KASNEB Economics - Question 1b

Discuss the four main goals of macroeconomic policy in developing countries. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 2a

Highlight the characteristics of public goods. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3a

Explain the term ‘Price control’. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4a

Explain the importance of elasticity of supply in decision making. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6a

Explain the term ‘Oligopoly’? ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6b

Analyse the challenges facing the formation of “cartels” in the oligopoly market structure. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6c

Citing reasons, suggest why rising inflation is a major cause of concern in developing countries. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7a

Outline the main causes for the rise in the unemployment levels in developing countries. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7b

Suggest the possible remedy measures to contain unemployment crisis in developing countries. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7c

Explain the likely challenges facing currency demonetization in your country. ... [Click to view full question and step-by-step solution]

Pilot December 2021

1a

Demand, supply and determination of equilibrium

(i) Explain the concept of “consumer sovereignty” as applied in economic analysis.

(ii) Highlight five factors that limit consumer sovereignty.

(iii) ABC limited has been incurring losses over the last few years despite its monopolparastatal status.

Using a well-illustrated diagram, demonstrate how a monopolist can make losses in the short-run.

1b

Economic growth, economic development and economic planning

Discuss the four main goals of macroeconomic policy in developing countries.

2a

Demand, supply and determination of equilibrium

Highlight the characteristics of public goods.

2b

Demand, supply and determination of equilibrium

The following economic functions have been derived from the Kenya Coffee Millers Limited:

$Q_{a} = 3 p^{2} - 4 p$

and

Qb=24−p2

where p represents price and Q is quantity

Required:

(i) Which of the two functions represents a demand curve and supply curve. Cite relevant economic reasons.

(ii) Determine the equilibrium price and quantity in the market

(iii) Explain, with the aid of a diagram, the effect on the demand and supply functions indicated in (a) above of

a simultaneous decrease in cost of inputs and a decrease in the price of a substitute good.

3a

Demand, supply and determination of equilibrium

Explain the term ‘Price control’.

3b

Demand, supply and determination of equilibrium

Explain the circumstances under which price control is considered necessary.

The utility total function and other relevant variables related to a consumer are given as follows:

U=20X−4Z2+40Z−X2

Income Y = Kshs. 48

Price of X (Px) = Kshs.2

Price of Z(Pz) = Kshs.4

Required:

(i) Determine the equilibrium quantities of commodities x and z using the cardinalist approach to consumer

behavior.

(ii) Outline the axioms of the cadinalist approach to consumer behavior.

4a

Demand, supply and determination of equilibrium

Explain the importance of elasticity of supply in decision making.

4b

Money and banking

Examine five factors that limit the effectiveness of the monetary policies in developing countries.

4c

National income

You are given the following information about the commodity and Money markets of a closed economy without

government intervention:

The commodity market Consumption function:

C = 50 + 2/5Y

Investment function:

I = 790 – 21r

The Money Market:

Precautionary and Transactions demand for money MDT = 1/6 Y

Speculative demand for money MDS = 1200 -18r

Money supply MS = 1250

Required:

(i) Determine the equilibrium levels of income and interest rate for this economy.

(ii) Using a well labeled diagram, illustrate the equilibrium condition in part (i) above.

5a

Demand, supply and determination of equilibrium

Explain the meaning of mobility of factors of production and highlight the significance of factor mobility.

5b

National income

Outline the economic policy recommendations that would reduce regional development imbalances developing countries.

The table below represents economic transactions for country XYZ in billions of shillings:

	Total output	Intermediate purchases
Agriculture	130	110
Manufacturing	170	145
Services	150	125

Required:

(i) Calculate the Gross National Product of this economy using the value added approach.

(ii) If depreciation and indirect taxes equal 8 billion and 7 billion shillings respectively, find the Net Domestic Product both at Market prices and at factor cost.

6a

Demand, supply and determination of equilibrium

Explain the term ‘Oligopoly’?

6b

Demand, supply and determination of equilibrium

Analyse the challenges facing the formation of “cartels” in the oligopoly market structure.

6c

Inflation and unemployment

Citing reasons, suggest why rising inflation is a major cause of concern in developing countries.

7a

Inflation and unemployment

Outline the main causes for the rise in the unemployment levels in developing countries.

7b

Inflation and unemployment

Suggest the possible remedy measures to contain unemployment crisis in developing countries.

7c

Money and banking

Explain the likely challenges facing currency demonetization in your country.

Pilot December 2021

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$Q_{a} = 3 p^{2} - 4 p$

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Pilot December 2021

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Qa​=3p2−4p

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$Q_{a} = 3 p^{2} - 4 p$