University: Botswana

UNIVERSITY OF BOTSWANA
BOTSWANA COLLEGE OF' AGRICULTURE
F'ACULTY OF AGRICULTURE
UNIVERSITY EXAMINATIONS FOR AGRICULTURAL ECONOMICS
AEBzIz - INTRODUCTION TO AGRICULTURAL ECONOMICS
DATE: 19.11.2013 TIME : 0800- I 000hrs
INSTRUCTIONS
to answer a total of FOUR out of FIUE questions in this examination paper.

Candidates øre required
Questíons 1 ønd 2 ARE COMPULSORY. All answers should be written in the answer book provided. All
questions carry equal marks and marlæ shown against parts of a question indicate the distribution of marks
parts within the question.
I
QUESTION I (25 marks)
Write a T for true if the statement is true and an F for false if the statement is false in each of the
following questions: (1.67 each)
a.----------- The national income accounting identity says:

y:C+t+G+(X_M).
b.---------- Government should aim for azero unemployment rate.
c.---------- The purpose of national income accounting is to determine how healthy the Botswana
economy is.
d. Gross Domestic Product disregards depreciation.
e.---------- It is reasonable to expect the cross price elasticity of demand for golf clubs and golf
balls to be positive.
f.--------- If the demand is perfectly elastic, then a shift in the supply curve does not affect the
equilibrium price.
o ---------
Þ' The equation for Andy's demand curve for CD'S is Q = 20 - 0.5P. If the price of CDs
is Pl8, consumer surplus will be Pl2l.
h.---------- If the income and substitution effects of a price increase move in the same direction, the
good whose price has changed is a normal good.
l.---------- I
At a consumer's equilibrium demand choices for goods and 2, the marginal utility of
good I equals the marginal utility of good 2.
j Microeconomics focusses on the actions of a single firm or a specific group of firms.
k.---- The demand curve for an inferior good slopes upward.
If a cost is implicit, then monetary payments are involved
m.--------- The opportunity cost of producing a good tends to increase as more of that good is
produced because resources are required.
n.-------- Average total cost can be found by adding average frxed cost and total variable cost.
o.-------- Marginal cost is found by dividing total cost by output.
QUESTION 2 (25 marks)
Choose the best answer in each of the following questions and indicate by circling it. (1.67 each).
The aggregate supply curve shows the relationship between the aggregate price level and:
a. Aggregate output supplied
b. Aggregate money supply
c. The aggregate unemployment
d. Aggregateemployment.
2
ii. An increase in the aggregate price level will increase:
a. Shortrun aggregate supply
b. The quantity of aggregate output supplied in the short run
c. Aggregate demand
d. The quantity of aggregate output demanded.
iii. The short run aggregate supply curve would shift to the left for all the following reasons
EXCEPT
a. A decrease in productivity
b. An increase in nominal wages
c. An increase in the price of commodities used for production
d. An increase in interest rate.
iv. The price elasticity of demand is:
a. The ratio of the percentage change in quantity demanded to the percentage change
in price
b. The responsiveness of revenue to a change in quantity
c. The ratio of the change in demand divided by the change in price
d. The response ofrevenue to a change in price.
v. Economists use the term utility to mean:

a. The contribution a good or service makes to a social welfare
b. Any characteristic of a good or service which cannot be measured
c. The value of a product before it has been advertised
d. The satisfaction a consumer obtains from a good or service.
vi. The law of diminishing marginal utility states that :
a. Total satisfaction will decrease as more units of the good are consumed
b. The satisfaction from each additional unit of a good consumed will decrease
c. Total utility will become negative
d. Both (a) and ( c ) are corect.
vii. A consumer will buy more units of a good if the value of the good's;
a. Total utility is less than the price b. Marginal utility is less than price
c. Marginal utility is greater than the price d. Total utility is greater than the price
viii. The curve that is traced out when we keep indifference curves and the budget line constant
and change the price ofa good is;
a. The Engel curve b. The price - consumption curve for the good
c. The substitution curve d. The demand curve.
ix. Indifference curve is defined as the set of points:

a. Which yield the same marginal utility
b. Where the consumer is in equilibrium as prices change
c. Where the consumer is in equilibrium as the consumer's income changes
d. Which yield the same total utility.
J
x. Consumer surplus means :
a. The area between the average revenue and marginal revenue curves
b. The difference between the maximum amount a person is willing to pay for a good
and its market price
c. Household saving
d. The area inside the budget line.
xi. The limits imposed on household choices by income , wealth and product prices are the
a. Budget constraint
b. Choice set
c. Assumption of perfect knowledge
d. None of the above.
xii A consumer's Marginal Rate of Substitution shows:
a. The slope of the budget line
b. The slope of the indifference curve
c. The ratio of prices of the two products
d. All of the above
Xln If demand is price elastic, then:

a. A rise in price will raise total revenue
b. A fall in price will raise total revenue
c. A fall in price will lower the quantity demanded
d. A rise in price won't have any effect on total revenue.
Xiv The expenditure approach to calculating Gross Domestic Product (GDP)

a. Addsconsumptionexpenditure,investmentexpenditure,
government expenditure, interest payment and wages
b. Adds up the total amount spent on newly produced domestic goods and services
during the year
c. Adds up the total value of all income earnings during year
d. Excludes investment expenditures because they yield consumption in the future.
XV Gross Domestic Product:
a. Only includes fTnal goods and services to avoid double counting

b, Does not include the transfer payments or financial transactions
c. Does not include the transfer of second hand goods
d. All the above.

University: Botswana

Uploaded by

Copyright:

Available Formats

University: Botswana

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

University: Botswana

Uploaded by

Copyright:

Available Formats

UNIVERSITY OF BOTSWANA

BOTSWANA COLLEGE OF' AGRICULTURE

UNIVERSITY EXAMINATIONS FOR AGRICULTURAL ECONOMICS

AEBzIz - INTRODUCTION TO AGRICULTURAL ECONOMICS

DATE: 19.11.2013 TIME : 0800- I 000hrs

to answer a total of FOUR out of FIUE questions in this examination paper.

a.----------- The national income accounting identity says:

d. Gross Domestic Product disregards depreciation.

If a cost is implicit, then monetary payments are involved

QUESTION 2 (25 marks)

v. Economists use the term utility to mean:

ix. Indifference curve is defined as the set of points:

Xln If demand is price elastic, then:

Xiv The expenditure approach to calculating Gross Domestic Product (GDP)

XV Gross Domestic Product:

a. Only includes fTnal goods and services to avoid double counting

You might also like