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Hps2245:Intermediate Microeconomics Question Paper

Hps2245:Intermediate Microeconomics

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2014

QUESTION ONE (30 MARKS)
a) Suppose the demand and supply functions in a particular market are given as: Qd = 800-4P Qs = 80+8P
Required: i) Find the equilibrium price and equilibrium quantity. ( 6 Marks) ii) Explain the concept of equilibrium as used in economics. ( 3 Marks) b) Differentiate between: i) Short run production function and long run production function. ( 4 Marks) ii) Economic rent and Transfer economic. ( 4 Marks) c) Highlight the limitations of the marginal production theory. ( 5 Marks) d) Differentiate between: i) Public goods and private goods. ( 4 Marks) ii) Production externality and consumption externality. ( 4 Marks)
QUESTION TWO (20 MARKS)
a) Explain the following terms as used in economics:
i) Search theory. ( 4 Marks) ii) Gyonne theory. ( 4 Marks)
b) Suppose the short-run cost function and demand function of monopoly are Tc -1/3Q3 10Q2 +120Q + 100 P = 600 8Q
Required: i) Calculate the profit maximizing output. ( 2 Marks) ii) The price. ( 2 Marks) iii) The profit. ( 2 Marks)
c) Briefly discuss the factors that give rise to monopoly. ( 5 Marks)
QUESTION THREE (20 MARKS)
a) i) What is pareto efficient allocation. ( 4 Marks) ii) Briefly explain the main conditions required inorder to achieve pareto efficiency ( 6 Marks) b) Explain two characteristics of pure public goods. ( 4 Marks)

Hps2245:Intermediate Microeconomics Question Paper

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