a model answer in the Final Examination format
- 10 worked examples, solved the way CB2400 marks
- 10 computed figures, redrawn from the course’s own numbers
- Exam-morning plan for the Final Examination (50%) — what to revise last, where marks are lost
Free on this page: assessment table, chapter map, one worked example, key terms, FAQ. The rest is in the full exam bible.
How CB2400 is assessed
| Component | Weight | Format |
|---|---|---|
| Problem sets (2 online assignments) | 15% | Two online assignments; detailed instructions and deadlines are provided through Canvas |
| Midterm | 35% | Midterm assessment; current format details are provided through Canvas |
| Final Examination | 50% | Covers all chapters discussed in classes; date and mode are centrally determined |
The weights come from the Semester A, 2026/27 CityU syllabus and total 100%; confirm detailed formats, deadlines and examination logistics through Canvas and official CityU notices.
Assessment structure
The segment widths reproduce the published weights and total 100%.
What other students are asking about CB2400
- Where can I find lecture notes or study guides for CB2400 at CityU?
- The CB2400 study guide in AskSia Library covers Microeconomics in 10 chapters, with the assessment table, a chapter-by-chapter topic map, key terms and a worked example, free to read on this page.
- Is there a final exam in CB2400, and how much is it worth?
- Yes. In the offering this AskSia Library guide is built from, Final Examination carries 50% of the CB2400 mark; the full split is Problem sets (2 online assignments) 15%, Midterm 35%, Final Examination 50%.
- What does CB2400 cover on demand curves and market demand?
- In AskSia Library's CB2400 guide, the Demand Curves and Market Demand chapter explains own-price movement, non-price shifts and horizontal aggregation.
- What does CB2400 cover on supply, equilibrium and price controls?
- In AskSia Library's CB2400 guide, the Supply, Equilibrium and Price Controls chapter explains supply shifts, market clearing, shortages, surpluses and binding controls.
- What does CB2400 cover on elasticity and revenue decisions?
- In AskSia Library's CB2400 guide, the Elasticity and Revenue Decisions chapter explains midpoint and point elasticity, classification and total revenue.
What CB2400 covers
Ten chapters move from scarcity and market adjustment through elasticity, consumer choice, production and cost analysis.
Scarcity, Choice and the PPF
resource limits, efficient bundles, opportunity cost and frontier shiftsScarcity is a constraint, not a poverty label
Scarcity exists because available resources cannot satisfy every possible want at once. The idea applies to wealthy and poor decision makers alike.
- scarcity and unlimited wants
- four factors of production
- attainable and unattainable bundles
- productive efficiency
- opportunity cost between frontier points
- technology and resource shifts
Demand Curves and Market Demand
own-price movement, non-price shifts and horizontal aggregationDemand is willingness plus ability
A demand schedule records how much a buyer is willing and able to purchase at each own price while other determinants remain fixed.
- demand function and determinants
- law of demand
- ceteris paribus
- movement along demand
- right and left shifts
- horizontal market aggregation
Supply, Equilibrium and Price Controls
supply shifts, market clearing, shortages, surpluses and binding controlsSupply follows the producer's constraint
A supply schedule records quantities sellers are willing and able to offer at each own price while input prices, technology, expectations and related-output prices stay fixed.
- supply determinants
- horizontal market supply
- market-clearing equation
- shortage and surplus
- comparative static shifts
- binding ceilings and floors
Elasticity and Revenue Decisions
midpoint and point elasticity, classification and total revenueElasticity measures proportional response
Own-price elasticity of demand divides the percentage change in quantity demanded by the percentage change in price.
- unit-free responsiveness
- elastic and inelastic ranges
- midpoint elasticity
- point elasticity
- slope versus elasticity
- price and total revenue
Income, Cross-price and Tax Incidence
elasticity signs, buyer and seller prices, tax burden and revenueSigns classify demand relationships
Income elasticity measures the percentage quantity response to a percentage income change. A positive sign identifies a normal good and a negative sign identifies an inferior good over the observed range.
- income elasticity sign
- normal and inferior goods
- cross-price elasticity sign
- substitutes and complements
- buyer and seller prices
- elasticity and tax burden
Utility and Indifference Curves
preference assumptions, marginal utility, MRS and special curve shapesPreferences rank complete bundles
Consumer theory begins with bundles of goods and a ranking over those bundles. Completeness permits comparison and transitivity keeps comparisons consistent.
- preference assumptions
- ordinal utility
- marginal utility
- indifference-curve maps
- marginal rate of substitution
- substitutes and complements
Budgets and Consumer Choice
budget shifts, interior tangency, corner choice and kinked offersThe budget line records affordability
Income and prices generate the constraint I = PxX + PyY. Each intercept shows the maximum quantity purchasable when all income is spent on one good, while the slope magnitude Px/Py gives the market trade-off.
- budget equation
- intercepts and slope
- income and price changes
- interior tangency
- corner solutions
- kinked budget lines
Production, Isoquants and Cost Minimisation
production technology, MRTS, isocost lines and least-cost inputsTechnology sets the feasible output
A production function gives the maximum output attainable from specified labour and capital under the existing technology. Marginal product changes one input while holding the others fixed.
- production functions
- marginal products
- returns to scale
- isoquant slope
- isocost equation
- cost minimisation
Short-run Production and Costs
marginal product, fixed and variable costs, MC, AVC and ATCOne input remains fixed
The short run is an adjustment condition, not a fixed calendar period. At least one input cannot change.
- short-run inputs
- total product
- diminishing marginal returns
- fixed and variable costs
- average costs
- marginal cost
Long-run Costs and Scale
adjustable inputs, long-run total and average cost, economies and diseconomiesEvery input can adjust
In the long run the firm can vary all relevant inputs and choose the least-cost combination for each output. Long-run total cost records those minimum expenditures.
- long-run flexibility
- long-run total cost
- long-run average cost
- long-run marginal cost
- economies of scale
- returns to scale
Elasticity adds a unit-free measure of responsiveness, which lets you predict total revenue and tax burden rather than merely the direction of a movement. Consumer theory explains demand from preferences and a budget. Producer theory mirrors that structure with technology, isoquants, input prices and cost minimisation.
The captured sequence finishes by deriving short-run and long-run cost curves from those production choices.
How the assessment shapes revision
The published grade has three components: two online problem sets together carry fifteen per cent, the midterm carries thirty-five per cent, and the Final Examination carries fifty per cent.
The final covers all chapters discussed in classes, while its date and mode are determined centrally. Detailed deadlines, scoring arrangements and task-specific rules for generative AI are provided separately through Canvas.
Revision therefore needs two tracks: master the stable economic methods in this guide, and verify the live assessment mechanics from official CityU notices.
Where the hard reasoning sits
Most errors are not long calculations.
They are wrong classifications made before arithmetic begins: treating an own-price movement as a curve shift, subtracting shortage in the wrong direction, calling a constant-slope demand curve equally elastic everywhere, forcing a tangency onto a corner solution, or adding fixed cost to marginal cost.
Each chapter makes the relevant condition visible and then checks the result against a diagram.
How to work the examples
Cover the model answer and write the relationship first. Draw the axes, mark what stays fixed, select the equation and compute each line. Finish with one sentence that names the economic direction.
The original practice questions follow the types visible in the course exercise sets without copying their stems or values. Marks printed on AskSia practice are study allocations, not a University marking scheme.
Worked example · free
Solve a market equilibrium and a binding ceiling
- 3Set quantity demanded equal to quantity supplied and solve for price.
- 3Substitute the price into both functions to verify equilibrium quantity.
- 4Evaluate both quantities at the ceiling and subtract supply from demand.
Key terms
- Opportunity Cost
- The value of the highest-ranked alternative forgone when a choice is made.
- Market Equilibrium
- The price and quantity at which planned purchases equal planned sales.
- Ceteris Paribus
- The condition that other determinants are held fixed while one relationship is examined.
- Price Elasticity
- The percentage responsiveness of quantity to a one per cent own-price change.
- Tax Incidence
- The division of a tax wedge between the buyer price and seller receipt.
- Marginal Utility
- The change in total utility from one additional unit while other consumption stays fixed.
- Indifference Curve
- A set of consumption bundles that provide the same utility level.
- Budget Constraint
- The affordable set created by income and the prices of goods.
- Isoquant Curve
- A set of input combinations that produce the same output.
- Isocost Line
- A set of labour and capital combinations carrying the same total cost.
- Marginal Cost
- The additional cost incurred when output increases by one unit.
- Economies Of Scale
- A long-run region in which average cost falls as output expands.
CB2400 FAQ
How is the course grade divided?
The current CityU syllabus assigns fifteen per cent to two online problem sets, thirty-five per cent to the midterm and fifty per cent to the Final Examination. Those numeric rows total one hundred per cent. Detailed deadlines, scoring arrangements and task-specific rules are issued separately through Canvas, so use the live course page for operational instructions.
What does the Final Examination cover?
The syllabus states that the Final Examination covers all chapters discussed in classes. Its date and mode are determined by Central Administration. The captured materials do not publish the duration, sections, question types, permitted materials or aids, so verify those details from the official examination timetable and current Canvas announcements.
What is the best way to solve equilibrium questions?
Write the market demand and supply functions, impose quantity demanded equals quantity supplied, solve for price and substitute back into both sides to verify quantity. For a controlled price, evaluate both functions again at that price. Quantity demanded minus quantity supplied is a shortage; the reverse difference is a surplus.
When should I use midpoint elasticity?
Use the midpoint formula when the question describes a finite movement between two price-quantity observations. It divides each change by the average of the endpoints, so reading the movement forward or backward gives the same magnitude. Use point elasticity when a function and local slope are supplied or when the change is treated as very small.
How do I know whether consumer tangency applies?
Tangency applies to a smooth interior optimum where the budget line reaches the highest attainable indifference curve. Perfect substitutes can create a corner, perfect complements can place the optimum at a kink, and quantity discounts can kink the budget line. In those cases compare feasible candidates and their utility rather than forcing the tangency condition.
What links marginal product to marginal cost?
With a fixed wage in the short run, marginal cost is the wage divided by marginal product of labour. Rising marginal product lowers the cost of the next output unit. Once diminishing marginal returns makes marginal product fall, marginal cost rises. Fixed capital cost does not enter this marginal relationship because it does not change with output.
How are short-run and long-run costs different?
In the short run at least one input is fixed, so total cost separates into fixed and variable parts. In the long run all relevant inputs can adjust and the firm chooses the least-cost mix for each output. The distinction concerns flexibility, not a universal number of days or months.
Questions students ask in each CB2400 chapter
- Does an interior point mean the economy cannot produce it?
- No. An interior point is feasible, but it is inefficient because the available resources could produce more of at least one output without reducing the other. The diagnosis is unused or misallocated capacity, not impossibility. A point beyond the frontier is the one that current resources and technology cannot reach. Chapter 01 · Scarcity, Choice and the PPF
- What is the difference between demand and quantity demanded?
- Demand refers to the entire relationship between price and planned purchases, shown by a curve. Quantity demanded is the selected amount at one own price. A change in own price moves the point along the curve; a change in income, preferences, expectations or a related-good price shifts the curve. Chapter 02 · Demand Curves and Market Demand
- How do I calculate market equilibrium?
- Set the market demand function equal to the market supply function and solve for price. Substitute that price into both equations and verify that they produce the same quantity. That cross-check detects algebra errors before a later policy calculation builds on the wrong intersection. Chapter 03 · Supply, Equilibrium and Price Controls
- Why is elasticity different from slope?
- Slope uses unit changes and depends on the measurement units. Elasticity uses percentage changes and is unit-free. Along a straight demand curve the slope remains constant, but the price-to-quantity ratio changes, so point elasticity changes from the high-price end to the low-price end. Chapter 04 · Elasticity and Revenue Decisions
- What does a negative income elasticity mean?
- It means quantity demanded falls when income rises over the observed range, so the good is classified as inferior in that setting. The classification does not imply low quality and need not hold for every consumer or income level. It is a measured demand relationship. Chapter 05 · Income, Cross-price and Tax Incidence
- Why can indifference curves not cross?
- At a crossing, the same bundle would sit on two stated utility levels. Bundles elsewhere on those curves would each be indifferent to the crossing bundle, so transitivity would make them indifferent to each other. If one also contains more of both goods, more-is-better produces a contradictory strict preference. Chapter 06 · Utility and Indifference Curves
- What moves when income rises?
- With both prices unchanged, each intercept increases in the same proportion and the budget line shifts outward in parallel. Its slope remains minus Px divided by Py because the relative price has not changed. The chosen quantities then depend on whether each good is normal or inferior over the relevant range. Chapter 07 · Budgets and Consumer Choice
- What does an isoquant hold constant?
- It holds output fixed while labour and capital change. Moving to an isoquant farther northeast normally represents greater output when more inputs raise production. Movement along one curve is input substitution, whereas movement between curves changes the production target or reflects a technology change. Chapter 08 · Production, Isoquants and Cost Minimisation
- Does diminishing marginal returns mean output falls?
- No. Diminishing marginal returns begins when successive units of the variable input add less output than the previous unit. Total product can continue rising while marginal product is positive. Total output falls only if marginal product becomes negative, which is a later and distinct condition. Chapter 09 · Short-run Production and Costs
- Can total cost rise during economies of scale?
- Yes. Economies of scale means long-run average cost falls, not that the total bill falls. If output grows faster proportionally than long-run total cost, cost per unit declines even though more inputs are purchased and aggregate expenditure increases. Chapter 10 · Long-run Costs and Scale
How to study for the exam
Begin each revision session with one blank sheet. Draw the main economic relationships from memory and label what is held fixed. Choose one numerical example and recompute it without reading the answer, then audit the direction against the graph.
Keep an error log with categories such as shift versus movement, reversed shortage, wrong percentage denominator, invalid tangency, marginal versus average and short run versus long run. Return to the same error two days later using new numbers.
In the final revision week, separate content from logistics: use this guide for stable methods, but use official CityU notices and Canvas for the current timetable, mode, allowed materials, task settings and any assessment-specific AI instructions. If a result has no unit or no economic interpretation, treat it as unfinished even when the arithmetic is correct.
The most reliable closing sentence names the relationship proved by the calculation, such as elastic demand, a binding ceiling, a corner optimum, diminishing marginal returns or economies of scale.
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