0% found this document useful (0 votes)
8 viewsMicro -Ecn Exam Papers
The document outlines various examination questions from the University of Zambia's School of Humanities and Social Sciences, focusing on microeconomics. It covers topics such as the distinction between micro and macroeconomics, demand curves, perfectly competitive firms, efficiency, indifference curves, and market structures. The questions require students to demonstrate their understanding of economic concepts through explanations, diagrams, and calculations.
Uploaded by
malikomalambo1Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
0% found this document useful (0 votes)
8 viewsMicro -Ecn Exam Papers
The document outlines various examination questions from the University of Zambia's School of Humanities and Social Sciences, focusing on microeconomics. It covers topics such as the distinction between micro and macroeconomics, demand curves, perfectly competitive firms, efficiency, indifference curves, and market structures. The questions require students to demonstrate their understanding of economic concepts through explanations, diagrams, and calculations.
Uploaded by
malikomalambo1Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
/ 22
UNIVERSITY OF ZAMBIA
SCHOOL OF HUMANITIES AND SOCIAL SCIENCES
1998/99 ACADEMIC YEAR FIRST SEMESTER
‘DEFFERED / SUPPLEMENTARY EXAMINATIONS,
BC 115 - INTRODUCTION TO MICROECONOMICS
‘TIME: THREE HOURS
INSTRUCTIONS: ANSWER ALL QUESTIONS
1. Distinguish between micro and macroeconomics
2, Give three clear explanations as to why the demand curve generally slopes ftom the left:
the right.
3. Using diagrams show the short run situation of a perfectly competitive firm making
supernormal profits. Assuming tat the firm is making losses what advice would you give
the management ?
4. Distinguish between technical and economic efficiency
5. Clearly explain what indifference curves are
6A perfectly competitive firm is faced with the following total cost schedule
CC
ree. pe [Sm fer [8
2) the market price is 13 Kwacha, what output would the firm choose to produce to
maximize profits
'b), What is the maximum profit?
6). If the price fell to 6 Kwacha, how much would the firm choose to produce
4). Explain your answer in (6) above‘THE UNIVERSITY OF ZAMBIA
DIRECTORATE OF DISTANCE EDUCATION
2008/2009 ACADEMIC YEAR SECOND SEMESTER FINAL EXAMINATIONS
EC 11S INTRODUCTIONS TO MICROECONOMIC THEORY
TIME TWO HOURS
INSTRUCTIONS; ANSWER ALL (3) QUESTIONS
Question 1
Briefly explain the following terms:
(2) Natural Monopoly
(b) Price Discrimination
(©) Utility Maximization
(d) Diminishing Marginal Product
(e) Opportunity cost
(f) Market Power
(g) Law of Demand
(h) Willingness to Pay
(i) Producer Surplus
() Perfect compliments
Question 2
) Explain the relationship between marginal cost (MC) and the supply curve of the firm under
perfect competition and monopoly.
b) Consider a competitive market for which the quantities demanded and supplied per year at
various prices are given as follows:
Pisce ia ZK Demand
30 20 .
30 is
70, 16
0 ia
110) 12
10) 10
i, From the above table, what is the equilibrium price and quantity?
fi, Suppose government sets a price ceiling of ZK80, what will be the effect?
iii, Caloulate the price elasticity of demand when the price is ZK80 and when price is ZK100
and state whether demand is elastic or inelasticQuestion 3 .
8) Suppose you have the following table summarizing output, price and total cost (TC) data
facing a firm, answer the questions that follow:
‘Guipat [Toil [Pace [ Fined] Varble | Marginal | Avene | Average | Margral ; foul [Toa
costs | (ZK) | Coxts | Costs’ | Cost | Fixed | variable | Revemie | revenue | economic
@k) ve }Me | cost) costs FMR | (TR) | Profits
(AFC) _| AVC)
3 ia
1 132
z 730
3 ie
a i268
3 fiw f3e
6 [200 fz
7 [295 [ 20
ease [ie {
3 [a0 1
10350 [ie i
Tes
i, Complete the above table by calculating the VC, AVC, AFC, VC and MR, ATC and
economic profits.
fi, Assuming that the above firm is in a perfectly competitive market structure, is it operating in
the short run or tong run?
i. Graph the AFC, MC, MR, AVC, and TVC on the same diagram and briefly comment on the
form of the curves.
b) Compare and contrast price determination under perfect competition and monopoly. What
factors influence monopoly pricing decisions?
END OF FINAL EXAMINATION‘THE UNIVERSITY OF ZAMBIA,
‘SCHOOL OF HUMANITIES AND SOCIAL SCIENCES
2012 ACADEMIC YEARS FIRST SEMESTER
FINAL EXAMINATION
EC us Introduction to Microeconomic Theory
TIME, ‘Two @) Hours
INSTRUCTIONS: Answer ALL Questions
“All diagrams must be clealy and comprehensively labeled
QUESTION ONE,
‘A. A firm in a perfectly competitive market, in the short run, faces a price of $20 per unit of
its output. It is producing 200 units per week and employing 40 workers, The last unit of
‘output takes 32 percent of one worker's week to produce. The wage rate is $50 per week
‘and fixed costs (per week) are $1,000.
i. Caloulate MC, AC, and profit atthe present level of output,
fi, Isthe firm maximizing its profit?
‘Suppose thatthe price falls to $16 and fixed costs rise to $1,500. Should the firm
close down?
BB Illustrate why in equilibrium, a consumer will choose a basket of goods at which the
‘marginal rate of substitution (MRS) equals the price ratio of the goods in question,
QUESTION TWO
‘A, Suppose that the price elasticity of demand for snow shovels is 1.2. What would have to
happen to the price of a snow shovel for the quantity demanded to fall from 2,000 to
1,800? Use the midpoint formule in your calculations.
'B. The demand for tobacco is price inelastic. Suppose there is a drought that destroys & large
portion ofthe tobacco crop.
i. What will happen inthe market for tobacco?
ii, Will the equilibrium price and quantity change? Ifso, how?
iii. What will happen to the total revenue earned by tobacco farmers?
(QUESTION THREE
Write briefly notes on each ofthe following concepts:
i, Thelaw of Equi-marginal Utility
fi, Fallacy of composition
iii, Positive economics
iv. Economies of scale
v, Dead-weight loss
END OF FINAL EXAMINATION‘THE UNIVERSITY OF ZAMBIA
UNIVERSITY SECOND SEMESTER KKAMINATION NOV/DEC 1996
Ee 110
DerRopuCTORY_KCaROMICS
(DISTANCE EDUCATION)
am: 3 BOURS
INSTRUCTIONS: ANSWER SECTIONS ONE AND TWO IN SEPERATE BOOKLETS.
SECTION ONE ~ MICRORCONOMICS,
‘ANSWER QUESTION ONE AND THREE OTHER QUESTIONS
LL
3.
Ae
Se
Using the marginal utility theory explain why the demand curee generally
falls from left to right, 1.e. why consumers tend to buy a lover number
of units at higher prices and higher nusber at lower prices.
Write short notes on the following:
(@) Microeconomted
() Normative economicn:
{c) Opportunity cast
(@) Ceteris Partbus
(0) Market equiribriun \
Using diagrams show the conditions that must be satisfied for a fire
under perfect competition to maximise profits.
‘Suppose you spend all your monthly income on two goods, X and ¥. Draw
your bedgat line 4£ your income 1s K150 and X and Y cost E10 and KIS por
unit respectively. Draw the new budget lines 1f
(a) the price of X doubles
(b) the price of ¥ halves
(©) your income rises to K250
‘The model of perfect competition is based on such unreal asmumptions that
it has Little relevance to modera markot structures."
R
Discuss.
3
se.
4%
3
a ah
“2
Ln
3S
3 sad
eeg
THE UNIVERSITY OF ZAMBIA
SCHOOL OF HUMANITIES AND SOCIAL SCIENCES
2005 ACADEMIC YEAR FIRST SEMESTER
DISTANCE EDUCATION FINAL EXAMINATIONS,
EC 11S; INTRODUCTION TO MICROECONOMICS.
TIME: THREE HOURS
INSTRUCTIONS: Answer ALL questions in section A and ANY TWO in section B
1. An economy is usually faced, among other things, with three important problems of
“what to produce”, “how to produce.” and “for whom to produce.” Briefly explain
the significance of these problems to scarcity.
2. Mention at least two differences between normative and positive economics.
3. (a) What are some of the similarities between microeconomics and macroeconomics.
(b) What does the term “ceteris paribus” mean? How does it relate to the distinction
between a change in the quantity demanded and a change in demand?
4. Given the following production function
Q=KL)
Where Q= Output
(a) Define production isoquant
(b) What is the relatiorship between’the inputs, as you move along the isoquant
from right to left?
5. Briefly explain the folbwing terms:
(a) Increasing returnsto scale
(b) The law of diminshing marginal product
6. Briefly explain the folowing terms
(a) Economic rent
(b) Cross elasticityof demand7, Wage change just like price change, has two distinct effects on quantity of labour
supplied. State the two effects.
8, (a) Given the following hypothetical production function:
Q=K+L
Where Q= Output
K = 10 acres of land
L = Labour
Which one of the two inputs is a variable input? Explain
(©) Briefly explain the following terms ‘Accounting costs’ and “Economic costs’
9. Consider the following diagram that shows the demand curve for a product.
Price (P)
(Kwacha)
20)
0
D
0 38 40 ‘Quantity (Q)
‘Assume a price decrease and illustrate mathematically whether demand for this product is
price elastic or not
SECTION B:
1. (i) Define the terms “Total productivity”, “Average productivity”, "Marginal
productivity” and explain the relationship between these concepts using an
appropriate diagram.
(iii) Define the theory of marginal productivity
(ii) Based on the behaviour of Marginal product (MP) and Average product (AP),
economists have classified production into three stages, and further assert that
nom-profit maximizing producer would produce in stages I or II]. Explain and
illustrate this assertion.2. The table below is a demand and supply schedule for oranges. The quantity is
measured in boxes of 48 oranges each.
Price per box Quantity demanded Quantity supplied
(48 per box) (million of boxes (million of boxes
per year per year
K6 5 125
5 50 100
4 5 5
3 100 50
| 125 25
1 150 0
(a) What are the equilibrium price and quantity in the orange market?
(b) At aprice of K6 per box, does a surplus or shortage exist in the market? What is
the magnitude of this equilibrium condition?
(©) Explain what would happen if the pice that the consumer is willing to buying a
good is lower than the price at which the Supplier is ready to sell the good.
3. (a) Under what conditions might perfect competition exist?
(b) What are the conditions necessary for a firm to maximize its profits?
(©) Complete the following table and determine the equilibrium output
Output Price ‘Total Average Marginal Average Total Profit
Revenue Revenue Cost Cost Cost Cast
(8) (s) (8) (s) ) @) ®
1 30 7
2 29 19
3 28 21
4 27 24
5 26 2B
6 28 33
7 24 39
8 23 46
9 2 34
10 21 63
ul 20 B
12 19 84
0" END OF THE EXAMINATION *****‘THE UNIVERSITY OF ZAMBIA
DIRECTORATE OF DISTANCE EDUCATION
2006 ACADEMIC YEAR FINAL EXAMINATION
EC115: INTRODUCTION TO MICROECONOMICS:
TIME ALLOWED: THREE HOURS
INSTRUCTIONS: THIS PAPER COMPRISES THREE SECTIONS, SECTION A,
SECTION B AND SECTION C, ANSWER ALL QUESTIONS IN SECTIONS A AND
SECTION B AND CHOOSE ANY TWO FROM SECTION C.
SECTION A: Multiple Choice Questions: Attempt all questions
1. All the following characterizes a monopolist apart from
Monopoly has no close substitutes ¢
‘Monopoly will never have deadweight losses
Location may restrict a monopoly's power
‘Monopoly isthe sole supplier of the good,
po pege
‘An increase in the price of normal good will result in
‘An increase in the quantity of the good
‘Amovement along the demand curve of the good
cc. Arightward shift in deiand curve
4. All the above
‘The production-possibilites frontier shows that
‘At any point in time the production possibilities for an economy are limited.
‘The production of all goods involves opportunity costs.
Producing more of one good means producing less of another good.
All of the above
‘A market in witich land, labor, capital, and/or entrepreneurship are exchanged is a
Product market
Securities market.
Factor market
Bond market5. Which of the following events would cause @ rightward shift in the market-supply
ceurve for large automobiles:
‘a. A technological improvement that reduces the cost of production for large
automobiles.
'b. An increase in the wages of all autoworkers.
‘An excise tax on large automobiles.
|A decrease in the number of sellers of automobiles
6. Assume pens and pencils ate substitutes. If the price of pencils decreases, ceteris
paribus, then the equilibrium quantity of pens will:
Decrease.
Increase.
Remain unchanged.
Bither increase or decrease
pege
Maximum total uty is achieved where:
Total reyenue is zer0
“The price elasticity of demand is 1.0
Marginal utility is zero.
All of the above.
8. Price clasticity of demand shows how:
a, To compute the slope of the demand curve.
1b. Quantity demanded responds to price changes.
© Quantity demanded responds to changes in the price of other goods,
Price responds to demand changes
9. A price eut will increase the total revenue a firm receives, cetetis paribus, only ifthe
‘demand for its product is
Blastic.
Inelastic.
Unitary elastic.
Perfectly inelastic
eoee10. Consider the figure below. Holding income constant, what change must have
occurred to rotate the budget line from 1 10 2?
‘The price of what fell
‘The price of cloth increased
‘The price of cloth fell
‘The price of wheat increased
epee
SECTION B: Give brief explanations and diagrams where necessary to your answers to
the following questions
1L._ Indifference curves always slope downwards to the right and are convex to the origin.
‘True or false, explain.
2. A monopolist will always make a profit because they can charge any price they want.
‘True or false, explain.
3, Ifa finn is making zero profits, it will go out of business and pursue other economic
‘opportunities. True/False, explain.
4. You are given the total demand and supply for onions per week as depicted in the
diagram below
‘Quay CU] PEE Genny (ony | Sepls (9 ortoraae()
Demnandet Perum Spricd
= sa 7
wr ae a
7 a0
7 a 7
@ Ta
@ oy a
1, What will be the market or equilibrium price?b
‘What is the equilibrium quantity?
Fill in the surplus-shortage column and use it to explain why your answers are
correct.
SECTION C: Answer two questions from this section
5.
Answer the following questions:
1. Discuss the concept of Elasticity (meaning, types and interpretations)
Consider the table below and answer the questions that follow
Price per pack | Quantity Toiat ‘own price
(ovacha) (C000) of Pizza | revenue _| elasticity |.
20 10
1.80 20
1:50 30
1:20
090)
0.0.
lalalals
030
ii
6
Calculate the total spending at each price shown
Calculate the own price elasticity of demand for prices between k0.60n and K2.10
[dentify the ranges within which price elasticity of demand is elastic and inelastic.
Based on the elasticities of demand, at what price is revenue at its greatest?
‘Suppose you are the sales manager and have discovered that the cross price
clasticity of Pizza to Cake is positive. What would you do to increase sales of
‘your Pizza?
cc. Identify and discuss the factors that affect the elasticity of supply
‘Compare and contrast the short-run and long-run equilibrium in « pure monopolistic
‘market and perfectly competitive market structures. (Explain using appropriate
diagrams and state the applicable assumptions)
Answer the following questions
8, Given his income Z, Mr. Musale consumes goods X and Y. Explain what would
happen to Mr Musale's budget lines and indifference curves ifthe price of good
X fell (Hint discuss the income and substitution effects)
.P) due to price discrimination,
4) Marginal revenue is less than marginal cost (MR P) due to price discrimination,
4) Marginal revenue is less than marginal cost (MR
