DEPARTMENT OF ECONOMICS
ADVANCED LEVEL
ECONOMICS (735) QUESTION BANK 2000-2019
COMPLIED BY DR NDANG FARINKIA
COMPLIED BY DR NDANG FARINKIA
Time allowed: Three hours
Answer FIVE
questions, choosing TWO each from Sections A and B and ONE from Section C.
All
question carry equal marks
You are reminded of the necessity
for good English and the orderly presentation in your answers
For all the questions proposed an answer plan and place under comment below lets talk about it or send me an email @ ndanggils@gmail.com.
June 2019
Section A
1. a) with the help of diagram, explain
what is meant by the optimum population size of a country. (8mks)
b) what
are the negative consequences of net emigration of people between the ages of
18 and 60 years on an economy? (12mks)
2. a) Why might the prices of cocoa
fluctuate more than the prices of computers?
b) What
factors can lead to an increase in supply of cocoa? (8mks)
3. a) Why are profits maximised at the
output level where MC=MR (12mks)
b) What
other goals can firms seek to achieve apart from profit maximization? (8mks)
4. a) Explain the loanable funds theory
of interest rate determination. (10mks)
b) What
are the factors that might likely cause a rise in interest rates in an economy?
(10mks)
Section B
5. a) How is national income measured
using the income method (8mks)
b)
Advance reasons for the rise in the national income of Cameroon over the years
(12mks)
6. a) What do you understand by: (8mks)
i)
Demand
pull inflation?
ii)
Cost
push inflation?
b) What measures can be taken to
remedy the negative effects of inflation in an economy? (12mks)
7. a) Distinguish between tax incidence
and tax burden. (6mks)
b) Why
are most countries today shifting their tax base away from direct taxes to
indirect taxes? (14mks)
8. a) How is a Customs Union different
From a Free Trade Area? (8mks)
b) What are the likely benefits to
Cameroon of being a member of CEMAC? (12mks)
2018
Section A
1. (a) State the assumptions of the
production possibilities curve (5mks)
b)
Describe the various shapes of the production possibilities curve (15mks)
2. (a) What is meant by price
elasticity of supply? (5mks)
(b) why
is the price elasticity of supply of a good likely to vary over time? (15mks)
3. (a)With the aid of a diagram,
explain the use of marginal cost pricing by a (12mks)
nationalized
industry
(b)
What are the effects of this pricing policy? (8mks)
4. (a) Distinguish between economic rents
and transfer earnings (5mks)
(b)
With the aid of diagrams, explain the determinants of the amount of transfer
earnings for a factor of production. (15mks)
Section B
5. (a) Outline the importance of
national income accounting (8mks)
(b)
When
will and increase in national income NOT lead to an improvement in (12mks)
living
standards?
6. How has money solved the problems of
trade by barter? (20mks)
7. (a) What are the main uses of
government expenditure? (10mks)
(b)
Account for the increasing government expenditure in Cameroon (10mks)
8. (a) With the aid of a diagram,
explain how the government of a country can (10mks)
maintain
the external value of its currency in a fixed exchange rate regime.
(b)
What are the demerits of this exchange rate regime? (10mks)
June 2017
June
2016
June 2015
Section A
1. “Despite the numerous advantages of the market
economic system some countries
still
prefer planned economic system” Discuss. (20mks)
2. (a)Distinguish between a change in
supply and a change in quantity supplied (10mks)
(b)
What factors will lead to an increase in supply? (10mks)
3. Explain: a) The similarities and
(b) The
differences between perfect competition and Monopolistic competition (10+10mks)
4.
(a)What do you
understand by piece rate and time rate as methods of reward for labour (6mks)
(b)What are the advantages and disadvantages of the
piece rate method? (8mks)
5.
Why might an increase in money national income not necessarily
lead to an increase
in the standards of living in a country (20mks)
6.
The FRANC CFA is
money used in Cmaeroon. Why is it considered as good money (20mks)
7.
Explain the principles of taxation and give reasons
for the importance of a tax (10+10mks)
8.
(a)What constitutes the current account of the balance
of payments? (8mks)
(b) How may favourable terms of trade improve upon a
country’s balance
of payments situation? (12mks)
June 2014
Section A
1. Give the main characteristics of
public goods.
Why is it
preferable for the state to provide them rather than private individuals?
2. What exceptions exist to a normal
demand curve?
3. Why is an oligopolist reluctant to
raise or reduce his price? How does he increase his market share?
4. Suggest reasons why two workers of
the Mobile Telephone Network (MTN) earn different wages.
Section B
5. Distinguish between autonomous and
induced savings.
What factors may increase household
savings in Cameroon
6. What are the uses of the retail
price index? Identify the problems encountered in constructing such an index.
7. Critically examine the economic
impact of the increased importation of Chinese products on the economy of
Cameroon.
8. Discuss the negative consequences of
unemployment. Suggest possible measures your government can use to reduce the
rate of unemployment.
Section C
9. Explain the concept of limited
liability. Outline the major differences between private and public limited
companies.
10. Identify the distribution channels
available to producers. What factors influence the choice of a distribution
channel?
June 2013
Section A
1. (a) What is meant by the production
possibility frontier? (10mks)
(b) Which basic
economic principles does this concept explain? (10mks)
2. With the aid of diagrams, explain
how the concept of price elasticity of demand will influence the distribution
of a subsidy between consumers and the producers. (20mks)
3. Why and how are monopolies
regulated? (10mks+ 10mks)
4. (a) Explain the Loanable Funds
Theory of interest rate determination. (10mks)
(b) What are the effects of a fall
in interest rate on an economy? (10mks)
Section B
5. Under what circumstance will an
attempt by a community to save more lead to less being saved? (20mks)
6. Explain the role of the Bank of
Central African States (BEAC) in the economy of Cameroon. (10mks)
7. (a) What are automatic stabilizers? (4mks)
(b) What are
the advantages and disadvantages of automatic stabilizers? (16mks)
8. Despite the benefits of imports to
an economy, they are still being restricted. Comment. (20mks)
Section C
9. (a) Distinguish between efficiency
and effectiveness. (8mks)
(b) How can a
Manager motivate his workers to be efficient and effective? (12mks)
10. Explain the positive and negative
effects of advertising? (12mk+8mks)
June 2012
Section A
1. “A mixed economic system is a bridge
between the free enterprise and planned economic systems” Discuss.
2. Define the rate of interest and
explain the factors that might cause it to change.
3. What is excess capacity? Why is it
common under monopolistic competition?
4. With the aid of the utility theory,
establish a demand curve for a normal good. Why do exceptional demand curves
exist?
Section B
5. “An effective demonstration of the
paradox of thrift will depend on whether the effect of increased savings on
realised savings is as a result of autonomous or induced investment” Justify.
6. “Bank deposits are largely created
by the banks themselves.” Explain. Are there any limitations?
7. What are the main categories of
government expenditure? Comment on the main functions of the government
expenditure.
8. “Protected trade is beneficial to
Cameroon in solving her trade imbalance”. Discuss
Section C
9. Define market segmentation and
explain why markets are segmented.
10. What is motivation? Show how
management can effectively use motivation to foster the growth of an
enterprise.
June 2011
Section A
1. What would be the effect of a
developing economy if it experiences net emigration?
2. How are changes in the market price
of a commodity brought about?
3. With the aid of diagrams, examine
the circumstances under which a firm should cease production.
4. To what extent may an increase in
the rate of interest influence the level of economic activity in an economy?
Section B
5. Define the accelerator and the
multiplier.
Show how they
can influence changes in the level of national income with an increase in net
investment.
6. “Liquidity and profitability are
conflicting objectives of the commercial bank” How can these objectives be
reconciled?
7. Critically analyse the impact of a
huge national debt on an economy like Cameroon.
8. What measures may the government of
Cameron adopt to eliminate a temporal deficit on its balance of payments?
Section C
9. Give a detailed description of the
process followed in forming a limited company
10. Identify eight problems which can be
faced by exporters and described in detail how the burden of these problems can
be reduced.
June 2010
Section A
1. It has been observed in Cameroon
that in the construction Industry, where increasing returns tends to operate,
small firms still operate side the big firms. Why may this be so?
2. With the aid of diagrams, explain how
a sustained increase in the demand for palm oil will affect the quantity and
price of palm kernels in the market.
3. What is meant by price
discrimination? Under what circumstances might price discrimination be
beneficial?
4. Explain the role of profit in a
market economy.
Section B
5. To what extend can National Income
Statistics be used to compare economic welfare between two countries?
6. Examine the instrument of monetary
policy and show how they can be used to reduce inflation.
7. Why may the government shift the tax
base from direct to indirect taxes?
8. Discuss the circumstance under which
devaluation will be effective in clearing a persistent balance of payments
deficit.
Section C
9. “Since the
sole-proprietor owns his business; it is more advantages for him to manage the
business than to employ a manager”. Discuss.
10. Carefully examine the role played by
sales-promotion in the expansion of the market size for a product.
June 2009
Section A
1. What are the advantages and
disadvantages of population growth?
2. Critically examine the main factors
that affect the demand for housing in major towns in your economy
3. Is profit maximisation by firms
their lone objectives?
4. Define the “rate of interest”. Why
are there so many rates of interest in an economy?
Section B
5. State the conditions necessary for
national income to reach a position of equilibrium.
6. Define the “Budget: and show how the
government can use it as an instrument of economic policy in your economy.
7. What do you understand by the money
supply?
Critically
examine the effects of an increase in the money supply in any economy.
8. Distinguish between devaluation and
an appreciation of a currency. To what extent can a devaluation successfully
eliminate deficits in the balance of payments?
Section C
9. What do you understand by the term
“Viability”? Show how it can be used in screening a new product idea.
10. Identify and discuss factors that a
cost-conscious manager will consider when choosing the location of his
industry.
June 2008
Section A
1. Distinguish between public and merit
goods and justify the supply of merit foods by government.
2. With the aid of diagrams, explain
the various forms of price elasticity of supply. Examine the factors which can
influence the elasticity of supply of tin tomatoes in Cameroon
3. Discuss the sources of monopoly power.
Show how the government can control the power of monopolistic firms in an
economy.
4. Carefully examine the relative
importance of the various factors which determine the location of industry in
Cameroon.
5. For what reasons should a trade
union demand for an increase in the wages of its members? Examine the possible
effects of such an increase.
Section B
6. What is the multiplier? Compare the
effects of the multiplier in a closed economy with government and that of a
four-sector economy.
7. Why is the government of Cameroon
shifting the tax base from income tax to value added tax (VAT)?
8. Make a critical assessment of the
role of commercial banks as agents of economic development. What are the major
problems faced by commercial banks in Cameroon?
9. “A balance payment surplus or a
deficit can both be detrimental. Therefore a country should try to obtain an
equilibrium in its balance of payments”. Discuss.
10. Explain why economic growth is
considered as one of the desirable objectives of government economic policy.
Examine the problems that may be encountered in trying to achieve a faster rate
of economic growth.
June 2007
Section A
1. How can the mobility of Labour be
encouraged? Why is it important to do so?
2. Define:
i.
Price elasticity of demand
ii.
Income elasticity of demand
iii.
Cross elasticity of demand
How would a knowledge of each type of elasticity of
demand influence production?
3. Why is a firm under perfect
competition necessary a “Price-Taker?
4. Use the economic analysis to explain
why some apparently pleasant and interesting jobs are well paid while some
dirty and unpleasant jobs are poorly paid.
5. Identify four methods of disposal of
new shares. What are the determinants of changes in the prices of shares on the
Stock Exchange Market?
Section B
6. Differentiate briefly between Marginal
Propensity to Consume (MPC) and Average Propensity to consume (APC). What
factors are responsible for a shift of the consumption curve?
7. How can taxes help in the attainment
of the economic policy objectives of your government?
8. How do commercial Banks create
credit?
Are there any limitations in doing
so?
9. “Trade Liberalisation, Trade
Protectionism”.
How would you advise your government
on each of the above policy objectives?
10. Account for the slow rate of
economic growth and development in Third World countries.
June 2006
Section A
1. Define “Opportunity cost” and
“social cost”. Explain how each to them affect government decision to develop a
new oil field in Kribi.
2. With the aid of well labelled
diagram explain how the prices of primary products can be stabilised.
3. Define an optimum firm. Show how a
perfectly competitive firm will be affected if it is producing either above or
below the optimum output.
4. Define privatisation and state the
forms it can take. How would you justify the current shift towards privatisation
in Cameroon?
5. Wages are generically determined by
free market forces for the same occupation, yet two teachers may earn different
wages. Explain
Section B
6. Assuming a closed economy in which
the government sector is absent, use the consumption/investment approach and
the saving/investment approach to show how national income is determined.
7. What is meant by discretionary
fiscal policy? What problems may be experienced in the use of fiscal policy?
8. Explain how a fall in the value of
money affects the efficiency with which it fulfils its functions.
9. Identify and explain the factors
which determine the external value of a country's currency in a freely
operating exchange market.
10. Examine the main features of
developing countries and analyse the strategies that may be adopted to overcome
under development.
June 2005
Section A
1. How is the Division of Labour
beneficial to a firm? What are the limitations of Division of Labour?
2. “The institution of a Maximum Price
Control will five rise to both advantages and disadvantages”. Explain.
3. Discuss the circumstances under
which a firm operating in a perfectly competitive industry would continue to
produce at a loss.
4. How is profit different from other
factors income? Explain the significances of profit in the Cameroonian economy.
5. Examine the relative advantages of
ordinary shares and debentures in the finance of industry.
Section B
6. “There is no reason to suppose that
the equilibrium level of national income and full employment level of national
will coincide? Explain
7. How may a government use fiscal
policy to fight inflation and unemployment?
8. How does the development of near
money and the growing use of money substitutes influence the demand for active
money balances?
9. Distinguish between absolute and
comparative advantage. Show how trade can take place between two countries by
way of the principle of absolute advantage.
10. Examine the possible problems for a
country experiencing a fast rate of economic growth.
June 2004
Section A
1. How might change in population
affect the standard of living in a country?
2. Examine the nature of competition in
a market dominated by few giant firms.
3. Explain why you would expect the
earnings of a medical doctor to be more than that of a teacher in Cameroon.
4. “A tax on a commodity is paid by
both the producer and the consumer of the commodity”. Comment on this
statement.
5. How and why may the government of
Cameroon encourage domestic mobility of labour?
Section B
6. With the aid of diagram, distinguish
between an inflationary gap and a deflationary gap. Suggest measures that the
government can use to reduce each of these gaps.
7. “Credit creation is the most
important function of commercial banks.” Explain how they perform this function
and the obstacles encountered.
8. Discuss the causes and problems of
high rate of unemployment in Cameroon. What measures do you think can be taken
by the government to reduce this unemployment?
9. Distinguish between Public Sector
Borrowing Requirement (PSBR) and the National debts. Does a large national debt
constitute a big burden to the state?
10. Outline the circumstance under which
a government would seek to reduce a Balance of Payment Surplus. What measures
might it use to reduce a Surplus Balance of Payment?
June 2003
Section A
1. The tendency nowadays is for most
countries to move away from planned to market economies. Explain why?
2. Using diagrams, show how an increase
in the demand for one of the goods in JOINT
SUPPLY will affect the price and quantities of both commodities.
3. Giving examples, explain why firms price
discriminate.
4. To what extend can a trade union
secure wage increases for its members in conditions of collective bargaining?
5. Define the Stock Exchange and show
the influence it would have on industrialization in Cameroon.
Section B
6. “Inflation no matter its causes is
generally disruptive to the economy and benefits nobody.” Discuss.
7. How is it possible for a nation to
have a favourable Terms of Trade and an unfavourable Balance of Payments?
8. Distinguish between a shift and a
movement along the consumption function and identify the determinants of the
consumption function.
9. Define the value Added tax (VAT) and
give a detailed explanation of how it can be collected. What are the advantages
of this type of a tax?
10. Critically examine the prescription
of the PHILIP’s curve in the cure of unemployment.
June 2002
Section A
1. Explain what is meant by scarcity
and choice in economics. How are these concepts linked to opportunity cost?
2. Define Price mechanism. What are its
disadvantages in the allocation of resources and finished goods?
3. How and why do firms grow?
4. Distinguish between a Public Limited
Company and a Private Limited Company.
5. Using the Liquidity Preference
Theory, show how the rate of interest is determined.
Section B
6. What problems are encountered when
using changes in National Income Statistics as the basis of comparing changes
in standards of living within the same country over time?
7. The current debate is on the
cancellation of the National Debt. Given the option between the external and
internal debt, which will you prefer to be cancelled any why?
8. How and why do central banks control
the credit policies of commercial banks?
9. Define, giving examples, the terms
Customs Union and Free Trade Area. Compare the characteristics of a Customs
Union and a Free Trade Area.
10. Discuss three objectives of
government economic policies, and show, how the attainment of these objectives
tend to conflict with one another.
June 2001
1. Why are most countries shifting away
from the planned economic system to the market oriented economic system?
2. “The determinants of price elasticity of demand
are basically different from the determinants of changes in supply”. Explain
3. Critically examine the role of
profits in a free enterprise economy?
4. a) Distinguish between the Marginal
propensity to consume and the average propensity to consume.
b) What are the determinants of consumption?
5. Explain what is meant by cost-push
inflation. Discuss the policies, which may be adopted by the government to
reduce cost-push inflation.
6. Identify four types of unemployment
prevalent in Cameroon. How would you advice the government on the reduction of
these types of unemployment?
7. Analyse the circumstance under which
devaluation is likely to improve the balance of payment.
8.
9.
10.
June 2000
1. Why may it be possible for a country
to increase the productions of both capital goods and consumer goods at the
same time when it is already on its production possibility frontier?
2. In which industries will small firm rather than large firm be
ideal? Explain your reasons clearly?
3. With the help of simple demand
curves in separate diagrams, prove whether or not the price elasticity of
demand is uniform along the demand curve.
4. Explain why a private sector firm
will neither reduce output of increase output once marginal cost equals
marginal revenue. Illustrate your answer with a typical MC and MR diagrams.
5. What would be the effect on the
demand for labour and he level of unemployment if a minimum wage is introduced
above the equilibrium level?
6. “A given change in Government
spending may result in a greater effect in the economy than the same change in
taxation”. Discuss.
7. Consider how the money supply can be
controlled.
8. With the use of appropriate example,
show how international trade is can be beneficial for two countries engaged in
it.
9. How might the imposition of
progressive tax affect;
a. The distribution of income?
b. Prices
c. Consumption
10. Describe the negative effects of
rapid rate of economic growth for your country.
It is better to
do thorough revision and be confident, than to speculate and be in doubts.
Assembled by
NDANG Gilbert
FARINKIA, PhD
18TH February, 2020.
Write your comments below or email to ndanggils@gmail.com
GOOD LUCK IN YOUR EXAMINATION
Write your comments below or email to ndanggils@gmail.com
GOOD LUCK IN YOUR EXAMINATION
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