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Introduction To Micro-Economics Question Paper

Introduction To Micro-Economics

Course:Diploma In Business Management

Institution: Kca University question papers

Exam Year:2010

UNIVERSITY EXAMINATIONS: 2009/2010
STAGE III EXAMINATION FOR DIPLOMA IN BUSINESS MANAGEMENT
DFU 102: INTRODUCTION TO MICRO-ECONOMICS
DATE: APRIL 2010 TIME: 1½ HOURS
INSTRUCTIONS: Answer any THREE questions
Question One
a) Discuss the free market economic system and highlight the advantages and disadvantages of the
system {10 Marks}
b) Discuss the concept and importance of opportunity cost concept. {10 Marks}
Question Two
a)Define the term marginal utility {2 Marks}
b) Consider the following data that shows the rice consumed and the total satisfaction derived.
Rice (kgs) Total utility (utiles) Marginal utility (utiles)
0 0 -
1 7
2 13
3 18
4 22
5 25
6 27
7 28
Required:
i) Complete the marginal utility column {4 Marks}
2
ii) Draw two diagram one for the total utility curve and the other for the marginal
utility curve. {8 Marks}
c) Discuss ANY THREE characteristics of an indifference curve {6 Marks}
Question Three
a) With the use of a well labeled diagram explain an abnormal supply curve and how it arises.
{4 Marks}
b) Explain ANY FIVE determinants if demand {10 Marks}
c) With the use of well labeled diagrams show how equilibrium changes when:
i) Both demand and supply rise but supply more then demand {3 Marks}
ii) Demand rise and supply fall in the same proportions {3 Marks}
Question Four
a) Discuss the factors limiting occupational mobility of labour {10 Marks]
b) Discuss the short run production period and the respective underlying law {4 Marks}
c) Discuss the concept of returns to scale and how they apply {6 Marks}
Question Five
a) Explain the following terms:
i) Isoquant {2 Marks}
ii) Indifference curve {2 Marks}
iii) Perfectly competitive market {2 marks}
iv) Market equilibrium {2 Marks}
v) Elasticity {2 marks}
b) Discuss the conditions necessary for price discrimination {10 Marks}

Introduction To Micro-Economics Question Paper

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