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CPA Economics – April 2026 Past Paper & Answers

Unit: Economics

16 Questions

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Questions

Download CPA Economics April 2026 past paper with detailed answers and marking scheme. This paper is based on KASNEB examination standards and is ideal for revision and exam preparation.

Access the full paper online, download the PDF, or study offline. Each question includes step-by-step solutions to help you understand key concepts in Economics.

1a
Introduction to economics
​​Explain FOUR characteristics of a good economic system.
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1b
Demand, supply and determination of equilibrium
​​(i) Define the term “marginal utility” as used in economics.  

(ii) With the aid of a well-labelled diagram, illustrate the law of diminishing marginal utility and explain its implication for consumer behaviour.  
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1c
Inflation and unemployment
​​State FOUR causes of inflation in an economy.
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1d
Demand, supply and determination of equilibrium
​​Examine THREE factors that influence the supply of a commodity.
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2a
Demand, supply and determination of equilibrium
​​Distinguish between “price elasticity of demand” and “cross elasticity of demand’’.
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2b
Demand, supply and determination of equilibrium
​​The demand function for a commodity is given as: QD = 120 – 3P. 
 Where QD is quantity demanded and P is price. 

Required: 
(i) Determine the price elasticity of demand when price is Sh.20. 
 
(ii) Explain THREE types of price elasticity of demand.  
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2c
Demand, supply and determination of equilibrium
​​Outline FOUR effects of price ceiling on market performance.
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2d
Demand, supply and determination of equilibrium
​​Explain FIVE causes of price fluctuations in agricultural markets.
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3a
Demand, supply and determination of equilibrium
​ ​ ​​Consumer behaviour theory explains how rational consumers allocate limited income among competing wants.  
 
Required: 
With reference to the above statement: 
 
(i) Explain FOUR assumptions of indifference curve analysis.  
 
(ii) Using a well labelled diagram, explain consumer equilibrium. 
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3b
Inflation and unemployment
​​Analyse THREE causes of cyclical unemployment in an economy.
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3c
Money and banking
​​Evaluate FOUR limitations of fiscal policy in achieving macroeconomic stability.
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4a
Demand, supply and determination of equilibrium
​​Explain FOUR stages of production in the short run.
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4b
Demand, supply and determination of equilibrium
​​Distinguish between “internal economies of scale” and “external economies of scale”.
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4c
Demand, supply and determination of equilibrium
​​With a well labelled diagram, illustrate the short run equilibrium of a perfectly competitive firm.
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4d
Demand, supply and determination of equilibrium
​​Describe THREE sources of monopoly power.
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5
National income Economic growth, economic development and economic planning Money and banking Inflation and unemployment
​​(a) Explain THREE methods of measuring national income. 
 
(b) Outline FOUR determinants of economic growth in developing countries.  
 
(c) Explain FOUR roles of the central bank in regulating the banking system in an economy.  
 
(d) Summarise THREE advantages of international trade.  
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