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Bust 221:Managerial Economics Question Paper

Bust 221:Managerial Economics

Course:Bachelor Of Education Arts

Institution: Chuka University question papers

Exam Year:2010

INSTRUCTIONS:
- Answer question one and any other two questions. - Do not write on the question paper. - Diagrams should be used whenever they deserve to illustrate an answer.
1. (a) Differentiate between economics and managerial economics. [2 marks]
(b) What are the assumptions of marginal utility theory? [4 marks]
(c) With the help of diagrams, explain the following types of costs:-
(i) Marginal cost (ii) Average fixed cost (iii) Average variable cost (iv) Average total cost [4 marks]
(d) Explain the effect on the budget line by the following changes:-
(i) Increase in income of one good. (ii) Same proportional decrease in the prices of the two goods. (iii) The price of one good decreases. (iv) The price of one good increases while the other decreases.
2
[4 marks]
(e) Explain the short-run possible profit outcomes in a perfect competitive industry. [6 marks]
(f) Assume that the price of mangoes increases from Sh.40 to Sh.60 per kilogram. As a result, the quantity supplied increases from 100 units to 140 units.
Required:
Calculate the price elasticity of supply. [3 marks]
(g) Explain the determinants of supply. [3 marks]
(h) Write short notes on the following:-
(i) Scarcity and choice (ii) Opportunity cost (iii) Marginal analysis (iv) Economic models [4 marks]
2. (i) Explain the scope of managerial economics. [8 marks]
(ii) Explain how managerial economics is related to other disciplines. [8 marks]
(iii) What are the uses of managerial economics? [4 marks]
3. (i) Write short-notes on the following:-
(a) Goals of economic policy [4 marks] (b) The market system [4 marks] (c) Scientific thinking [4 marks]
(ii) Discuss the various sources of monopoly power. [12 marks]
3
4. (i) Discuss the characteristics of perfect competition. [8 marks]
(ii) Explain the following models of oligopoly:-
(a) Kinked demand curve (b) Collusive pricing model (c) Price leadership model [6 marks]
(iii) Explain any three fundamental features of monopolistic competitive firms. [6 marks] -------------------------------------------------------------------------------------------------------

Bust 221:Managerial Economics Question Paper

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