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Introduction To Micro-Economics Question Paper

Introduction To Micro-Economics

Course:Bachelor Of Arts In Economics

Institution: Moi University question papers

Exam Year:2009

Question one (a)Define microeconomics and briefly state the importance and its limitations5mks (b)Using diagrams , explain circustances under which the demand curve; (i)Extends and contracts along the demand curve-6mks (ii)The demsnd curve shifts from its original position-6mks (c)Using a table and diagram , explain the law of diminishing marginal utility and state its exceptions-8mks Queston two (a)Define the term indiffernce curves .With help of a diagram show how equilibrium is attained using the indifference curve technique-9mks (b)Why does the marginal rate of substitution decline from left to right along the indifference curve?-8mks (c)Using indifference curve analysis distinguish between the income and sustitution of price change-8mks Question three Write short notes onthe following: (a)Difference between a giffen good and inferior good (b)Consumer surplus and producer surplus (c)Production function (d)Difference between marginal rate of technical substitution and marginal rate of substitution.-25mks Question four (a)Using diagrams, explain how to derive a budget line and state the effects of price change and income change on the budget line-15mks (b)Using a diagram, explain the law of non propotional returns and state its limitations.-10mks Question five (a)What factors influence the supply of a commodity in the market-5mks (b)Explain the shape and relationship between AC,AVC,MCand AFC curves using relevant disgrams-5mks (c)Wht is the significance of the concept of elasticity in practical life-7mks (d)Using diagrams,eplain various properties of Iso products-8mks Question six (a)Explain why the marginal revenue curve lies below the average revenue curve in a monopolistic firm-10mks (b)Illustrate diagramatically output levels for both profit maximizing and the loss making monopolistic firm in the short run, Give brief explanaton-15mks

Introduction To Micro-Economics Question Paper

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