Basic Economic Problems & Mixed Economy Q1

Q.
a) Explain the basic economic problems that every economic system must resolve. (10 marks)

b) Do you agree with the statement that a "mixed economy" is the most suitable form of economic system in a democratic system? Give your opinion. (10 marks)

(20 marks, 2014 Q1)

Price Demand Elasticity Q2

Q.
a) Illustrate how prices are determined by the free forces if demand and supply. (5 marks)

b) Show the different types of elasticity of demand. (5 marks)

c) Necessities tend to be inelastic in demand whereas luxuries tend to be elastic. Explain. (10 marks)

(20 marks, 2014 Q2)

Factors of Production & Law of Diminishing Returns Q3

Q.
a) With the aid of diagram, discuss the relationship between factors of production and the law of diminishing returns. (15 marks)

b) Using appropriate examples, explain the meaning of economics of large scale production. (5 marks)

(20 marks, 2014 Q3)

Market Structure, Perfect Competition and Market Share Q4

Q.
a) Distinguish the following types of market structures.

1. Monopoly (4 marks)
2. Monopolistic competition (4 marks)

b) Show the equilibrium position of a firm and industry under perfect competition in short-run and long-run (12 marks)

(20 marks, 2014 Q4)

Subsidy Q5

Q.
a) Explain the following terms in the context of national economy:-

1. National income
2. Gross National Product
3. Indirect taxes
4. Subsidy

( 3 marks each)

b) Explain any one (1) approach of calculating National Income. (8 marks)

(20 marks, 2014 Q5)

Inflation Winners and Losers Q6

Q.
a) Define inflation and discuss the measures implemented by the government to control inflation. (15 marks)

b) "There are always winners and losers in inflation". Explain. (5 marks)

(20 marks, 2014 Q6)

Money types and functions Q7

Q.
a) Elaborate the different types of money and its functions. (4 marks)

b) Using appropriate examples, differentiate the followings:-

i) Central bank and commercial banks. (8 marks)

ii) Government operating expenditure and government development expenditure. (8 marks)

(20 marks, 2014 Q7)

International Trade Q8

Q.
In the context of international trade, explain the followings:-

a) Tools of protectionism. (10 marks)

b) Balance of payment. (5 marks)

c) Exchange rate. (5 marks)

(20 marks, 2014 Q8)