BIT 1308  GENERAL ECONOMICS KCA Past Paper

UNIVERSITY EXAMINATIONS: 2010/2011
FIRST YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
SCIENCE IN INFORMATION TECHNOLOGY
BIT 1308: GENERAL ECONOMICS
DATE: AUGUST 2011 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions

Question One
(a)Given the table below, compute:
The Total revenue, Average Revenue and Marginal Revenue at all levels of output and plot the
resultant schedule:

(10 Marks)
(b)Explain using diagrams the concept of contractions and extensions in the demand curve. (6 Marks)
(c)Explain the factors influencing supply of money in the economy. (6 Marks)
(d)Write brief notes on:
(i) Opportunity cost
(ii) Derived demand
(iii)Production Possibility Curve
(iv)Economic Growth and Economic Development (8 Marks)
Question Two
(a)Differentiate between tariffs and non tariff barriers as forms of protection in international trade.
(4 Marks)
(b)Argue the case for and against international trade restrictions among countries. (10 Marks)
(c)Explain three factors that contribute to wage differentials between different occupations in a
country. (6 Marks)
Question Three
(a)With reference to Keynes liquidity preference theory, distinguish between “speculative motive” and
“precautionary motive” of holding wealth as money. (6 Marks)
(b)Outline four factors that limit the effective implementation of monetary policy in developing
countries. (4 Marks)
(c)Explain four ways in which contractionary monetary policy could be used to combat inflation in a
country. (10 Marks)
Question Four
(a) Elaborate the key goals of economic development. (10 Marks)
(b) Explain the causes of unemployment in developing countries and suggest measures to alleviate the
problem. (10 Marks)
Question Five
(a) Define the term Economic Integration and clearly explain the main forms of Economic
Integration. (10 Marks)
(b) Distinguish between economies and diseconomies of scale using a diagram. (6 Marks)
(c) Explain four conditions that should be fulfilled for price discrimination to be effective (4 Marks)

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