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Bus0160;Introduction To Economics Question Paper

Bus0160;Introduction To Economics

Course:Diploma In Agriculture

Institution: Meru University Of Science And Technology question papers

Exam Year:2011

QUESTION ONE – (30 MARKS)
(a) Explain the relationship between scarcity, choice and opportunity cost. (6 Marks) (b) Explain the following: (4 Marks) (i) Cross elasticity of demand (ii) Income elasticity of demand (c) Differentiate between the following terms as used in development economics. (6 Marks) (i) Gross Domestic Product versus National Product. (ii) Gross National Product versus Net National Product. (iii) Personal Income versus Disposable Personal income. (d) Explain the types of economic systems. (9 Marks) (e) The schedule below shows the effect of changing the price of commodity X1 to the quantity demanded of commodity X2. Price of X1(PX1) 100 150 Quantity demanded of X2(QX2) (i) Calculate the elasticity between the two products. (3 Marks) (ii) State the relationship between the two products. (2 Marks)
QUESTION TWO – (15 MARKS)
Using relevant graphical illustrations explain the following:
2
(a) Total costs (TC) (3 Marks) (b) Variable costs (VC) (3 Marks) (c) Fixed costs (FC) (3 Marks) (d) Marginal costs (MC) (3 Marks) (e) Average costs (AC) (3 Marks)
QUESTION THREE – (15 MARKS)
State and explain the importance of national income statistics. (15 Marks)
QUESTION FOUR – (15 MARKS)
(a) State and explain the methods used in calculating national income. (7 Marks) (b) Explain the role of commercial banks to the business community. (8 Marks)

Bus0160;Introduction To Economics Question Paper

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