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# Bsm 211: Microeconomics Question Paper

Bsm 211: Microeconomics

Course:

Institution: Moi University question papers

Exam Year:2017

DEPARTMENT OF DEVELOPMENT STUDIES

2ndYEAR 2nd SEMESTER EXAMINATIONS

2017/2018 ACADEMIC YEAR

BSc. IN STRATEGIC MANAGEMENT

BSM 211: MICROECONOMICS

Instructions to Candidates:

?Section A is COMPULSORY

?Answer ANY THREE Questions in section B

?TIME:3 HOURS

SECTION A: COMPULSORY

Q1. a)With the aid of diagrams,explain

the law of variable proportions. Examine the relationship between total product (TP),average product (AV)and marginal product (MP). (15 mks)

b) Briefly discuss the factors which lead to increasing and decreasing returns to scale in the production process. (10mks)

SECTION B:Answer ANY THREE Questions

Q2. a) with the aid of a diagram, explain the concept of a firm's least cost factor combination. (9mks)

b) Explain the following economic concepts:

i)Marginal rate of technical substitution. (3mks)

ii)Isocost lines. (3mks)

Q3. a) With the help of a well labeled diagram, explain the relationship between the average fixed cost, average variable cost, average total cost curves and marginal cost curves. (10mks)

b) Explain why the marginal cost curves and average cost curves are U-shaped. (5mks)

Q4. Using appropriate diagrams, explain the properties of an isoquant. (15mks)

Q5. a) Distinguish between economies and diseconomies of scale and examine the types of internal and external economies of scale. (9mks)

b) Outline the significance of mobility of factors of production in an economy. (6mks)

Q6. Discuss the factors responsible for wage differentials between occupations and within the same occupations in the labour market and suggest measures to mitigate the situation. (15mks)

XXXENDXXX

2ndYEAR 2nd SEMESTER EXAMINATIONS

2017/2018 ACADEMIC YEAR

BSc. IN STRATEGIC MANAGEMENT

BSM 211: MICROECONOMICS

Instructions to Candidates:

?Section A is COMPULSORY

?Answer ANY THREE Questions in section B

?TIME:3 HOURS

SECTION A: COMPULSORY

Q1. a)With the aid of diagrams,explain

the law of variable proportions. Examine the relationship between total product (TP),average product (AV)and marginal product (MP). (15 mks)

b) Briefly discuss the factors which lead to increasing and decreasing returns to scale in the production process. (10mks)

SECTION B:Answer ANY THREE Questions

Q2. a) with the aid of a diagram, explain the concept of a firm's least cost factor combination. (9mks)

b) Explain the following economic concepts:

i)Marginal rate of technical substitution. (3mks)

ii)Isocost lines. (3mks)

Q3. a) With the help of a well labeled diagram, explain the relationship between the average fixed cost, average variable cost, average total cost curves and marginal cost curves. (10mks)

b) Explain why the marginal cost curves and average cost curves are U-shaped. (5mks)

Q4. Using appropriate diagrams, explain the properties of an isoquant. (15mks)

Q5. a) Distinguish between economies and diseconomies of scale and examine the types of internal and external economies of scale. (9mks)

b) Outline the significance of mobility of factors of production in an economy. (6mks)

Q6. Discuss the factors responsible for wage differentials between occupations and within the same occupations in the labour market and suggest measures to mitigate the situation. (15mks)

XXXENDXXX

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