demand, government demand and demand by
foreigners of the nations output.
The Consumption Function
[expressed in mathematical or diagrammatic form]
occupations; account must be taken of payments
in kind, such as free uniform for policemen,
railway workers and may others, free travel to
and from work for those engaged in the
passenger transport undertakings, the use of
the car by some business executi
a) Calculate the value of work-in-progress at end of
b) Assuming that any units of normal or abnormal loss were
sold at a price of Shs 30 per unit, show the abnormal loss
account as it would appear after the units are sold.
maximum is that the second derivative be negative
for relative maximum.
Formally, d2y < 0
Thus for the profit function:
= -Q2 + 12Q 20
d2 = d (-2Q + 12) = -2 < 0
Q = 6 provides a relative maximum.
Theories of wage determination
Early theories about wages
The earliest theories about wage determination
were those put forward by Thomas Malthus,
David Ricardo and Karl Marx.
Thomas Robert Malthus (1766 1834) and the
Subsistence Theory of Wages:
ii. Average Propensity to save
The Average Propensity to Save [APS] is defined
as the fraction of aggregate national income which
is devoted to savings.
Thus if S denotes savings
In a closed ungoverned economy, where income is
spent or sav
100 cfw_ 1 + (3/5) + (3/5) + .
which thus equals:
100 = -1 3/5
= 100 - = 250
This result can be generalized, using our notation,
Dividing by I, we obtain
The ratio, Y/I, of the total i
The cost of units passing through the production
departments should include services ancillary to the
production orders to be complete.
When managers are made aware that costs will be
recovered on their departments, they are likely to
exercise care and
Variable costs will only vary at a constant cost pe
the legal consequences
hire purchase agreement.
(4 marks) EFFECTS
Under Section 5(4) of the Act, if a Hire Purchase Agreement is not
registered;1. The agreement cannot be enforce by any person agains
contract between the parties. ii. Where it is authorized by law. iii.
Where it is authorized by trade usage or customs. iv. Where it is effected
with the principals knowledge. v. Where it is reasonably necessary for
performance. vi. Where special skill is
transmission to the buyer without reserving the right of disposal. iv.
Payment for goods.
An unpaid seller is entitled to exercise a lieu on the buyers goods in his
possession even if the has made part delivery and the goods may be in
his possession or th
rendered. ii. Sue for the secret profit under an action for money had and
QUESTION THREE May 2005, Question 8 Explain the circumstances
the rules that govern
delivery of goods
as stipulated in
the Sale of Goods
(8 marks) RULES OF DELIVERY 1. Whether it is for the seller to transmit
the goods to the buyer or for the buyer to take delivery at the sellers
premises depends on
is payable by 5 or more installments. Property in the goods passes to
the buyer when the 1st installment is paid. It differs from a Hire
Purchase Agreement in that:1. It is a contract of Sale 2. Property in the
goods passes to the buyer when the 1st insta
QUESTION TWO December 2005, Question 5 a)
DUTIES OF THE AGENT 1. Performance: The agent must perform his
obligation if the agency is contractual. He is not bound to perform if the
have had a competent principal i.e. There was a natural or juristic
person who could have become the principal 3. The principal must have
had capacity to enter into the transaction when the agent did as well as
when the agent did as well as when he ratifi
1. related activities as well as auxiliary activities (such as
ordering, receiving, material handling costs etc) are
2. Cost Pooling: Involves the assigning of costs to cost centers
or cost pools. A cost center is created for each activity e.g
the necessary shock to the system leading
peasant cultivators, for example, to look for
new ways of increasing productivity.
new methods have been adopted to stop
income per head from falling, there might be
continued interest in innovations for the
capita income may be higher than that of
another country producing largely consumer
goods, but the standard of living of its people
will not necessarily be higher.
Income figures: The per capita income figures
The theory was developed during the Great
Depression which plagued Europe and America.
During this time, there was excess capacity and
idle resources and no effective demand i.e. people
were unemployed and had
1) defence-related goods may be produced and less
spent on social services, more producer goods
may be made and less consumer goods, and
there may be a surplus of exports over imports
representing investment overseas. Standards of
living depend on the qua
Karl Marx was a scholar, philosopher, journalist
and revolutionary extraordinary who spent
much of his life in dedicated poverty reading in
the British Museum Library.
His labour theory of value held that a
commoditys worth was directly proportional to
produced within a year.
Income per capita is
population of the country in a year.
INCOME PER CAPITA
It shows the standard of living a country can
afford for its people.
The level of in
= 4,000 (A) + 6,105.84 (F)
= 2,105.84 (F)
See Calculations for yield and mix variance in the parts that
(i). Material Mix Variance
= Actual Usage in Actual Mix
Actual Usage at the Standard Mix
At the standard price
Actual Usage in Actual Mix at S
Some people look at money at the face value.
Consumption will be affected if customers are
subject to money illusion. The phenomenon of
Money illusion occurs when despite proportional
changes in the prices of goods and services and
then their money income
Less: Residual error
Estimated depreciation on
The residual error is a small error
(about 1%) in the collection of these figures.
Calculating National Income
Types of Mainly
rules and cut
3.1 Organizational theories
Organizational theory is the body of
philosophical basis of the structure,
organizations. Such theory is derived
from historical schools of thought
stating the point of v
Zero profits imply that LRAC = LRAR. Therefore LRAC is tangent to AR at
Q1. But Q2 is the LR optimum output for the firm but with a negatively
sloped AR curve. Zero profits imply that each firm will utilize a scale of
plant smaller than opt
Perhaps the most notorious practice for which monopolists are known is
that of exploiting consumers by overcharging their products. There are
three ways in which the monopolist can overcharge his products.
The price charged by the
The money value of all goods and services produced within the
country but excluding net income from abroad.
Gross National Product
The sum of the values of all final goods and services produced by the
nationals or citizens of a country during the year, bo