KASNEB Economics - Question 1a

Highlight four steps followed in the scientific method used in economics.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 1b

Enumerate five factors that determine the price elasticity of supply of a commodity. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 1c

Using indifference curve analysis, derive the Engel's curve of a normal good.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 1d

Summarise five applications of opportunity cost in decision making.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 2a

With the aid of a well labelled diagram, describe the cobweb model as used in economics.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3a

Explain the difference between 'real' and 'pecuniary' economies of scale of a firm.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3b

Outline four limitations of the cardinal approach to the theory of consumer behaviour.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3c

State three reasons why the demand curve slopes downwards.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4a

Highlight four salient features of a monopolistic competition market structure.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 5a

Explain the monetarists view on the quantity theory of money.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 5b

Enumerate four exceptions to the law of supply.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6a

Argue the case for and against regional economic integration by developing countries.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7a

Describe five causes of balance of payment deficits in developing countries... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7b

Outline six limitations of the theory of comparative advantage... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7c

Summarise nine reasons why unemployment is a major policy issue in developing countries... [Click to view full question and step-by-step solution]

May 2017

Q: KASNEB Economics - Question 2c

(i) Explain the term 'cross elasticity of demand.'(ii) The following data relate to a consumer in a certain market:Price of commodity x(Sh.)1216202428Quantity c... [Click to view full question and step-by-step solution]

1a

Introduction to economics

Highlight four steps followed in the scientific method used in economics.

1b

Demand, supply and determination of equilibrium

Enumerate five factors that determine the price elasticity of supply of a commodity.

1c

Demand, supply and determination of equilibrium

Using indifference curve analysis, derive the Engel's curve of a normal good.

1d

Introduction to economics

Summarise five applications of opportunity cost in decision making.

2a

Demand, supply and determination of equilibrium

With the aid of a well labelled diagram, describe the cobweb model as used in economics.

2b

National income

With reference to the theory of production, discuss five factors that could lead to:
(i) Increasing returns to scale.
(ii) Decreasing returns to scale.

2c

Demand, supply and determination of equilibrium

(i) Explain the term "cross elasticity of demand."
(ii) The following data relate to a consumer in a certain market:

Price of commodity x
(Sh.)
12
16
20
24
28

Quantity consumed of commodity y
(Units)
80
100
120
140
160

Required:
The cross elasticity of demand. Comment on the relationship between commodity x and commodity y.

3a

National income

Explain the difference between "real" and "pecuniary" economies of scale of a firm.

3b

Introduction to economics

Outline four limitations of the cardinal approach to the theory of consumer behaviour.

3c

Demand, supply and determination of equilibrium

State three reasons why the demand curve slopes downwards.

3d

National income

The following data relate to the nominal and real gross national product (GNP) levels of a certain economy for the years 2011 and 2016:

Year

2011
2016

Nominal GNP
(Sh. billion)
1,085
1,850

Real GNP
(Sh. billion)
1,085
1,275

Required:
(i) The gross national product implicit price deflator for the years 2011 and 2016. Interpret your results
(ii) Using year 2011 as the base year, determine the inflation rate for the economy.

3e

Demand, supply and determination of equilibrium

With the aid of an appropriate diagram, explain the condition under which a firm operating under perfect competition market structure would make supernormal profits in the short-run.

4a

Demand, supply and determination of equilibrium

Highlight four salient features of a monopolistic competition market structure.

4b

Economic growth, economic development and economic planning

Suggest six economic reforms that could be put in place to boost the growth of the informal sector in developing countries

4c

Demand, supply and determination of equilibrium

The demand and supply functions of a certain commodity are given as follows:

Qd = 300 - 0.4p
Qs = -400 + 0.6p

Where:

Qd is the demand function.
Qs is the supply function
p is the unit price of the commodity

Required:
The equilibrium price and quantity of the commodity.

5a

Money and banking

Explain the monetarists view on the quantity theory of money.

5b

Demand, supply and determination of equilibrium

Enumerate four exceptions to the law of supply.

5c

Money and banking

Recently, there have been deliberate attempts to control the rate of interest in some of the developing countries
In view of the above statement, explain five advantages of interest rate decontrols in an economy

5d

National income

(i) Distinguish between the "multiplier" and the "accelerator" as used in national income statistics
(ii) Explain four factors that could limit the application of the multiplier in developing countries.

5e

Demand, supply and determination of equilibrium

The following information relates to the demand of a commodity in relation to the income of a consumer.

Income
(Sh.)
15,000
29,000

Demand
(Units)
16
7

Required:
The income elasticity of demand of the commodity. Interpret your result.

6a

Economic growth, economic development and economic planning

Argue the case for and against regional economic integration by developing countries.

6b

Demand, supply and determination of equilibrium

A firm operating under perfect competition has the following demand and total cost functions:

P-25-50Q
TC = 100-150-600

Where:

P is the price in shillings.
Q is the quantity in units,
TC is the total cost.

Required:
(i) The level of output that would maximise profit.
(ii) The level of output that would minimise costs

7a

Economic growth, economic development and economic planning

Describe five causes of balance of payment deficits in developing countries

7b

Introduction to economics

Outline six limitations of the theory of comparative advantage

7c

Inflation and unemployment

Summarise nine reasons why unemployment is a major policy issue in developing countries

May 2017

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