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Hbc 2107: Introduction To Microeconomics Question Paper

Hbc 2107: Introduction To Microeconomics

Course:Bachelor Of Commerce

Institution: Dedan Kimathi University Of Technology question papers

Exam Year:2013

1
KIMATHI UNIVERSITY COLLEGE OF TECHNOLOGY
UNIVERSITY EXAMINATIONS 2010 / 2011
FIRST YEAR SPECIAL / SUPPLEMENTARY EXAMINATIONS FOR THE
DEGREE OF BACHELOR OF COMMERCE
HBC 2107: INTRODUCTION TO MICROECONOMICS
DATE: NOVEMBER 2010 TIME: 2Hours
INSTRUCTIONS.
Answer question ONE and any other TWO questions.
QUESTION ONE.
a) Explain the factors that determine the supply of goods and services in market
(10marks)
b) Briefly explain three economic applications of the concept of elasticity of demand.
(9marks)
c) Following the price decrease of eggs from ksh 5 to ksh 3 per egg, the quantity demanded
For eggs per day increased from 45 to 60. Calculate the price elasticity of demand.
(6marks)
d) Define and explain the law of diminishing marginal utility.
(5marks)
QUESTION TWO.
Describe the following concepts as used in microeconomics;
a) Consumer sovereignty
b) Scarcity and choice
c) Opportunity cost
d) The production possibility frontier
(20marks)
QUESTION THREE.
a) What are the common features of perfect competition and monopolistic competition.
(12marks)
b) Define the term price discrimination as used in economics.
(2marks)
c) Outline the necessary conditions for a firm to successfully price discriminate.
(6marks)
2
QUESTION FOUR.
a) Define demand and outline the factors that influence the demand for goods and services.
(11marks)
b) Discuss what you understand by the following terms;
i) Price elasticity of demand
(3marks)
ii) Cross elasticity of demand
(3marks)
iii) Income elasticity of demand
(3marks)
QUESTION FIVE.
a) You are given the following demand and supply functions for a commodity;
Qd = 22 – 2P
Qs = 5 + 7P
Find the equilibrium price and quantity.
(6marks)
b) Discuss determinants of elasticity of supply.
(10marks)
c) Suppose the government regulates rental prices and sets them below their
market clearing levels. Explain why shortage of houses for the poor would develop.
(4marks)
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Hbc 2107: Introduction To Microeconomics Question Paper

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