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Econ 100: Introduction To Economics Y2s1 Question Paper

Econ 100: Introduction To Economics Y2s1

Course:Bachelor Of Science In Computer Science

Institution: Kabarak University question papers

Exam Year:2008

COURSE CODE: ECON 100
COURSE TITLE: INTRODUCTION TO ECONOMICS
STREAM: BSC Y2S1

INSTRUCTIONS:
Answer questions ONE and any other TWO questions
QUESTION ONE
Briefly distinguish between the following paired terms used in economics
(a) Private enterprise economy and command economy (5mks)
(b) Microeconomics and macroeconomics (5mks)
(c) Price floor and price ceiling (5mks)
(d) Inflation gap and recessionary gap (5mks)
(e) An increase in supply and increase in quantity supplied. (5mks)
(f) Capital and investment (5mks)
QUESTION TWO
Assume that Kenya and Sudan produce only coffee and sugar with the cost of producing
given as follows
1 bag of coffee 1 bag of sugar
Kenya Shs.3,000 Shs.1,500
Sudan SB.500 SB.400
Tanzania TShs.8,000 TShs.10,000
Explain in the context of international trade theory
(i) The opportunity cost of producing a bag of coffee in each of the countries
(6mks)
(ii) What type of advantage exists between any of the two countries
(1mk)
(iii) What commodity will Kenya export to Uganda? Give reason
(4mks)
(iv) What commodity will Kenya export to Tanzania? Give reason
(3mks)
(v) What commodity will Uganda export to Tanzania? Explain the gains form
such trade (6mks)
QUESTION THREE
Given the following national income model
C = 500 + 0.8 Yd, T = 0.25Y, G0 = 200, I0 = 100, NX0 = 50
(a) Solve for the equilibrium national output, consumption expenditure
and tax (12mks)
(b) What is the state of the government budget (4mks)
(c) Suppose the government increases its expenditure by 50 units, by
how much will the equilibrium income increase (4mks)
QUESTION FOUR
(a) Explain clearly the, four monetary policy tools that the government can use to
control inflation problem (10mks)
(b) What are the different types of unemployment experienced in a developing
economy. (10mks)
QUESTION FIVE
Discuss the characteristics of a developing economy. (20mks)

Econ 100: Introduction To Economics Y2s1 Question Paper

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