KASNEB Economics - Question 1b

The following data represents economic transactions of a hypothetical economy: Sh. 'million'General government final expenditure6,750Taxes on expenditure4... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 1c

Briefly explain five functions of money. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 2a

Highlight five features of a firm under perfect competition. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3a

Giving examples, distinguish between 'fixed costs' and 'variable costs'. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 3c

Using an appropriate diagram for each case, explain the three properties of isoquants. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4b

Distinguish between 'economic growth' and 'economic development'. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 4c

Briefly explain the effects ofhigh levels of inflation in an economy. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6b

Explain three types of unemployment. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 6c

Using the Phillips curve, explain the relationship between unemployment and inflation. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7a

Briefly explain five factors that could affect the price elasticity of supply. ... [Click to view full question and step-by-step solution]

KASNEB Economics - Question 7c

Highlight five functions of trade unions. ... [Click to view full question and step-by-step solution]

Pilot September 2015

Q: KASNEB Economics - Question 1a

(i) Distinguish between 'gross domestic product' and 'gross national product'. (ii) Give the reasons for the lower value of the gross national product in the... [Click to view full question and step-by-step solution]

1a

National income

(i) Distinguish between "gross domestic product" and "gross national product".

(ii) Give the reasons for the lower value of the gross national product in the less developing countries.

1b

National income

The following data represents economic transactions of a hypothetical economy:

	Sh. "million"
General government final expenditure	6,750
Taxes on expenditure	4,250
Transfer payments	675
Social security contributions	2,500
Net property income from abroad	250
Consumers expenditure	18,500
Subsidies	750
Gross domestic fixed capital formation	5,750
Corporate income tax	750
Undistributed profits	500
Personal income tax	1,000
Imports of goods and services	9,250
Exports of goods and services	8,750
Depreciation	3,500

Required:

Calculate:

(i) Gross national product.

(ii) Net national product.

(iii) National income.

(iv) Personal income.

(v) Disposable income.

1c

Money and banking

Briefly explain five functions of money.

2a

Demand, supply and determination of equilibrium

Highlight five features of a firm under perfect competition.

2b

Demand, supply and determination of equilibrium

With the aid of a diagram, show that MC=MR is just a necessary but not sufficient condition for profit maximisation.

2c

Demand, supply and determination of equilibrium

In the short-run, a monopolist does not necessarily have to make profits; he can make losses. Whether he makes a profit or a loss depends on the position of the short-run total cost curve (SATC) at the short-run equilibrium.

Using an appropriate diagram, discuss the conditions for the loss minimisation of a monopolist.

2d

Demand, supply and determination of equilibrium

Under monopolistic competitive markets the products are usually differentiated yet they are very close substitutes for

one another.

Explain the main types of product differentiation in monopolistic competitive market.

3a

Demand, supply and determination of equilibrium

Giving examples, distinguish between "fixed costs" and "variable costs".

3b

Demand, supply and determination of equilibrium

A firm operating in the short-run period has a fixed cost of Sh.8,600. The table below shows its total variable cost and the units of output:

Units of output:	0	1	2	3	4	5	6	7	8	9	10
Total variable costs (Sh.):	0	3040	5680	8000	10080	12000	14000	16240	18960	22480	26880

Required:

For each level of output, calculate the firm's total cost, average total cost, average variable cost, average fixed cost and marginal cost giving your solution in columnar form/tabular form.

3c

Demand, supply and determination of equilibrium

Using an appropriate diagram for each case, explain the three properties of isoquants.

4a

Money and banking

One of the main functions of a central bank is the effective implementation of the monetary policies.

Discuss the main instruments of monetary policies.

4b

Economic growth, economic development and economic planning

Distinguish between "economic growth" and "economic development".

4c

Inflation and unemployment

Briefly explain the effects ofhigh levels of inflation in an economy.

5a

Demand, supply and determination of equilibrium

Using the indifference curve margins, discuss how the consumers equilibrium is obtained. Use an appropriate diagram to illustrate your answer.

5b

Demand, supply and determination of equilibrium

With the help of well illustrated diagrams, draw the substitution effect and income effect of:

(i) A normal good.

(ii) An inferior good.

5c

Demand, supply and determination of equilibrium

Briefly explain the concept of elasticity of demand in the economic management policy decision making.

6a

Inflation and unemployment

Most developing countries experience deficits in their balance of payments.

Explain the various methods that could be used by these countries to correct deficits in their balance of payments.

6b

Inflation and unemployment

Explain three types of unemployment.

6c

Inflation and unemployment

Using the Phillips curve, explain the relationship between unemployment and inflation.

7a

Demand, supply and determination of equilibrium

Briefly explain five factors that could affect the price elasticity of supply.

7b

Demand, supply and determination of equilibrium

(i) State the law of diminishing marginal returns.

(ii) With the aid of a diagram, explain the three stages of production according to this law.

7c

Demand, supply and determination of equilibrium

Highlight five functions of trade unions.

Pilot September 2015

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