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Bcom 333: Public Finance Question Paper
Bcom 333: Public Finance
Course:Bachelor Of Commerce
Institution: Chuka University question papers
Exam Year:2013
THIRD YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF COMMERCE
BCOM 333: PUBLIC FINANCE
STREAMS: BCOM Y3 TIME: 2 HOURS
DAY/DATE: THURSDAY 18/4/2013 2.30 P.M. – 4.30 P.M.
INSTRUCTIONS:
ANSWER QUESTION ONE AND ANY OTHER TWO QUESTIONS.
(a) (i) Budget preparation in MEFMI countries has been flout with challenges.
State and briefly explain five of these challenges. [5 marks]
(ii) As a professional in public finance, explain in brief five reforms you would recommend in budget preparation to overcome the above challenges. [5 marks]
(b) Clearly discuss the following terms as used in public finance.
Cost benefit analysis
Budget deficit & budget surplus
Use of PAC reports
Accounting officer
Revenue control measures Total = [10 marks]
(c) Outline the key steps/stages in budget process for the national government as stipulated in he Kenya Constitution 2010 and Financial Management Act 2012.
[10 marks]
(a) With the aid of a graphical illustration, explain how efficiency is attained in the
provision of a public good. [10 marks]
(b) (i) Giving examples from Kenya, explain the term privatization. [2 marks]
(ii) Privatization of public sector enterprises have been ongoing in Kenya and across the globe albeit with mixed results. The success or failure of the privatization initiatives may be attributed to obeying/following certain laid down privatization guidelines. As an expert in public finance, advise the management of the Kenya Ports Authority on the considerations/criteria to be followed in deciding whether or not to privatize the port of Mombasa. [10 marks]
(a) Highlight five principles of public finance as stipulated in the Kenya Constitution
2010. [5 marks]
(b) Clearly explain the meaning of the following terms as spelt out in the Kenya Financial Management Act 2012 and Constitution 2010.
Equalization fund
Consolidated fund
Revenue fund
Contingence fund
Other public funds Total = [10 marks]
(c) Explain in brief, the five functions of the commission for revenue allocation.
[5 marks]
(a) Define externality indicating its types. [2 marks]
(b) Externalities possess certain distinct characteristics. Discuss four of these characteristics. [8 marks]
(c) With the help of a diagram (graph) explain why the marginal social cost of production is always higher than the private marginal cost of production in the presence of negative externalities in the production process. [5 marks]
(d) with the help of a graphical illustration, explain how a Pigouvian tax lowers the actual equilibrium production of a firm producing with negative externalities to the socially desired equilibrium level of output. [5 marks]
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CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
EXAMINATIONS FOR THE AWARD OF DEGREE OF BACHELOR OF SCIENCE IN APPLIED COMPUTER SCIENCE
ECON 100: INTRODUCTION TO ECONOMICS
STREAMS: B.SC (APPIEDCOMP SCIENCE) TIME: 2 HOURS
DAY/DATE: MONDAY 22/4/2013 11.30 AM – 1.30 PM
INSTRUCTIONS:
1. (a) (i) Distinguish between ordinal and cardinal utility theory.
[2 Marks]
(ii) Given the following utility function
U=1000x^(1/3) y^(2/3)
and consumer’s budget constraint
3000=100x+50y
find the equilibrium quantities of x and y that this consumer will demand.
[8 Marks]
(b) Given the following cost function:
TC=?_0+?_1 Q+?_2 Q^2+?_3 Q^3 (?_0,?_1,?_(3,)>0?_2<0)
Determine:
(i) Fixed costs (FC) [1 Mark]
(ii) Variable costs (VC) [1 Mark]
(iii) Average total costs (ATC) [1 Mark]
(iv) Average fixed costs (AFC) [1 Mark]
(v) Average variable costs (AVC) [1 Mark]
(c) Given the following economic model
Q_(d_1 )=8-?2p?_1+p_2
Q_(d_2 )=16+p_1+p_2
Q_(s_2 )=-1+?2p?_2
Q_(s_1 )=-5+?3p?_1
Determine the equilibrium price and quantity for the model. [6 Marks]
(d) Discus the factors that are likely to influence the level of investment in your
country. [9 Marks]
2. (a) Explain the term unemployment. [1 Mark]
(b) What are the causes of unemployment in your country? [7 Marks]
(c) Your County is faced with the problem of unemployment. Explain the policies
that should be adopted to reduce this problem. [7 Marks]
(d) Explain the effects of inflation on different sections of the economy.
[5 Marks]
3. (a) With an aid of a well labeled diagram, describe the three stages of production.
[8 Marks]
(b) Explain the various sources of monopoly. [8 Marks]
(c) Distinguish between an arc and point elasticity of demand and give the formulae
for calculating each. [4 Marks]
4. Given the following data regarding a certain firm
Quantity Price Total cost
1 23 45
2 23 66
3 23 85
4 23 100
5 23 114
6 23 126
7 23 141
8 23 160
9 23 183
10 23 210
(a) Find;
(i) Total revenue (TR) [1 ½ Marks]
(ii) Marginal revenue (MR) [1 ½ Marks]
(iii) Marginal cost (MC) [1 ½ Marks]
(iv) Profit maximizing level of output (Q) [1 ½ Marks]
(b) Explain the distinguishing features of perfect competitive firms. [5 Marks]
(c) Describe how perfect competitive firms attain equilibrium in the short run.
[9 Marks]
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