UNIVERSITY EXAMINATION 2017/2018

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

BEC/BECF/BECS/BSFS/BBM/BCOM
SCHOOL BASED/DIBL

UNIT CODE: BED1101 UNIT TITLE: INTRODUCTION TO MICRO

ECONOMICS

DATE: AUGUST 2018 SPECIAL/SUPPLEMENTARY TIME:2 HOURS

INSTRUCTIONS: ANSWER QUESTION ONE AND ANY OTHER TWO QUESTIONS

1. a) Distinguish the following;

i) Isoquant and isocost
ii) Cardinal approach and ordinal approach to measurement of utility.
iii) Fixed costs and variable costs
iv) Monopoly and oligopoly (8 Marks)

b) Explain the factors influencing supply of goods and services (8 Marks)

c) Identify the characteristics of a perfect competition market. (8 Marks)

d) Explain price elasticity of supply and its importance. (6 Marks)

2. a) Explain the various forms of specialization (10 Marks)

b) Highlight the benefits and limitations of specialization. (10 Marks)

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 3. a) Discuss the factors of elasticity of supply. How is elasticity of supply
measured? (10 Marks)

b) Explain the individual mobility of factors of production. (10 Marks)

4. a) Discuss the various types of elasticity of demand. (10 Marks)

b) Discuss the factors that affect price elasticity of supply. (10 Marks)

5. a) Differentiate income elasticity of demand and cross elasticity of demand

stating their importance. (6 Marks)

b) Discuss the approaches/schools of thought under which incremental

satisfaction that is brought about by consuming an extra unit of a commodity has
been divided. (8 Marks)

c) Identify the features of a free market economy. (6 Marks)

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