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Hcob2505:Production Economics Question Paper

Hcob2505:Production Economics

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2012

QUESTION ONE – (30 MARKS)
(a) With the use of a diagram discuss the stages of production implied by the law of diminishing returns. (15 Marks) (b) On the basis of the theory of comparative advantage, determine the products that each of the countries below should specialize in their production. (10 Marks) Country Cost of producing one unit (in man hours) Product A Product B Country 1 16 18 Country 2 24 20
(c) Explain the concept of the isolist line. (5 Marks)
QUESTION TWO – (20 MARKS)
(a) Explain the properties of isoquants. (10Marks) (b) Discuss the various disadvantages of specialization. (10 Marks)
QUESTION THREE – (20 MARKS)
(a) Mobility of factors of production is important in a number of ways. Discuss. (12 Marks) (b) Distinguish between: (i) Short run and long run (4 Marks)
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(ii) Occupational mobility and geographical mobility. (4 Marks)
QUESTION FOUR – (20 MARKS)
(a) Discuss various factors that contribute to external economies of scale. (10 Marks) (b) The theory on comparative advantages has several limitations. Elaborate (10 Marks)
QUESTION FIVE – (20 MARKS)
(a) Advise the Kenyan government on some policies that can be used to enhance occupational mobility of labour. (12 Marks) (b) Given the following total cost function: = 100 + 16 802+123 (i) Derive the MC function (ii) Derive the A.C function (iii)Calculate the MC and AC when Q is 12 units. (8 Marks)

Hcob2505:Production Economics Question Paper

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