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Ben 3111:Introduction Ro Microeconomics Question Paper

Ben 3111:Introduction Ro Microeconomics

Course:Bachelor Of Business Administration

Institution: Jaramogi Oginga Odinga University Of Science And Technology question papers

Exam Year:2008

BONDO UNIVERSITY COLLEGE
BACHELOR OF BUSINESS ADMINISTRATION
BEN 3111: INTRODUCTION TO MICROECONOMICS
YEAR 1 SEMESTER 2 EXAMINATION
INSTRUCTION: Answer question one and any other two questions
Question one
a) Define and differentiate the following terms
i. Substitutes and complements (2 mks)
ii. Economic good and free good (2 mks)
iii. Market and market place (2 mks)
iv. Normal good and inferior good (2 mks)
b) State the major assumptions that are used in controlling economic theories and
explanations about the world around us (8 mks)
c) State the assumptions which underline the model of consumer choice (8 mks)
d) Due to escalating sugar prices in the county government, the function below was obtained
for both demand and supply of sugar
Qs = 750 + 2P
Qd = 1500 – 3P
i. Calculate price and quantity (2 mks)
ii. Explain using a diagram what will happen to equilibrium position as a result of an
increase in the price of substitute (4 mks)
Question two
Write short notes on the following fundamental concepts
a) Scarcity and choice (5 mks)
b) Opportunity cost (5 mks)
c) Production possibility frontier (5 mks)
d) Positive and normative economics (5 mks)
Question three
a) What are the main factors of production (4 mks)
b) Define the term production function (2 mks)
c) What determine the supply and demand of the factors of production that you have
identified in (a) above? (14 mks)
Question four
a) What is an indifference curve (2 mks)
b) Explain the main characteristics of indifference curves (6 mks)
c) Briefly explain two exceptions to the definition of indifference curve (4 mks)
d) Explain any four uses of indifference curve analysis (8 mks)
Question five
a) Define marginal utility and clearly explain the axiom of diminishing marginal utility (6
mks)
b) Rigorously explain the following:
i. Consumer equilibrium under the cardinal approach (7 mks)
ii. Consumer equilibrium under the ordinalist approach (7 mks)

Ben 3111:Introduction Ro Microeconomics Question Paper

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