Hrd2103:General Economics Question Paper
Hrd2103:General Economics
Course:Bachelor Of Horticulture
Institution: Meru University Of Science And Technology question papers
Exam Year:2013
QUESTION ONE (30 MARKS)
a) Distinguish between the following terms: i. Scarcity and choice. (2 Marks) ii. Economics and non-economic resources. (2 Marks) iii. Opportunity cost and production possibility frontier. (2 Marks) b) Explain four factors which cause the demand curve to shift to the right. (4 Marks) c) Given that the supply function of product Zed is ???? = -10 + 6?? and the demand function is ???? = 30 - 4??, determine the equilibrium price and quantity. (4 Marks) d) The government may use fixed policy to intervene in the economy. Identify three ways in which this policy can be achieved. (3 Marks) e) Explain why money is referred as a store of value. (3 Marks) f) Explain four intermediate objectives of macroeconomic policy. (4 Marks) g) Explain with the aid of a diagram the ordinalist concept of consumers equilibrium. (6 Marks)
QUESTION TW0 (20 MARKS)
a) Discuss four internal technical economies of scale that may accrue to a firm as it expands its operations. (8 Marks) b) Explain six limitations of using National income statistics to compare standards of living in different countries. (12 Marks)
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QUESTION THREE (20 MARKS)
a) A monopoly firm is faced with the following demand function ?? = 13 - 0.5??. The marginal cost function for the firm is given by 3 + 4?? and the total fixed cost is 4. Determine: i. The profit maximising output. (5 Marks) ii. The level of supernormal profit if any. (3 Marks) iii. The output level at break-even point. (2 Marks) b) Explain any five factors that influence the elasticity of supply. (10 Marks)
QUESTION FOUR (20 MARKS)
a) Explain how the concept of elasticity guides decisions in the following situations; i. Government tax policy on household consumptions. (3 Marks) ii. Devolution policy to encourage exports and discourage imports. (3 Marks) iii. Price discrimination by a monopolist. (2 Marks) b) Illustrate and explain the three stages associated with the law of variable proportions. (12 Marks)
QUESTION FIVE (20 MARKS)
a) Discuss any four instruments of monetary policy used to control and regulate money supply by the central banking authorities. (12 Marks) b) Discuss four main reasons why most developing countries in Africa have not realised the full benefit of international trade. (8 Marks)
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