Get premium membership and access revision papers, questions with answers as well as video lessons.

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

QUESTIONONE (30 MARKS)
a. Explain the concept of equilibrium as used in economics (3 Marks) b. Differentiate between: i. Changes in demand and changes in quantity demanded. (6 Marks) ii. Diminishing marginal returns and decreasing returns to scale (6 Marks) iii. Short run production function and the long run production function (5 Marks) c. Given two production functions Q = 2L0.7, K0.8, which production function yields the highest output for any given increase n L and L? (10 Marks)
QUESTION TWO (20 MARKS)
a. Distinguish between perfectly competitive market and monopoly. (6 Marks) b. Suppose the demand and supply functions in a particular market are given as : Qd = 400 4p Qs = 40 8p Required: Find the equilibrium level of price and quantity. (6 Marks) c. Graphically show the relationship between MC, ATC and ATVC. (8 Marks)
QUESTION THREE (20 MARKS)
a. Explain the term natural monopoly. (4 Marks) b. Discuss the main sources of monopoly power and specify what gives fries to natural monopoly. (6 Marks)
2
c. Given the following total revenue and total cost functions, determine the profit maximizing output and the profits of the firm. TR = 1000Q 2Q2 TC = Q3 59 Q2 + 131 Q + 2000 (10 Marks)
QUESTION FOUR (20 MARKS)
a. Discuss the three stages of production. (8 Marks) b. Given the following: C = 0.052 x3 0.6 x2 + 20 x + 15 Where C = Total Cost X = Output Required: Find TFC, AFC, TVC, AVC, ATC and MC. (12 Marks)
QUESTION FIVE (20 MARKS)
a. Discuss the relevance of principle of non-exclusion in explaining the presence of public goods in an economy. (3 Marks) b. Explain the term pareto efficient allocation. (3 Marks) c. The initial endowments of two consumers Jackline and Nicholas is as follows:
Consumer Bananas Oranges MRS
Jackline 2 8 -2
Nicholas 9 3 -1
i. From the information provided would consider the allocation between the two consumers efficient? Explain (3 Marks) ii. If the allocation is not efficient what exchange between the two consumers would be mutually beneficial? (3 Marks) iii. Explain whether there is any other exchange that would also have been of benefit to both consumers. ( 3 Marks)

Hbc2205:Intermediate Micro Economics Question Paper

More Question Papers

Popular Exams