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Eco 110: Introduction To Micro-Economics Question Paper

Eco 110: Introduction To Micro-Economics

Course:Bachelor Of Business Management

Institution: University Of Kabianga question papers

Exam Year:2014

SCHOOL OF BUSINESS AND ECONOMICS

FIRST YEAR FIRST SEMESTER MAIN EXAM

2014/2015 ACADEMIC YEAR

Instructions: (i) Attempt question one and any other three of your choice
(ii) Precise answers but detailed are encouraged

QUESTION ONE

a) Define the law of demand and state exceptions to this law.(6 Marks)

b) Given the following model:

Qd=a-50p
Qs=-50+20p

i) What is the demand function if p=10 and Qd=250.(3 Marks)

ii) What is the equilibrium price in this market.(3 Marks)

iii) Determine the level of quantity bought and sold at the equilibrium price.(4 Marks)

c) Explain the properties of indifference curves. ( 6 Marks)

d) State and explain three properties of isoquants curve.(3 Marks)

QUESTION TWO

a) Define Elasticity of Supply. (1 Mark)

b) Explain the four main determinants of elasticity of demand.(8 Marks)

c) Briefly describe any three applications of elasticity of demand. (6 Marks)

QUESTION THREE

a) Distinguish between fixed and variable cost.(4 Marks)

b) With the help of a well labelled diagram explain the relationship between the average fixed cost,the average variable cost,total cost and marginal cost in the short run production period. (11 Marks)

QUESTION FOUR

a) What do you understand by the term indifference curve.(4 Marks)

b) Using indifference curve analysis, illustrate using a diagram how consumer's equilibrium point is attained. (11 Marks)

QUESTION FIVE

a) With the help of a well labelled diagrams,distinguish between price floors and price ceilings. What are the major consequences of each of these price control measures? (12 Marks)

b) Outline three factors that would cause the demand curve to shift to the left. (3 Marks)

QUESTION SIX

a) Distinguish between an isoquant and isocost line.(4 Marks)

b) With the aid of a well labelled diagram,describe the various stages of productions.(11 Marks)

Eco 110: Introduction To Micro-Economics Question Paper

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