THE UNITED REPUBLIC OF TANZANIA NATIONAL EXAMINATIONS COUNCIL

ADVANCED CERTIFICATE OF SECONDARY EDUCATION EXAMINATION

151/1  ECONOMICS 1

ECONOMIC THEORY

(For Both School and Private Candidates)

Time: 2:30 Hours Wednesday, 09^th February 2011 a.m.

INSTRUCTIONS

1. This paper consists of ten (10) questions in sections A and B.

2. Answer five (5) questions choosing at least two (2) questions from each section.

3. Each question carries twenty (20) marks.

4. Credit will be awarded for well argued answers.

5. Calculators are not allowed in the examination room.

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

7. Write your Examination Number on every page of your answer booklet(s).

SECTION A

1. Distinguish between the following:

(a) Specific factor of production and Non-specific factor of production.

(b) Specialization by process and Specilization by craft.

(c) Very short run period and Short run period.

(d) Production and Productivity.

2. Describe the advantages and disadvantages of centrally controlled economies.

3. Define diseconomies of scale and explain six (6) limitations of small scale firms to expansion.

4. The following table shows demand of Juma and Kassim for a product.

(a) On the same set of axes draw the demand curve for Juma (QJ), demand curve for Kassim (QK) and the aggregate demand curve (DAD A).

(b) What do you think might have caused the differences in demand by Juma and Kassim?

(c) Whose demand is more elastic? Give reasons for your answer.

5. Write short notes on the following concepts as used in marketing:

(a) World market

(b) Market place

(c) Market demand 

(d) Market size

(e) Market structure.

SECTION B

6. (a) Distinguish between nominal and real wages.

(b) Explain five (5) factors that determine real wages.

7. State five (5) advantages and five (5) disadvantages of large scale production.

8. (a) Highlight five (5) reasons as to why the demand curve is negatively sloped from left to right.

(b) Under what circumstances can a demand curve be positively sloped from left to right?

9. Discuss five (5) limitations of monetary policy in underdeveloped countries.

10. (a) Describe three (3) principles of Economics.

(b) Draw the production possibility frontier and highlight five (5) concepts that it illustrates.