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Hbc2205:Intermediate Micro Economics Question Paper

Hbc2205:Intermediate Micro Economics

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2012

QUESTION ONE (30 MARKS)
(a) Explain in details the concept of equilibrium as used in economics. ( 3 Marks) (b) Distinguish between perfectly competing market and monopoly. ( 6 Marks) (c) Discuss the main sources of monopoly power and specify what gives rise to natural monopoly. ( 6 Marks) (d) The following information relates to the demand and supply function in a particular market. Qd = 400 Qd = 200-2P Qs = 20 +4P Required: Find the equilibrium level of price & quantity ( 10 Marks)
(e) With the aid of a well labelled diagram show the relationship between MC, ATC, and TVC. ( 5 Marks)
QUESTION TWO ( 20 MARKS)
(a) Given the following total revenue and total cost function, determine the profit maximising output and the profits of the firm. ( 10 Marks) TR = 2000Q – 4Q2 TC = Q3 – 60Q2 + 132Q + 2000
(b) With examples for the Kenyan economy describe the main characteristics of pure public goods. ( 10 Marks)
QUESTION THREE ( 20 MARKS)
(a) Discuss the three stages of production. ( 8 Marks) (b) The following information relates to a production function. (c) C = 0.052 x3 – 0.6x2+20+15 Where C = total cost X = Output Required: Find TFC, AFC, AVC,ATC & MC ( 12 Marks)
QUESTION FOUR ( 20 MARKS)
(a) Explain the term pareto efficient allocation. ( 4 Marks) (b) Differentiate between transfer earnings and economic rent. ( 10 Marks) (c) Explain how a firm operating under monopolistic competition may achieve equilibrium in the short run. ( 6 Marks)

Hbc2205:Intermediate Micro Economics Question Paper

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