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CPA Economics – November 2016 Past Paper & Answers

Unit: Economics

20 Questions

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Questions

Download CPA Economics November 2016 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.

Other Economics Past Papers

1a
Demand, supply and determination of equilibrium
​​  (i) Explain the term "price control" as used in economics.
(ii) Highlight eight reasons for price controls in an economy.
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1b
Economic growth, economic development and economic planning
Outline six advantages of a controlled market system.
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1c
Demand, supply and determination of equilibrium
With the aid of a diagram, explain the concept of consumer surplus.
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2a
Demand, supply and determination of equilibrium
Enumerate six factors that could lead to a rightward shift of the supply curve.
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2b
National income
State six assumptions of the marginal productivity theory of wage determination.
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2c
Demand, supply and determination of equilibrium
Summarise eight factors that could affect own price elasticity of demand of a commodity
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3a
Demand, supply and determination of equilibrium
With the aid of well labelled diagrams, discuss the short run and long run equilibrium positions of a firm operating under monopolistic competition.
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3b
Demand, supply and determination of equilibrium
​ ​​ A monopolist sells his product in two distinct markets, A and B. The cost function of the monopolist is given as;
C = 100Q
Where: C is the total cost function
Q is the total production in units
The demand functions of the two distinct markets are given as:
QA = 50 - 0.2PA
QB = 100 - 0.5PB
Where,
QA is the demand of the product in market A.
QB is the demand of the product in market B.
PA the price of the product in market A.
PB is the price of the product in market B
Required:
(i) The equilibrium level of price and quantity of the product in market A
(ii) The equilibrium level of price and quantity of the product in market B
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4a
Economic growth, economic development and economic planning
 Highlight five strategies that could be implemented by governments in developing countries to spur growth in the industrial sector.
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4b
Demand, supply and determination of equilibrium
Using an appropriate diagram, describe the expansion curve of a firm as applied in the theory of production.
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4c
National income
Discuss ten limitations of using national income statistics to compare the standards of living between different countries.
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5a
Economic growth, economic development and economic planning
The United Kingdom (UK) recently withdrew its membership from the European Union (EU), a process that was referred to as "Brexit". Analyse the likely economic effect of "Brexit" on the United Kingdom's:
(i) Exchange rates.
(ii) Interest rates.
(iii) Inflation rate.
(iv) Securities exchange market
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5b
Demand, supply and determination of equilibrium
The table below shows the total variable costs of Ujuzi Limited at different levels of output.

Level of output(units)Total variable cost(Sh)
0
1
2
3
4
5
6
7
8		0
80,000
130,000
200,000
270,000
310,000
510,000
530,000
580,000

The total fixed cost of the company is Sh. 150,000.
Required:
(i) The average cost of producing each level of output.
(ii) The marginal cost of producing each level of output.
(iii) The maximum attainable profit.
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6a
Money and banking
Outline five factors that determine the rate of exchange of a country's currency.
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6b
Money and banking
Enumerate five roles of the central bank in an economy
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6c
Inflation and unemployment
Suggest five policy measures that could be adopted to reduce the level of unemployment in a developing country
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7a
Money and banking
Explain the relationship between money supply and the level of inflation in an economy
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7b
Money and banking
State six advantages of a floating exchange rate system in an economy.
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7c
Economic growth, economic development and economic planning
Summarise eight challenges that hinder successful achievement of national development targets set by developing countries
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7d
Economic growth, economic development and economic planning
The economic transactions for a hypothetical economy in thousands of shillings are given as follows:

Sector

Total output
Sh."000"		Intermediate purchaser
Sh."000"
Service
Agricultural
Manufacturing		76,000
55,000
110,000		37,000
23,000
69,000


Indirect taxes and fixed assets depreciation amount to Sh.21,000,000 and Sh.22.000.000 respectively.

Required:
(i) Gross national product using the value added approach.

(ii) Net domestic product at market price

(iii) Net domestic product at factor cost.
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