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Introduction To Economics Question Paper

Introduction To Economics

Course:Diploma In Business Management

Institution: Mount Kenya University question papers

Exam Year:2012

MOUNT KENYA UNIVERSITY
UNIVERSITY EXAMINATION 2011/2012
SCHOOL OF SOCIAL SCIENCES
DEPARTMENT OF ECONOMICS AND DEVELOPMENT STUDIES
UNIT CODE: DCD/DBM 112
UNIT TITLE: INTRODUCTION TO ECONOMICS
DATE: MARCH 2012 MAIN EXAM TIME: 2HRS
INSTRUCTIONS
ANSWER QUESTION ONE AND ANY OTHER TWO QUESTIONS

1. QUESTION ONE
a) Explain the following terms as used in economics;
I. scarcity (2marks)
II. choice (2marks)
III. opportunity cos(2marks)t
IV. microeconomics(2marks)

b) Questions
I. define the term 'price control'(2marks)
II. explain the circumstances under which price control is considered(6marks)
c) explain two factors that determine elasticity of demand(4marks)
d) explain the three advantages of a free market system(6marks)
e) state four main causes of labor mobility(4marks)

2. QUESTION TWO
a) Illustrate using a well-labeled diagram the equilibrium position in the short-run of a firm operating in a perfect market(12marks)
b) briefly explain features of a monopoly(8marks)

3. QUESTION THREE
a) differentiate between a shift of and movement along the demand curve(10marks)
b) Question
I. define consumer sovereignty(2marks)
II. explain the limitations of consumer sovereignty(8marks)

4. QUESTION FOUR
a) using a well labeled diagrams, explain abnormal demand curves(12marks)
b) given Qd=200-4p and Qs=8-8p, calculate the equilibrium price and quantity(8marks)

5. QUESTION FIVE
a) Wage differentials exist between occupation and within the same occupation. Discuss five that are responsible for wage differentials between occupations(10marks)
b) Using a well-labeled diagram, distinguish between minimum and maximum price used in price control(10marks)

Introduction To Economics Question Paper

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