A consumer of a single commodity is in equilibrium when
- A. his marginal utility is equal to zero
- B. he can equate his demand with price
- C. he equates marginal utility and price
- D. he can equate his marginal and total utilities
Which of the following industries will add more value to primary products?
- A. Construction industry
- B. Processing industry
- C. Mining industry
- D. Service industry
An example of transfer payments in national income accounting is
- A. money transferred to another country
- B. transfer of funds from one bank to another
- C. unemployment allowance paid to the citizens
- D. the amount paid to a worker on transfer
In perfectly elastic supply, the supply curve
- A. is vertical
- B. is horizontal
- C. slopes downward
- D. slopes upward
Which of the following factors is not a cause of diminishing returns?
- A. Increase in variable inputs
- B. constant technology
- C. Land fragmentation
- D. Technological innovations
Gross National Product (GNP) less the provision for the wear and tear of assets is the
- A. net factor income
- B. net indirect taxes
- C. net national product
- D. net present value
Scale of preference shows
- A. opportunity cost of goods consumed
- B. incomes of consumers in order of size
- C. utilities enjoyed by consumers
- D. consumer's wants in order of priority
The use of the bank rate, cash ratio and open market operations constitute
- A. monetary policy
- B. export policy
- C. fiscal policy
- D. import policy
If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
- A. 2.00
- B. 0.50
- C. 0.65
- D. 2.50
Cooperative societies are formed mainly to
- A. break the monopolies of private companies
- B. encourage thrift and credit among members
- C. assist producers to maximize their profits
- D. promote and maintain the welfare of members
Which of the following factors is not a cause of change in demand? Changes in
- A. the size of the population
- B. price of the commodity
- C. income distribution
- D. taste and fashion
A minimum price legislation is also called
- A. price ceiling
- B. price mechanism
- C. price control
- D. price floor
The sufficient condition for a firm to be in equilibrium is that the
- A. marginal revenue curve is above the average revenue curve
- B. marginal cost curve cuts the marginal revenue curve from below
- C. firm must show that it is profitable
- D. marginal cost must be equal to average revenue
(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)