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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 (COMPULSORY)
(a) Briefly explain the following terms as used in production terms as used in production. (i) Consumer goods (ii) Producer goods (iii) Services (6Marks)
(b) State five advantages of specialization. (5Marks)
(c) Highlight five barriers to geographical mobility of labour. (5Marks)
(d) You are given the following production function Q = A.K. L. Where Q is output, L and K are labour and capital inputs and A,
(i) Determine the Average Product of Labour. (2Marks) (ii) Determine the Average Product of Capital. (2Marks) (iii) Express the ApL in terms of Q and K. (6Marks) (iv) If the corresponding Marginal Product of Labour is MPL = AK L-1, express the MPL (4Marks)
QUESTION TWO
(a) With aid of a suitable diagram, explain the production possibility frontier concept. (10Marks)
(b) Explain five causes of unemployment in developing countries. (10Marks)
2
QUESTION THREE
(a) Define the term non-specific factors of production. (2Marks) (b) Citing examples, explain how the following can be non-specific factors of production. (i) Land (2 Marks) (ii) Labour (2 Marks) (iii) Capital (2 Marks) (c) (12 Marks)
QUESTION FOUR
(a) Explain the limitations of the theory of Comparative Advantage. (10Marks) (b) State and explain the internal economies of scale to a firm. (10Marks)
QUESTION FIVE
(a) Briefly explain the following term (i) Risks (5Marks) (ii) Uncertainty (5Marks)
(b) Explain the law of diminishing returns with aid of a diagram. (10Marks)

Hcob2505:Production Economics Question Paper

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