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Ccs 009: Elements Of Economics Question Paper

Ccs 009: Elements Of Economics

Course:Bachelor Of Science In Computer Science

Institution: South Eastern Kenya University question papers

Exam Year:2011

First Year First Semester Examination
2011/2012 Academic Year
Bachelor of Science in Computer Science
Bachelor of Information Technology
Bachelor of Science in Statistics

CCS 009: Economics/Elements of Economics

18 AUGUST 2011 Duration: 2 Hours

INSTRUCTIONS TO CANDIDATES

a) ANSWER ALL QUESTIONS IN SECTION A
b) ANSWER ANY THREE QUESTIONS IN SECTION B.

SECTION A (40 MARKS)
Question one
Define the following terms
a. Scarcity 2 marks
b. Public goods 2 marks
c. Effective demand 2 marks
d. Market Equilibrium 2 marks

Question two
Explain the key characteristics of each of the following economic systems
a. Free enterprise economy 4 marks
b. Planned economy 4 marks

Question three
a. Discuss how opportunity cost is related to the problem of scarcity 4 Marks
b. Explain how resources are allocated in
i. Planned economy 2 marks
ii. Mixed economy 2 Marks

Question four
Explain four factors that affect individual demand for goods and services 8 marks

Question five
Explain the following using appropriate diagrams
a. Indifference curve 4 Marks
b. Marginal rate of substitution 4 Marks

SECTION B (60 MARKS)
Question six
a. Using graphs, demonstrate and explain the concept of market equilibrium 10 Marks
b. Explain the role of price in a free market economy 10 marks

Question seven
Under perfectly competitive market, a firm’s output does not have a significant effect on the market price. Using diagrams, explain the equilibrium position of a firm in perfect competition
a. in the short run (10 Marks)
b. in the long run (10 Marks)

Question eight
a. Define the following terms
i) Marginal physical product
ii) Economies of scale and diseconomies of scale
iii) Marginal rate of technical substitution
iv) Constant returns to scale
v) Long run cost
(2 Marks each)
b. Describe the following costs as used in production of goods and services
i) Total cost
ii) Average cost
iii) Total variable cost
iv) Average variable cost
v) Average fixed cost
vi) Marginal cost
(2 Marks each)

Question nine
Demonstrate and explain using a diagram how firms maximize profits under perfect competition. 20 marks

Question ten
10. a. State the law of diminishing marginal utility 2 Marks
b. Using indifference curves, demonstrate the income and substitution effects from a
rise in the price of a normal good. 18 Marks

Ccs 009: Elements Of Economics Question Paper

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