QUESTIONONE

(a) Two competing TV stations in Kenya, KTN News and Citizen, each held 40% and 60%
of the market last week. A study has been done to see the switching patterns of viewers
from week to week and the following transition matrix has been obtained.
TO

FROM:

If the Markov assumptions hold, determine the market shares for the two stations:
(3 mks)
(i) This week
(ii) The next week

(b) A certain NGO carried out a survey in a certain community in order to establish the average
at which the girls are married. The results of the survey indicated that the marriage age for
the girls is 19 years. In order to establish the validity of the mean marital age, a sample of
50 women was interviewed and the average age indicated that they got married at the age
of 16 years. However, the different ages at which they were married differed with the
standard deviation of 2.1years. The sample data indicates that the marital age is less 19
years. Is this conclusion true or not?
Required
Conduct a statistical test to either support the above conclusion drawn from the sample
statistics i.e. the marriage age is less than 19 use a level of significance of 5%. (4 mks)
(c) Differentiate the function: (3 mks)
Y= X2Y + 3X2 + 50

QUESTION TWO
Tropical Ltd comprises a chemical, Industrial and Pharmaceutical laboratories with products
categorized as prescription, animal health, car products, OTC products, bulk drugs and technology
services. Over the years tropical Ltd sales have grown such that it now exports to countries in
Europe, Australia, Asia among others in 2017, it took over Ranbanx and Glaxosmithkline to

Page 1 of 3
become the largest the largest pharmaceutical company in the domestic market. The sales turnover
of Tropical Ltd from 1999-2016 being given below: Calculate:
(a) The Mean sales of Tropical Ltd (4 mks)
(b) The Modal sales for the company (2 mks)
(c) The median sales for the company (2 mks)
(d) Using your understanding of statistics, is the data balanced? Explain. (2 mks)
QUESTION THREE
(a) A firm has the following marginal cost function
MC = a - bq – cq2
Find its total cost function. (2 mks)
(b) Your company manufacturers large scale units. It has been shown that the marginal (or
variable) cost, which is the gradient of the total cost curve, is (92 – 2x) Shs. thousands,
where x is the number of units of output per annum. The fixed costs are Shs. 800,000 per
annum. It has also been shown that the marginal revenue which is the gradient of the total
revenue is (112 – 2x) Shs. thousands.
Required
(i) Establish by integration the equation of the total cost curve (2 mks)
(ii) Establish by integration the equation of the total revenue curve (2 mks)
(iii) Establish the break even situation for your company (2 mks)
(iv) Determine the number of units of output that would (2 mks)
a. Maximize the total revenue and
b. Maximize the total costs, together with the maximum total revenue and total
costs

QUESTION FOUR

Page 2 of 3
The tabulation above is the input-output from the government of Kenya featuring some
ministries sectors of Agriculture, Manufacturing and Services.
Suppose the levels of final demand change to the following:

Agriculture: Ksh. 120

Manufacturing: Ksh. 70
Services Sector: Ksh. 100

Determine the following:

(a) Level of output required for each sector so that both intermediate and final demand are
satisfied. (3 mks)
(b) Intermediate demand for each sector for output levels in (a) above. (3 mks)
(c) How will the output of the services sector be utilized? (2 mks)
(d) Detail the sources and amounts of manufacturing sector input. (2 mks)

Page 3 of 3