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Hbc2102:Introduction To Business Question Paper

Hbc2102:Introduction To Business

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2012

Outline the advantages of a centrally planned economic system to a (2 Marks) country.
2
QUESTION TWO – 20 MARKS
a) Explain the factors that influence price elasticity of demand. (6 Marks)
b) Describe the economic applications of the concept of elasticity of demand (6 Marks)
c) The demand for a commodity is five units. When the price is Ksh1,000 per unit. When the price per unit falls to Ksh.600, the demand rises to six units. Compute the (i) Point elasticity of demand (4 Marks) (ii) Arc elasticity of demand (4 Marks)
QUESTION THREE – 20 MARKS
a) The table below illustrates the productions schedule of a maize farmer with one variable input: fill in the gaps (6 Marks)
Units of Land Units of Labour (N)
Total Production (Tons)
Average Product (Tons)
Marginal Product (Tons)
20 0 0 20 1 18 20 2 23 20 3 78 20 4 42 20 5 29
b) Given the cost function: C = 0.07Q3 - 0.9Q2 + 100Q + 500 Calculate the following: i) Total fixed cost ii) Total Variable cost iii) Average fixed costs iv) Average total costs v) Marginal cost (10 Marks)
c) Using diagrams, explain the relationship between average fixed costs, average variable cost, average total cost and marginal costs. (4 Marks)
3
QUESTION FOUR – 20 MARKS
a) Explain the main features of a perfectly competitive market. (6 Marks)
b) Using diagrams, illustrate perfectly competitive market. Exhibiting the following scenarios. i) Abnormal profits (4 Marks) ii) Normal profits (4 Marks)
c) Distinguish between differentiated oligopoly and homogeneous oligopoly (4 Marks)
d) Define a monophony (2 Marks)
QUESTION FIVE – 20 MARKS
a) Given the following equations 36 – Q = 1/2P 1/2P – Q = 20
i) Identify with reasons which of the above equations represent demand and supply functions. (4 Marks) ii) Calculate the equilibrium values of price and quantity and give economic interpretation of your results. ( 6 Marks)
b) Describe the stages of production. What is the optimal stage for a producer to operate in and why? Illustrate your answer. (6 Marks)
c) Distinguish between change in demand and change in quantity demanded. (4 Marks)

Hbc2102:Introduction To Business Question Paper

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