The extract from a countryβs balance of payments account is shown below.
| Item | Import ($ million) | Export ($ million) |
| Agricultural products | —— | 200 |
| Mineral products | —– | 300 |
| Consumer goods | 250 | —- |
| Capital goods | 400 | —- |
| Insurance | 50 | 25 |
| Banking | 75 | 30 |
| Transportation | 85 | 25 |
| Loans | 150 | 60 |
Using the table above, calculate the:
(a) Balance of trade;
(b) Invisible trade balance;
(c) Balance on current account.
The diagram below represents the equilibrium position of a firm in a perfectly competitive industry. Study it and answer the questions that follow.
(a)(i) Equilibrium output is 50kg and equilibrium price is $20.00
(ii) Firm’s party = TR – TC
TR = 50kg x $20.00 = $1000.00
TC = 50kg x $12.00 = $600.00
profit = $1000.00 – $600.00 = $400.00
OR
Profit = (AR – AC) * Q
= ($20.00 – $12.00) * 5
= $8.00 x 50
= $400.00
(iii) Abnormal/economic/supernormal profit. This is because the profit is earned at a point where price (AR) is greater than AC.
(b) The average revenue function is horizontal because in perfect competition, AR which is also the price is constant/fixed.
(c) (i) When MC is less than ATC, ATC is falling.
(ii) When MC is equal to ATC, ATC is at its minimum.
(iii) When MC is greater than ATC, ATC is rising.
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(a) What is economic integration?
(b) Distinguish between a free trade area and a customs union.
(c) Describe two advantages and two disadvantages of free trade area
(a) Explain any four causes of demand-pull inflation.
(b) Outline any four undesirable effects of inflation.
(a) What is unemployment of labour?.
(b) With an example each, explain the following types of unemployment:
(i) frictional unemployment;
(ii) structural unemployment;
(iii) seasonal unemployment.
(c) Outline any four causes of unemployment in a country.
(a) What is money?
(b) Outline any three characteristics of money.
(c) Explain an effect of inflation on each of the functions of money.
(a) Define labour force.
(b) Explain the following concepts with an example each:
(i) occupational mobility of labour;
(ii) geographical mobility of labour.
(c) Outline four factors that can influence the size of the labour force in a country
(a) State Professor Robbinsβ definition of Economics.
(b) Explain the following concepts:
(i) opportunity cost;
(ii) scale of preference;
(iii) production possibility curve.
(c) Outline three reasons for the study of Economics as a Subject.
The table below shows the percentage age distribution of population of country Y in 2010. The population was 200,000. Use the information in the table to answer the questions that follow.
| Age group (year) | 0 – 18 | 19 – 40 | 41 – 60 | 60 and above |
| percentage distribution pf population | 30% | 35% | 25% | 10% |
(a) Calculate the size of the
i. working population
ii. dependent population
(b) If the population (0 -18) years is increased by 2% and 0.5% of the ages 61 years and above have died, what is the natural increase in the population.
(c) How will you describe the age distribution of the population? Give a reason for your answer..
The table below shows the cost of production and output of maize. The price of maize is fixed $20.00. Use the information to answer the questions that follow.
| Maize (bags) | Total Variables ($) | Total cost ($) | Total Revenue ($) |
| 0 | 0 | 10 | 0 |
| 1 | 8 | w | 20 |
| 2 | 10 | x | 40 |
| 3 | u | 25 | y |
| 4 | v | 32 | z |
| 5 | 28 | 38 | 100 |
a. what is the value of total cost? Give a reason for your answer.
b. Calculate the values of u,v,w,x,y and z
c. Calculate the profit levels 1 and 4
d. In what market structure is the firm operating? Give a reason for your answer.
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