Unit: Economics
20 Questions
(i) Price elasticity of demand.
(ii) Income elasticity of demand.
(iii) Cross elasticity of demand.
(ii) Outline six application of the indifference curve analysis.
(ii) Using a well labelled diagram, illustrate the optimal size of the firm.
(ii) Highlight factors that influence the production function.
(ii) Suggest five policy measures that should be put in place by developing countries to help improve the agricultural sector.
Y = C + I + G + (X – M)
C = 200 + 0.8Yd
T = 20 + 0.2Y
I = 70
G = 50
X = 40
M = 60
Where:
Y = National income
C = Consumption expenditure
I = Investment
G = Government expenditure
Yd = Disposable income
T = Taxes
X = Export
M = Import
Required:
The equilibrium level of:
(i) National income.
(ii) Consumption.
(iii) Taxes.
P = 75 – 0.5Q
TC = 80 + 20Q
Where:
P = Price in shillings
TC = Total cost
Q = Quantity in units produced and sold
Required:
(i) The level of output that would maximise profits.
(ii) The maximum profit.
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