ECONOMICS
July 2019
THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN SECRETARIAL STUDIES
DIPLOMA IN SALES AND MARKETING
DIPLOMA IN SUPPLY CHAIN MANAGEMENT
DIPLOMA IN BUSINESS MANAGEMENT
DIPLOMA IN ROAD TRANSPORT MANAGEMENT
DIPLOMA IN CO-OPERATIVE MANAGEMENT
DIPLOMA IN INVESTMENT
DIPLOMA IN HUMAN RESOURCE MANAGEMENT
MODULE I
ECONOMICS
1. (a) Outline five ways in which the concept of scarcity of resources is of significance to a country. (10 marks)
(b) Describe five different types of price elasticity of demand. (10 marks)
2. (a) Agricultural products normally have a low elasticity of supply. Outline five reasons that may account for this situation. (10 marks)
(b) The price for imported cars in country Y has recently gone up. Explain five factors that may account for the increase in price. (10 marks)
3. (a) Specialization of labour as a factor of production has certain limitations. Highlight five of these limitations. (10 marks)
(b) Describe five forms of internal economies of scale in a firm. (10 marks)
4. (a) ‘Explain five limitations of monopoly as a form of market structure. (10 marks)
(b) There are certain problems that may be associated with the income approach of measuring national income. Highlight five such problems. (10 marks)
5. (a) Explain five limitations of barter trade as a form of exchange- (10 marks)
(b) There are certain principles that govern a good taxation system. Outline five such principles. (10 marks)
6. (a) Country X has in the recent past been experiencing demand pull inflation. Explain five causes of such inflation. (10 marks)
(b) Many developing countries experience persistent balance of payments deficits. Explain five measures that could be taken to reduce such deficits. (10 marks)
7. (a) Country Y has lately been experiencing a high rate of increase in its population growth.
Explain five factors that could contribute to such a high increase. (10 marks)
b) Explain five measures that a country could adopt to influence investment decisions in an effort to spur economic growth. (10 marks)