KASNEB Economics - Question 1a

Explain four methods used by the government to stabilise agricultural prices.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 2b

Citing four examples, explain the significance of mobility of factors of production. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3a

Examine three sources of monopoly power... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4b

Differentiate between 'seasonal unemployment and frictional unemployment.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4c

Explain the term 'economic planning'.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4d

Highlight six characteristics of a good economic plan... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 5a

Enumerate four factors that determine the velocity of money in circulation... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 5c

Summarise four factors that might lead to an inward shift in the optimal point of a firm.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6a

Justify five reasons for differential interest rates in an economy. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6b

With the aid of a diagram, describe the concept of liquidity trap. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6c

Using suitable examples, provide three reasons for interest rate decontrol in an economy.... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6d

Summarise five reasons that make it possible for commercial banks to create credit. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7c

Justify six reasons why external debt problems is a major policy issue in developing countries.... [Click to view full question and step-by-step solution]

November 2020

Q: KASNEB Economics - Question 4a

A small hypothetical economy has the following information:C = b0+b1Y I = I0G = G0T = α0 + α1YWhere: C = Consumers expenditure I = Pivate investment G = ... [Click to view full question and step-by-step solution]

1a

Economic growth, economic development and economic planning

Explain four methods used by the government to stabilise agricultural prices.

1b

Demand, supply and determination of equilibrium

Using sumable examples, differentiate between the following terms as used in economics

(i) "Basic human wants" and "secondary human wants".

(ii) Public good" and "merit good".

(iii) "Stable equilibrium" and unstable equilibrium".

1c

Demand, supply and determination of equilibrium

With the aid of a well labelled diagram, illustrate the effect of a simultaneous increase in the income of the consumer and increase in fuel prices.

2a

Demand, supply and determination of equilibrium

With the help of a diagram, discuss the concept of an individual engel curve as applied in the theory of consumer behaviour

2b

National income

Citing four examples, explain the significance of mobility of factors of production.

2c

A firm uses two factors of production, labour and capital in the long-run. The price per unit of labour is Sh.1,200 while the price per unit of capital is Sh.900. The firm has a budget of Sh.72,000 which it uses entirely on labour and capital to produce an output level of 500,000 tons

Required:
i) With the help of a diagram, derive the optimal point of the firm.
ii) Determine the firm's marginal rate of technical substition (MRTS)

3a

Demand, supply and determination of equilibrium

Examine three sources of monopoly power

3b

Demand, supply and determination of equilibrium

With the aid of a well labelled diagram, explain the equilibrium level of a firm operating under monopolistic market the long run.

3c

Demand, supply and determination of equilibrium

Assume that a producer has the possibility of discriminating between the domestic and foreign markets for a product with the demand fimctions given as follows:

Q1 = 16 - 0.2P1 (Domestic market)

Q2 = 90 - 0.5P2 (Foreign market)

Tetal Cost (TC) of production is given as:

TC = 50 - 20Q

Required:

Determine the level of output and price to be charged for

(i) Domestic market

(ii) Foreign market

4a

Demand, supply and determination of equilibrium

A small hypothetical economy has the following information:

C = b0+b1Y

I = I0

G = G0

T = α0 + α1Y

Where: C = Consumers expenditure

I = Pivate investment

G = Government spending

T = Taxes

Required:

(i) Determine the marginal propensity to save.

(ii) Derive the equilibrium level of income and taxes

4b

Inflation and unemployment

Differentiate between "seasonal unemployment and frictional unemployment.

4c

Economic growth, economic development and economic planning

Explain the term "economic planning".

4d

Economic growth, economic development and economic planning

Highlight six characteristics of a good economic plan

5a

Money and banking

Enumerate four factors that determine the velocity of money in circulation

5b

National income

(i) Explain the relationship between the multiplier and the accelerator.
(ii) Evaluate four benefits that might accrue to an economy as a result of accelerator effect

5c

Demand, supply and determination of equilibrium

Summarise four factors that might lead to an inward shift in the optimal point of a firm.

6a

Money and banking

Justify five reasons for differential interest rates in an economy.

6b

Money and banking

With the aid of a diagram, describe the concept of liquidity trap.

6c

Money and banking

Using suitable examples, provide three reasons for interest rate decontrol in an economy.

6d

Money and banking

Summarise five reasons that make it possible for commercial banks to create credit.

7a

Economic growth, economic development and economic planning

Summarise six corrective measures that developing countries should institute to correct the persistent deficits in their balance of payments position.

7b

Economic growth, economic development and economic planning

Discuss four policy recommendations that developing countries should institute to reduce regional imbalances in their economics.

7c

Economic growth, economic development and economic planning

Justify six reasons why external debt problems is a major policy issue in developing countries.

November 2020

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