ECONOMICS 1 FORM FIVE SERIES 1 JOINT ECONOMICS EXAMINATIONS JANUARY 2020

MINISTRY OF EDUCATION, SCIENCE, TECHNOLOGY AND VOCATIONAL TRAINING

KAHORORO, LILIAN KIBO, MSUFUNI, MASWA GIRLS, PUGU BOYS, IFUNDA GIRLS, SONGEA BOYS, TUKUYU, ARWING, MARIAN GIRLS, TAGAMENDA, SUMVE, BUKONGO, SECONDARY SCHOOLS JOINT ECONOMICS EXAMINATIONS JANUARY 2020

FORM FIVE

SERIES 1

CODE: 151/1            ECONOMICS 1

ECONOMIC THEORY

Time: 3Hours                         21^st JANUARY, 2020

Instructions

1. This paper consists of eight (8) questions sections A, B and C
   

2. Answer a total of six (6) questions choosing at least two (2) questions from each section.
   

3. Credit will be awarded for brief and well-argued answers.
   

1. Cellular phones are not allowed in the examination room.
   

1. Write your Examination number on every page of your answer sheet(s).
   

SECTION A (20 MARKS)

Answer all questions in this section.

1. Give the meaning of the following economics concepts.
   
   1. Normative
      
   2. A transformation curve
      
   3. Specific economic laws
      
   4. Market economy
      
   5. Central economic problem
      
2. Explain why the law of diminishing returns is more applicable in agriculture than to manufacturing industry. Give five (5).
   

   SECTION B (40 MARKS)
   

   Choose any two questions from this section
   

3. (a)BP and GAPCO oil companies limited produce one product whose income elasticity of demand is +2 and whose sales of this year constitute 40,000 units. If consumers` income are expected to decline by 25% next year, calculate next year`s expected levels of sales.
   

   (b) If at price of 5/= per kg, consumer buy 1000kg of commodity per month and when the prices arise to 6/=, the quantity bought falls to 700kg per month.
   

   (i) Calculate the price elasticity in this case.
   

   (ii) Comment on the result.
   

4. (a) Graphically and mathematically show that marginal cost (MC) is a reciprocal of marginal product (MP).
   

   (b) Given the following basket of purchases, calculate Paasche’s price index by use of tabular method and interpreted your result.
   

1. (a) The XYZ Company is a perfect completion firm that can sell its entire output TSH 18 per unit. XYZ Total cost function is
   

   TC=6 +33Q- 9Q² + Q³
   

   
   Where Q represents units of output
   

   1. What is the firm’s total revenue function?
      
   2. What are the marginal revenue, marginal cost and average cost Equations?
      
   3. What is the total profit equation?
      
   4. What is the marginal profit equation?
      
   5. Use optimum techniques to find the profit maximizing output level.
      

   (b)With helps of diagram explain four types of inter related demand.
   

   SECTION C (40 marks)
   

   Answer two questions from this section
   

2. “Perfect market competition market does not exist”. Justify the statement by giving eight (8) points
   
3. Explain four (4) factors for upswing and downswing of the level of economy. And account its policy to control downswing of the economy. (Give four (4) points)
   

1. Elaborate four causes of increase in inflation rate and explain three monetary measures against inflation.