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Principles Of Agribusiness Economics Question Paper

Principles Of Agribusiness Economics

Course:Bachelor Of Education In Agriculture

Institution: Kenyatta University question papers

Exam Year:2010

UNIVERSITY EXAMINATIONS 2009/2010
INSTITUTIONAL BASED PROGRAMME
EXAMINATION FOR THE DEGREE OF BACHELOR OF EDUCATION
KBT 100: PRINCIPLES OF AGRIBUSINESS ECONOMICS
DATE: THURSDAY, 29TH APRIL 2010 TIME: 4.30 P.M. - 6.30 P.M.

INSTRUCTIONS: Answer Question 1 and any other 2 questions.

1.
(a)
Why is farm management considered an economic problem?
(5 marks)

(b)
What is market concentration and what effect does it have on market

conduct?

(5 marks)

(c)
What is income elasticity of demand? If income elastic of demand is

greater than 1, what would that mean?

(5 marks)

(d)
Briefly explain what you understand by the term diminishing marginal

rate of technical substitution.

(5 marks)

(e)
List 5 factors that are likely to affect the supply of maize in Kenya. (5 marks)

(f)
Citing an appropriate example, explain the meaning of economies

of scope.

(5 marks)

(g)
A bank loan is NOT an example of capital as a factor of production.

Do you agree or disagree? Explain briefly.

(5 marks)

(h)
State whether fixed or variable cost

(i)
Expenditures for raw materials

(ii)
Wages for unskilled labour

(iii)
Property insurance premiums

(iv)
Shipping charges

(v)
Land rates

(5 marks)

2.
Discuss why agricultural production is considered time dependant.
(15 marks)
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3.
A farmer has established that milk output from his herd varies with the amount of

concentrate feed he provides to his animals. The relationship between milk output

and concentrate feed is given in the table below.

Amount of Concentrate Milk output
Average product
Marginal Product
feed (units/day)
(Litres/day)
0
100

1
125

2
155

3
190

4
220

5
245

6
260

7
265

8
265

9
260

10
252

i)
Calculate the average product at each input level

ii)
Calculate the marginal product at each input level.

iii)
Can you tell the optimal level of input use of this farmer? If not, what additional

information do you need and how would you use it?

(15 marks)

4.
(a)
What do you understand by the term price discrimination?
(4 marks)

(b)
Discuss the different forms of price discrimination.

(11 marks)

5.
(a)
What are the main features of a perfectly competitive market?
(4 marks)

(b)
‘Most Agricultural commodities face competitive markets’. Do you

agree or disagree? Please explain briefly.

(4 marks)

(c)
Using a well labelled diagram, explain how a monopolist arrives at

equilibrium price and quantity.

(7 marks)

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Principles Of Agribusiness Economics Question Paper

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