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General Economics Question Paper

General Economics

Course:Bachelor Of Science In Information Technology

Institution: Kca University question papers

Exam Year:2009

UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
SCIENCE IN INFORMATION TECHNOLOGY
BIT 1308: GENERAL ECONOMICS
DATE: AUGUST 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Using examples explain the concepts of
i) Scarcity
ii) Choice
iii) Opportunity cost
(7 Marks)
b) Using a diagram explain the concept of price ceiling and price floor (5 Marks)
c) Argue for and against inflation (8 Marks)
d) Using an appropriate diagram explain what is meant by Phillips Curve (5 Marks)
e) Differentiate between absolute and comparative cost advantage theory of
International Trade (5 Marks)
(Total: 30 Marks)
QUESTION TWO
a) Using a diagram state the necessary and sufficient conditions for profit maximization. (6 Marks)
b) Define the term price discrimination (2 Marks)
2
c) Clearly explain the ideal conditions for price discrimination for a monopoly (6 Marks)
d) For a price discriminating monopolist, the demand and marginal revenue functions are P = 80 –
5Q; and MR = 80 – 10Q respectively
where:
P - is price
Q - is quantity demanded
MR - is marginal revenue
Using the above information, calculate the profit maximizing output in the market and the
corresponding price when the industry’s marginal cost equals 20 units. (6 Marks)
(Total: 20 Marks)
QUESTION THREE
a) What measures can be adopted to correct disequilibrium in balance of payment (BOP) in Kenya
(8 Marks)
b) Explain two components of the balance of payments account (8 Marks)
c) Explain four causes of shifts in the supply curve (4 Marks)
(Total: 20 Marks)
QUESTION FOUR
Majority of the population in developing countries have been facing unemployment crisis. Discuss the
major causes of unemployment and the measures a country can take to correct the situation.
(Total: 20 Marks)
QUESTION FIVE
a) Highlight five circumstances under which the law of demand is violated (4 Marks)
b) Using illustrations explain the concept of market demand (6 Marks)
c) Explain the ways in which the government can stimulate economic growth. (10 Marks)
(Total: 20 Marks)

General Economics Question Paper

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