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Introduction To Microeconomics Question Paper

Introduction To Microeconomics

Course:Bachelor Of Commerce

Institution: University Of Nairobi question papers

Exam Year:2013

UNIVERSITY OF NAIROBI
MODULE II DEGREE PROGRAMME – 2012/2013 (NAIROBI DAY)
FIRST YEAR EXAMINATIONS FOR THE DEGREE OF BACHELOR OF COMMERCE
DBA 103: INTRODUCTION TO MICROECONOMICS

DATE: MAY 8, 2013 TIME: 2:00 P.M. – 4:00 P.M.

INSTRUCTIONS:
Answer any THREE Questions

Question One
Given the market demand function P+Q2+Q=11 and the market supply function 2P-2Q2+Q-4=0; calculate the equilibrium price and quantity in the market.

Question Two
A firm produces amounts X and Y of two different grades of cakes using the same production process. The production transformation curve showing the maximum output of either good attainable for any given level of output of the other is:
X2+2X=10-Y

i. What are the largest amounts of X and Y that can be produced?
ii. What amounts of X and Y should be produced to have:
a) 0.25Y=X
b) Y=2X

Question Three
A monopolist’s demand function is given as P=30-0.75Q and his average cost (AC) function takes the form AC-30/Q=Q+0.3Q.
Find the quantity (Q) which gives:
a) Maximum revenue (TR)
b) Minimum average cost (AC)
c) Maximum profits (p)

Question Four
Calculate the price elasticity of demand or supply for the following functions when P=8 and P=6.
a) P=40-0.5Q
b) Q=-4+0.75O
c) Q-P+2=0
d) 2P+0.25Q=40
e) P=20-2Q
f) 4Q+4P=64

Question Five
The sales manager of a firm wishes to study the characteristics of the revenue received by the firm. He notices from his study that when price is at 3. The level of output sold is 10 units, however, when price goes to 5, then quantity sold falls to 2. If you assume a linear relationship between these data; determine:

i. The Demand Function
ii. The Total Revenue (TR) Function
iii. The Average Revenue (AR) Function
iv. The Marginal Revenue (MR) Function
v. Comment on your result in (i) and (iii) above.

Introduction To Microeconomics Question Paper

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