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PPE611S - PRINCIPLES OF PROUCTION ECONOMICS - 1ST OPP - JUNE 2025 |
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n Am I BI A u n IVER s I TY
OF SCIEnCE Ano
FACULTY OF HEALTH, NATURAL RESOURCES AND APPLIED SCIENCES
DEPARTMENT OF AGRICULTURAL SCIENCES AND AGRIBUSINESS
QUALIFICATION: BACHELOR OF SCIENCE IN AGRICULTURE
QUALIFICATION CODE: 07BAGA
LEVEL: 6
COURSE CODE: PPE621S
SESSION: JUNE 2025
COURSE NAME: PRINCIPLESOF PRODUCTION
ECONOMICS
PAPER: 1
DURATION: 3 HOURS
MARKS: 100
EXAMINER(S)
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
DR TEOFILUS SHIIMI
MODERATOR: PROF.THINAH MOYO
INSTRUCTIONS
1. This question paper consists of five {5} questions.
2. Answer ALL questions in blue or black ink.
3. Start each question on a new page in your answer booklet.
THIS QUESTION PAPER CONSISTS OF 4 PAGES {Including this front page}
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Question 1
(a) Discussthe importance of studying Production Economics. At least two points.
[4]
(b) Mention three of the most important factors of production.
(3)
(c) Differentiate the short-run production process and long-run production process
(4)
(d) Discuss the physical relationship between resources (inputs) and output (yield) in a production
function.
(4)
Sub-Total
(15)
Question 2
"Assuming the relationship between Mahangu yield and Nitrogen fertiliser application is given as:
= y 0.84x + 0.0068x 2 - 0.0004Sx 3
(a) Calculate the Mahangu yield when the quantity of fertiliser applied is 5, 10, 15, ...50. Round your
answers to the nearest whole number.
[10]
Quantity of Nitrogen
(kg/ha)
5
10
15
20
25
30
35
40
45
50
Mahangu yield (kg/ha)
Total Physical Product
(TPP)
Average
Physical Marginal
Physical
Product (APP)
Product (MPP)
(b) Discussthe result of the Mahangu yield (TPP).
[3]
(c) Calculate the average physical product and fill in the Table.
[10]
(d) Discuss the relationship between the input used in the production and the Average Physical
Product.
[2]
(e) Calculate the Marginal Physical Product and fill in the Table.
[9]
(f) Discuss the relationship between the input used in the production and the Marginal Physical
Product.
[2]
Sub-Total
(36]
Question 3
(a) Assume the following function gives a maize production function.
y = 4 + 24x - 4x 2
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(i) Find the input level that maximises output.
[2]
(i) What is the maximum Maize output at the calculated input level?
[2]
(ii) Find the input level that Average Physical Product
[3]
(b) Define the following concepts.
(i) Production efficiency
[2]
(ii) Technical efficiency
[2]
(iii) Allocative efficiency
[2]
(iv) Economic efficiency
[2]
(c) The total cost of producing an item is N$450. The cost of capital per production
unit is N$30 and the Labour cost per unit is N$SO.
(i) Determine the Isa-cost equation.
[2]
(ii) Draw and label the lsocost line.
[3]
Sub-Total
[20]
Question 4
(a) Assume you are considering the production function in the short-run, specify which
production stage is the following happening?
(i) TPP is increasing at an increasing rate, and MPP is increasing.
[2]
(ii) TPP has a slope= 0.
[2]
(iii) APP is declining and above MPP, but MPP is negative.
[2]
(iv) TPP is increasing at a decreasing rate, and MPP is decreasing but above APP.
[2]
(v) TPP is constant
[2]
(b) Explain why you cannot recommend someone to produce in stage Ill in relation to the
quantity of inputs and the Total Physical Product.
[2]
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(c) Study the isoquant lines below and answer the questions below:
Quantity of X2
9
8
7
300
6
450
4
3
l3 = 600
1
1
-- h =450
l1 = 300
0 1 2 3 4 5 67 8 91
Quantity of X1
(i) On the isoquant line above, which of the isoquants would you recommend a rational farmer
to produce goods? Motivate your choice.
[2]
(ii) What do points A and B mean to you?
[2]
(iii) Which one between points (A and B) do you recommend to the rational
farmer to produce? Motivate your choice.
[2]
(iv) Given the available choice, will you be comfortable producing at point C? Motivate your
answer.
[2]
(d) List three features of an lsoquant.
[6]
(e) Give reasons why the lsoquant line cannot cross.
[3]
Sub-Total
[29]
End!
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