KIKAAYA COLLEGE SCHOOL
END OF TERM 1 EXAMS 2008
PAPER ONE S.6
TIME: 3 HOURS
Answer four questions in all
Section A is compulsory: answers to this section should be concise and
Answer three questions from section B
SECTION A (40 marks)
1. (a) (i) What is meant by opportunity cost.
(ii) Outline any three merits of opportunity cost concept to
(b) (i) Distinguish between market price and equilibrium price. (2mks)
(ii) Give any two uses of price in an economy. (2mks)
(c) (i) Distinguish between composite demand and derived demand. (2mks)
(ii) Mention any two commodities with composite demand.
(d) (i) Distinguish between labour demand and labour efficiency. (2mks)
(ii) Mention any two limitations of labour efficiency in an economy.(2mks)
(e) (i) Distinguish between vertical merging and horizontal merging
(ii) Outline any two limitations of firm merging in an economy. (2mrks)
(f) (i) Distinguish between explicit costs and implicit costs.
(g) Study the table below and answer the questions that follow.
Quantity demanded of
Calculate income elasticity of demand for commodity x. (2mks)
What type of commodity is x and why? (2mks)
(h)(i) What is meant by investment multiplier? (1mk)