(a) Distinguish between domestic trade and external trade.
(b) Distinguish between terms of trade and balance of trade
(c) Outline four causes of balance of payments deficit in a country
(a) Explain how the Central Bank controls money supply through the use of: (i) open market operation (ii) bank rate.
(b) Outline four functions performed by the Central Bank of your country.
(a) Stale three characteristics of perfect competition,
(b) With the aid of diagrams, explain equilibrium positions of a perfectly competitive firm in the: (i) short-run: (ii) long-run
(a) Define price elasticity of demand
(b) Distinguish between elastic demand and Inelastic demand
(C) Using diagrams. explain what happens to a traders total revenue demand for his product is:
(i) elastic
(ii) inelastic
(a) Define product retailing
(b) Outline any three roles performed by the wholesaler to the manufacturer
(C) ldentify any three problems associated with distribution ol products
(a) What Is economies of scale?
(b) Outline three internal economics of scale a firm can enjoy
(c) State three factors that can influence where a firm is sited.
Table 2 below show the unit prices and quantities of hats produced by a firm
Study it and answer the questions that follows
| Quantity | Unit Price (S) | Total Revenue (S) | Marginal Revenue (S) |
Average Revenue (S) |
| 10 | 180 | 1800 | – | 180 |
| 20 | 150 | 3000 | 120 | X |
| 30 | U | 3600 | 60 | 120 |
| 40 | 100 | V | W | Y |
| 50 | 80 | 4000 | 0 | 80 |
| 60 | 60 | 3600 | 40 | 60 |
a) Compute the values of U, V, W, X and Y
b) In what type of market is the firm operating? Explain your answer
c) If the firm’s marginal cost is $60.00 at all levels of output, at what level of output will it be in equilibrium? Explain your answer
d) If a total cos of $600,00 is incurred when 50 units of hats are produced. Determine the margin of profit or loss made.
e) What is another name for marginal cost?
Table 1 below shows the distribution of the population of a country in various occupations.
Study it and answer the questions that follow.
| OCCUPATION | TOTAL |
| Shoe Production Banking Fish Processing Warehousing Mining Fish Farming Food Crop Production Baking Laundry |
30 million 37 million 19 million 12.2 million 16.1 million 10.8 million 15.6 million 19 million 10.3 million |
a) Calculate the size of the entire labour force in the country
b) What percentage of the labour force is engaged in the
(i) Primary sector
(ii) Secondary sector
(iii) Tertiary sector
c) Calculate the ratio of the workers in mining to the workers in shoe production
d) Calculate the percentage of the people engaged in warehousing
e) (i) Identify the type of economy depicted in the table
(ii) Give a reason for your answer in (e)(i)
Abundant natural resources do not contribute to economic growth in developing countries because of_________
- A. high rate of inflation
- B. urban congestion.
- C. over-reliance on multiple commodities.
- D. mismanagement and corruption.
Examples of land that are non-renewable include___________
- A. marshy and water-logged land.
- B. farmland already used tor many years.
- C. some natural resources such as natural gas.
- D. oxygen and carbon dioxide in the atmosphere
Balance of payments and trade problems that arose after the world wars were resolved by the____________
- A. International Bank tor Reconstruction and Development.
- B. International Monetary Fund.
- C. African Development Bank.
- D. Organization of Petroleum Exporting Countries.
A customs union is an economic grouping which has___________
- A. free movement of factors of production
- B. common tariffs against non-Members.
- C. common currency for trading
- D. common military defence
A country may be able to earn more from exports if she_____________
- A. increase her export duty
- B. devalues her currency
- C. increases her import duty
- D. allows her currency to appreciate
If a country imposes a barrier on trade, the resultant effect will be _________
- A. a halt in buying and selling
- B. high quality goods from local industries
- C. an increase in the demand for locally produced goods
- D. shutdown of infant industries
If a country’s import bill is high, she can encourage exports by___________
- A. Allowing her currency to depreciate
- B. Allowing her currency to appreciate
- C. Liberalizing importation
- D. Increasing taxes on all locally produced goods
Records of a country’s invisible trade are recorded in her_____________-
- A. Trade account.
- B. Capital account.
- C. Current account
- D. Financial account.
A measure that can be adopted to correct a country ‘s balance of payments deficit is ____________
- A. Allow the currency to appreciate to encourage imports.
- B. Allow the currency to depreciate to encourage imports
- C. Adopt import substitution strategy
- D. Restrict trade with all countries
A floating exchange rate means that the exchange rate is fixed by the __________
- A. Central bank of the country
- B. Forces of demand and supply
- C. International monetary fund (IMF)
- D. Ministry of Finance
People who dispose of their assets are expected to pay ______________
- A. value added tax
- B. capital gains tax
- C. expenditure tax
- D. sales tax
In order to enable the government of a country to increase its tax revenue, it will be advisable for it to increase taxes on_______
- A. Textile materials with elastic demand
- B. Alcoholic beverages with inelastic demand
- C. Agricultural products with inelastic supply
- D. Luxury goods with elastic supply
When a government cuts down her expenditure to reduce inflation, she has embarked on___________
- A. A restrictive Fiscal policy.
- B. An expansionary monetary policy.
- C. Physical policy.
- D. Implementing budget deficit