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Meru University Labour Economics Exam

This document outlines the examination details for the Bachelor of Commerce degree at Meru University of Science and Technology, specifically for the Labour Economics course. It includes instructions for answering questions, various topics to be covered such as marginal productivity theory, labour market functions, and factors affecting labour demand. The exam consists of multiple questions requiring explanations, calculations, and analysis related to labour economics.

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teresiah wanjiru
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130 views3 pages

Meru University Labour Economics Exam

This document outlines the examination details for the Bachelor of Commerce degree at Meru University of Science and Technology, specifically for the Labour Economics course. It includes instructions for answering questions, various topics to be covered such as marginal productivity theory, labour market functions, and factors affecting labour demand. The exam consists of multiple questions requiring explanations, calculations, and analysis related to labour economics.

Uploaded by

teresiah wanjiru
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

MERU UNIVERSITY OF SCIENCE AND TECHNOLOGY

P.O. Box 972-60200 – Meru-Kenya.


Tel: +254 (0)799529958, +254 (0)799529959, +254 (0)712524293
Website: [Link] Email: info@[Link]
University Examinations 2019/2020

FOURTH YEAR, FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR


OF COMMERCE

BEC 3356 – LABOUR ECONOMICS

DATE: DECEMBER 2019 TIME: 2 HOURS

INSTRUCTIONS: Answer question one and any other two questions.

QUESTION ONE (15 MARKS)


a) Distinguish between the following terms in relation to labour economics ;
(i) Marginal revenue product and marginal physical product (2 Marks)
(ii) Marginal fixed cost and average revenue product (2 Marks)
(iii) Labour and production (2 Marks)
b) Explain three major sociological constraints that influence labour market. (6Marks)
c) Study the table below and answer the questions that follow;
Quantity Output (Q) Marginal physical Price = marginal Marginal revenue
production (MPP) revenue(Ksh) product (MRP)
P=MR
0 10 - 5 -
1 19 - 5 -
2 27 - 5 -
3 34 - 5 -
4 40 - 5 -
5 45 - 5 -
6 45 - 5 -
7 42 - 5 -

Meru University of Science & Technology is ISO 9001:2015 Certified


Foundation of Innovations Page 1
Required;
(i) Fill in the missing values in the columns of marginal physical product(MPP) and
marginal revenue product (MRP) (8 Marks)
(ii) State with reason the kind of market in which this firm operates. (2 Marks)
d) Labour is an indispensable factor of production. State and explain four ways in which
labour can be improved. (10 Marks)

QUESTION TWO (20 MARKS)

a) Explain five limitations of the marginal productivity theory. (10 Marks)


b) The population and labor growth rate of a certain country were found to be growing
exponentially. Given that the total population today is 24 million people of which a
quarter is employed, find the percentage change in working population over the next three
years. (10 Marks)

QUESTION THREE (20 MARKS)

a) State and explain five functions of labour market in an economy. (10 Marks)
b) Given the function = = 18 − 0.3 where L = Labour and Q= Output,
determine the range over which the firm can use workers for optimal output(10 Marks)

QUESTION FOUR (20 MARKS)

a) Explain five contributions of the theory of wages in determination of wages(10 Marks)


b) Given that = = 12 − 0.4 maximizes output, then find the output level that
maximizes the Average product of labour (APL)Q= output and L = units of labour
(10 Marks)

QUESTION FIVE (20 MARKS)

a) State and explain five factors that affect demand for labour (10 Marks)
b) Suppose that you have the following production function;
⅔ ⅔
=

Where: K = units of capital employed

Meru University of Science & Technology is ISO 9001:2015 Certified


Foundation of Innovations Page 2
L= units of labour laws employed and

Y= Total production

The wages rate is ksh 15 per hour and a cost of capital equal to ksh.1,920 per unit while
27 labour laws are required plus one unit of capital.

Required;

Calculate;

(i) Total cost (2 Marks)


(ii) Average cost (4 Marks)
(iii) Marginal product of labour (4 Marks)

Meru University of Science & Technology is ISO 9001:2015 Certified


Foundation of Innovations Page 3

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