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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:2011

QUESTION ONE 30 MARKS
a. Define the term market equilibrium. (2 Marks) b. With the aid of a suitable diagram, explain the concept of unstable equilibrium. (8 Marks) c. Given the two commodity market for two related products of tea and coffee, as follows:
i. QdT = 164 6PT + 2PC Where: QST = -10 + 30PT QdT Quantity demanded for tea ii. QdC = 184 + 4PT 8pC. QST Quantity Supplied of tea QSC = -12 + 64PC PT Price of tea PC Price of coffee QdC Quantity demanded for coffee QSC Quantity Supplied of coffee
Determine:
i. The price of tea (7 Marks) ii. The price of coffee (4 Marks) iii. Quantity demanded for tea. (3 Marks) iv. Quantity demanded supplied for tea. (2 Marks) v. Quantity demanded for coffee (2 Marks) vi. Quantity supplied for coffee. (2 Marks)
2
QUESTION TWO 20 MARKS
a. Briefly explain the term search theory as used in economics. (5 Marks) b. With the aid of a diagram explain the intermediate application of disequilibrium analysis as illustrated by the convergence cobweb theorem. (12 Marks) c. Highlight three consequences of maximum price control. (3 Marks)
QUESTION THREE 20 MARKS
a. Define the following terms: i. Public goods (2 Marks) ii. Private goods (2 Marks) iii. Production externality (2 Marks) iv. Consumption externality (2 Marks) b. Explain six features of a perfect competitive market. (12 Marks)
QUESTION FOUR 20 MARKS
a. State and explain five sources of monopoly power. (10 Marks) b. Explain and illustrate the concept of super normal profit under perfect competitive market. (10 Marks)
QUESTION FIVE 20 MARKS
a. Using clear illustrations, derive the short run supply curve of a perfectly competitive market. (10 Marks) b. Explain the effects of price decontrol. (10 Marks)

Hps2245:Intermediate Microeconomics Question Paper

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