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Bca/Bps 1202: Introduction To Micro Economics Question Paper

Bca/Bps 1202: Introduction To Micro Economics

Course:Diploma In Business Administration

Institution: Dedan Kimathi University Of Technology question papers

Exam Year:2013

DEDAN KIMATHI UNIVERSITY OF TECHNOLOGY
UNIVERSITY EXAMINATION ACADEMIC YEAR 2012/2013
SECOND YEAR FIRST SEMESTER EXAMINATION FOR THE DIPLOMA IN BUSINESS ADMINISTRATION AND DIPLOMA IN PURCHASING AND SUPPLIES MANAGEMENT
BCA/BPS 1202: INTRODUCTION TO MICRO ECONOMICS
APRIL 2013 TIME: 2 HOURS
Instructions:
Answer question ONE and any other TWO questions
QUESTION ONE COMPULSORY
a. Write short notes on the following fundamental concepts:
i. Scarcity and Choice (2 marks)
ii. Opportunity cost (1 marks)
iii. Positive and normative economics (4 marks)
b. i. Why is the consumer said to be sovereign? (2 marks)
ii. What factors limit this sovereignty? (8 marks)
c. With the help of a diagram, distinguish between shifts in and movement along the demand curves. (6marks)
d. (i) Explain the meaning of mobility of factors of production. (2 marks)
(ii) Explain the significance of factor mobility (5 marks)
QUESTION TWO
a. What is an indifference curve? (1 marks)
b. Explain the main characteristics of indifference curves (4 marks)
c. The following economic functions have been derived by the Manager of K Limited:
Qa = 3p2 – 4p and
Qb = 24 – p2; where p represents price and Q is quantity
d. Required: Which of the two functions represents a demand curve, supply curve and why?(4 marks)
e. Briefly explain factors that influence demand of a commodity. (6 marks)
QUESTION THREE
a. i. What is price discrimination? (1 mark)
ii. Using relevant examples, describe conditions necessary for firms to practice price discrimination. (8 marks)
b. Differentiate between economies of scale and returns to scale (4 marks)
c. State the law of diminishing marginal utility. (2 marks)
QUESTION FOUR
a. State the law of variable proportions. What key assumptions underlie this law? (7 marks)
b. Explain the importance of elasticity of demand. (3 marks)
c. When the price of petrol is sh. 80 per half litre, quantity demanded is 4500 units and when the price changes to sh. 120 per half litre, quantity demanded becomes 3500 units. Calculate price elasticity of demand and interpret the coefficient. (5 marks)
QUESTION FIVE
a. Explain five determinants of demand for the factor of production. (5marks)
b. Briefly explain five key characteristics of a perfectly competitive market. (5 marks)
c. Explain five cases where the law of marginal utility does not apply (5 marks)

Bca/Bps 1202: Introduction To Micro Economics Question Paper

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