MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS 2013/2014 ACADEMIC YEAR
FIRST YEAR FIRST SEMESTER
SCHOOL OF BUSINESS AND ECONOMICS
CERTIFICATE IN BUSINESS MANAGEMENT
COURSE CODE: CHR 110
COURSE TITLE: INTRODUCTION TO ECONOMICS
DATE:25TH APRIL 2014 TIME: 9.00AM – 11.30AM
INSTRUCTIONS TO CANDIDATES
Question ONE is compulsory
Answer any other THREE questions
This paper consists of 2 printed pages. Please turn over.
QUESTION ONE ( 25 marks)
a) Define the term economics. ( 4 marks)
b) State and explain three theories of economics (9 marks)
c) Define the term national productivity. (4 marks)
d) At a firm level, the benefits of productivity growth can be distributed in a number of different ways: state and explain four ways. (8marks)
QUESTION TWO ( 15 marks)
a) With an aid of a diagram illustration explain the pareto economic efficiency in allocation of scarce resources. (10 marks)
b) If there are only five people in a certain economy, and their weekly paychecks are sh100, sh300, sh600, sh1000, and sh1600, what is the cumulative percentage of income generated by the bottom 60% of wage earners? (5 marks)
QUESTION THREE ( 15 marks)
a) Using a mathematical illustration to explain price elasticity of demand. (7 marks)
b) State four applications of the concept of elasticity in economics.
(8 marks)
QUESTION FOUR ( 15 marks)
a) Explain the inequality in the distribution of income using the illustration of a Lorenz curve. (9 marks)
b) Explain three sources of a monopoly powers. (6 marks)
QUESTIONS FIVE( 15 marks)
a) With an aid of a Philip curve explain the relationship between inflation and unemployment in the changes of aggregate demand in the short-run . (9 marks)
b) Explain the major measures of National income in an economy. (6 marks)
