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April 2022

Unit: Economics

17 Questions

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Questions

1a
Economic growth, economic development and economic planning
​​ Discuss five challenges encountered by planned economic system in their transition to market oriented economies.
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1b
Demand, supply and determination of equilibrium
​​Explain three exceptions to the law of demand.
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1c
Demand, supply and determination of equilibrium
​​Outline four determinants of the elasticity of supply.
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2a
Demand, supply and determination of equilibrium
​ ​​With the aid of appropriate diagrams, describe three properties of indifference curves.
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2b
Demand, supply and determination of equilibrium
​​With reference to the theory of consumer behaviour, highlight five assumptions of maximisation of utility.
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2c
Demand, supply and determination of equilibrium
​​Examine three applications of the concept of consumer surplus in economies.
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3a
Demand, supply and determination of equilibrium
​ ​ ​​(i) Explain four assumptions underlying the theory of imperfect competition.

(ii) With an aid of a diagram, explain the long run equilibrium of a firm operating in imperfect competition.

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3b
Demand, supply and determination of equilibrium
​​Explain six factors that influence the mobility of labour as a factor of production.
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4a
Economic growth, economic development and economic planning
​​Assess five forms of economic integration as used in international trade.
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4b
Demand, supply and determination of equilibrium
​ ​ ​ ​​The table below shows the total variable cost of a firm at different production levels:

Level of output
Total variable cost
Sh.

0
0
1
60,000
2
110,000
3
140,000
4
150,000
5
150,000
6
170,000
7
210,000
8
260,000

The total fixed cost of the company is Sh.150,000. 

Required: 
(i) The average cost of production for each output level. 

(ii) The marginal cost of production for each output level. 

(iii) The profit maximising level of output.
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5a
National income
​ ​​The following table shows the level of National income (Y), Consumption (C), Investment (I), Government Spending (G), Exports (X) and Imports (M) of an utopian country for the years 2020 and 2021:

Year
Y
$
C
$
I
$
G
$
X
$
M
$

2020
80,000
?
10,000
40,000
100,000
120,000
2021
90,000
56,000
15,000
34,000
110,000
?

Required: 
Compute the following: 
(i) The level of consumption in the year 2020. 

(ii) The marginal propensity to consume. 

(iii) The level of imports for the year 2021. 

(iv) The marginal propensity to import.
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5b
National income
​​(i) Explain the term "per capita income". 

 (ii) Enumerate four limitations of using per capita income as a measure of welfare.
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5c
National income
​​Highlight four factors that limit the effectiveness of the multiplier in developing countries.
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6c
Demand, supply and determination of equilibrium
​​ (i) Describe three economic characteristics of enterprise as a factor of production. 

(ii) Explain four importance of profits in a market economy.
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7a
Money and banking
​​Summarise four impacts of expansionary monetary policy in an economy.
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7b
Inflation and unemployment
​​Citing real life examples, distinguish between the following types of unemployment: 

(i) "Seasonal unemployment" and "casual unemployment".

(ii) "Disguised unemployment" and "unproductive unemployment".
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7c
Economic growth, economic development and economic planning
​​(i) With reference to economic growth and development, explain the term "potential growth". 

(ii) Examine six benefits of economic growth and development.
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