 |
PPE611S - PRINCIPLES OF PRODUCTION ECONOMICS - 2ND Opp - JULY 2022 |
|
|
1 Page 1 |
▲back to top |
n Am I BI A u n IVE Rs ITY
OF SCIEnCE Ano TECHnOLOGY
FACULTYOF HEALTH,APPLIEDSCIENCESAND NATURALRESOURCES
DEPARTMENTOF AGRICULTUREAND NATURALRESOURCESCIENCES
QUALIFICATION: BACHELOROF SCIENCEIN AGRICULTURE
QUALIFICATION CODE: 07BAGA
LEVEL: 7
COURSECODE: PPE611S
COURSENAME: PRINCIPLESOF PRODUCTION
ECONOMICS
SESSION:JULY2022
DURATION: 3 HOURS
SESSION:JULY
MARKS: 100
SECONDOPPORTUNITYEXAMINATION QUESTION PAPER
EXAMINER(S) DR DAVID UCHEZUBA
MODERATOR: DR THINAH MOYO
INSTRUCTIONS
1. This paper consists of two sections: Section 1 has five (5) multiple choice questions,
section 2 is made up of five essay type questions.
2. Answer ALL questions and in blue or black ink.
3. Start each question on a new page in your answer booklet.
4. Questions relating to this paper may be raised in the initial 30 minutes after the start of
the examination. Thereafter, students must use their own initiative to deal with any
perceived error or ambiguities & any assumption made should be clearly stated.
THIS QUESTION PAPERCONSISTSOF 6 PAGES(Including this front page)
|
|
2 Page 2 |
▲back to top |
Question 1
Find the level of corn yield with 4 units of Capital and 3 units of labour using the following
production
function,
= y
AK
L 0 165 0 81
·
·
,
where
K is the
capital
in
N$, Lis the
labour
measured in
man hour and A is a constant parameter given as 100 units.
a. 306.05
b. 306.00
c. 306.60
d. 306.06
e. 306.66
Question 2
The total cost of producing an item is N$200. The cost of capital per unit of production is N$25
and Labour cost per unit is N$25. What is the unit of labour used when capital per unit was 3?
a.5
b.50
C. 75
d. 15
e.25
Question 3
An Isocline is
a. a line connecting points on an lso-cost that have zero marginal rate of technical substitution
b. a line connecting points on an lsoquant that have the same marginal rate of technical
substitution.
c. a line connecting points on an lso-cost that have the same marginal rate of technical
substitution.
d. line connecting points on an lsoquant that have the different marginal rate of technical
substitution.
e. a line connecting points on an lsoquant that have the same return to scale.
2
|
|
3 Page 3 |
▲back to top |
Question 4
A ridgeline is an Isocline connecting points of
a. Positive slope on the lsoquant
b. Zero slopes on the lsoquant
c. Negative slope on the lsoquant
d. Negative slope on the expansion path
e. Positive slope on the expansion path
Question 5
To minimize profit, we equate the ratio of marginal productivities to the ratio of marginal factor
cost for the level of output. This principle is known as the
a. Profit minimization rule
b. Expansion path rule
c. lso-cost rule
d. lso-quant rule
e. Equi-marginal principle
3
|
|
4 Page 4 |
▲back to top |
Question 1
1.1. Draw a neoclassical production map showing total, average and marginal
productivities.
(5 Marks)
1.2. Using the map in question 1.1 above, explain the relationship between, the Total
Phyisical Product (TPP),Average Physical product (APP)and Marginal Physical Product.
(6 Marks)
1.3. Explain the term "Economic region of production"
(1 Marks)
1.4. Explain why neoclassical production surface is a sigmoid curve and not an infinite
increasing productivity function
(2 Marks)
1.5. Give reasons to explain why we undertake the following assumptions in production
economics
1.5.1. Output homogeneity
(2 Marks)
1.5.2. Mono-periodic production
(2 Marks)
1.5.3. Profit maximization
(2 Marks)
Question 2
2.1. Define the following
2.1.1. Partial elasticity of production
2.1.2. Function coefficient of production
(1 Mark)
(1 Mark)
2.2. Consider the production function
y = 5x + 2x 2 - 2x3
2.2.1 Find the elasticity of production when the output level is 4 units.
(8 Marks)
2.2.2. Find the elasticity of production at input level 6 for the given function
y=x 2 --x1 3
3
(8 Marks)
2.2.3. What can you say about the elasticity of production for the production function in
questions 2.2.1 and 2.2.2 above?
(2 Marks)
Question 3
3.1. For the two-input production function
4
|
|
5 Page 5 |
▲back to top |
y = 4xi°"6xi·2
Find the function coefficient at input level of two units
(12 Marks)
3.2. Find the degree of homogeneity and return to scalefor the following production functions.
a).Q=l0.xy-2x 2 -y2
(2 Marks)
b). y = 0.6x + 0.2y
(2 Marks)
c). Q = aJJK 1-fl
d).
Q
=
2x
2
1
+
6x 1x 2
+
2 lxi
(2 Marks)
(2 Marks)
Question 4
Suppose the Potato output sells for N$5 per unit and the input sells for N$4 per unit.
4.1. Fill in the blank spaces in the Table 4 below.
4.2. What is the profit maximizing level of input use?
Table 4 Profit maximizing level of input
Input
Output
0
0
10
50
25
75
40
80
50
85
Question 5
5.1. Define the following concepts
a) lsoquant
b) lso-cost
c) Marginal rate of technical substitution
VMP
-
-
-
-
-
AVP
-
-
-
-
-
(20 Marks)
(1 Mark)
(1 Mark)
(1 Mark)
5.2. Give reasons to explain why
a). lsoquants are convex to the origin
b) lsoquant curves cannot meet
(1 Mark)
(1 Mark)
5
|
|
6 Page 6 |
▲back to top |
5.3.
a). Find the necessary and sufficient conditions for the maximization of the following
production functions
= y l Ox1 + 10x2 - x12 - Xi
(5 Marks)
b) Check that this condition is fulfilled at the computed input levels
(5 Marks)
6