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Hbc:2107 Introduction To Micro- Economics Question Paper

Hbc:2107 Introduction To Micro- Economics

Course:Bachelor Of Commerce

Institution: Kirinyaga University question papers

Exam Year:2012

YEAR: 1 SEMESTER 1 EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
DATE:DECEMBER 2012 TIME:2HOURS
INSTRUCTION: ANSWER QUESTION ONE (COMPULSORY) AND ANY OTHER TWO QUESTIONS

QUESTION ONE (30 MARKS)

(a) more economies are currently opting for free market system as opposed to controlled system .compare the two systems describing their respective advantages and disadvantages. (10 marks)

(b)Explain the main determinants of demand (8 marks)

(c)Distinguish between diminishing marginal rate of substitution and diminishing marginal utility. (4 marks)

(d) Explain the various internal and external economies of scale. (8 marks)

QUESTION TWO (20 MARKS)

(A)distinguish between fixed and variable costs (5 marks)

9b) the data below shows tabulation on the the production of hypothetical product
Output (Q0 units 0 1 2 3 4 5 6 7 8
Total cost (TC) shs.25 32 38 42 48 58 67 78 98
using the above data ,determine
(i) Total fixed cost (5 marks)
(ii)Average variable cost when output equals 6 units (5 marks )
(iii) Marginal cost of the 3th unit of output (5 marks )

QUESTION THREE (20 marks)
(a)Explain the cause of monopoly in most counties (7 marks)
(b) (i) what is price discrimination/ (2 marks)
(ii)How does a monopolist manage to price discrimination (3 marks)

(c) A firm ''s total revenue and costs are given as:
TR=60000-30Q^2
TC=10000+1000Q+20Q^2
(i) Determine the revenue maximizing output level. (2 marks)
(ii)Determine the profit maximizing output and the profit level. (6 marks)

QUESTION FOUR (20 MARKS)
(A) Explain the production :
(i) in the short-run (3 marks)
(ii) in the long-run (3 marks)
(b)What do you understand by the following concepts?
(i)Isoquant
(ii)Isocost
(iii) Marginal rate of technical substitution (6 marks)
(c)Explain the four principal factor of production (8 marks)

QUESTION FIVE (20 MARKS)
(a) Explain the law of :
i. Demand
ii.Supply
(b) Explain the exceptional of the laws mentioned in (a) above (2 marks)
(c)Explain the meaning of ''market equilibrium used in economics (4 marks)
(d)Using the following demand and supply functions of a commodity in the market.give price and quantity
Qd=100-2p
Qs=40+4p (4marks)
(e) Explain the factor which influence the supply of a commodity in the market.give appropriate examples (8 marks)

Hbc:2107 Introduction To Micro- Economics Question Paper

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