BUSS 101 – INTRODUCTION TO MICRO- ECONOMICS.

UNIVERSITY EXAMINATIONS: 2021/2022
EXAMINATION FOR DEGREE OF BACHELOR OF BUSINESS AND
INFROMATION TECHNOLOGY (TOWN CAMPUS)
BUSS 104: INTRODUCTION TO MICRO ECONOMICS
DATE: DECEMBER, 2021 TIME: 2 HOURS
INSTRUCTIONS: Answer Question One and Any Other Two Questions

QUESTION ONE (20 Marks)
a) Discuss the key advantages of a command/centrally planned economy. (5 Marks)
b) Explain the factors that limit consumer sovereignty in Kenya. (5 Marks)
c) Discuss the key determinants of demand in Kenya. (5 Marks)
d) Using a suitable diagram, discuss the concept of stable equilibrium. (5 Marks)
QUESTION TWO (15 Marks)
a) Explain the factors that influence the price elasticity of demand in practice. (7 Marks)
b) By using suitable diagrams discuss the concept of price controls. (8 Marks)
QUESTION THREE (15 Marks)
a) Considering the Cardinalist’s approach to utility measurement and using a suitable
diagram explain how a demand curve is derived. (7 Marks)
b) Consumers are assumed to be rational so as to maximize utility. Discuss the assumptions
of a rational consumer. (8 Marks)
QUESTION FOUR (15 Marks)
Write short explanatory note son the following topics
a) Perfect competitors and monopoly. (3 Marks)
b) Devaluation and depreciation of currency. (3 Marks)
c) Marginal utility and marginal cost. (3 Marks)
d) Price consumption curve and income consumption curve. (3 Marks)
e) Engel curve and price decontrol. (3 Marks)

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