Question 1 (a) Mr. John Christopher Kizito owns Summit Bakery (SB). SB produces top quality cakes. SB's price function isP100,0002q. The firm's total cost function is TC 100,000 0.5q 2 , where q is the quantity of cakes. Required: Calculate the: (a) profit maximising output. (b) value of total cost. (c) unit price for a cake. Explain the different policy options that Mr. Kizito can consider in order to increase the profit level of Question 2

The government of Uganda intends to explore various tax policy options in order to stabilise the economy. As an expert in managerial economics and public finance, you have been approached by the Ministry of Finance, Planning and Economic Development for advise. Required:

(a) Discuss the constraints that may limit tax policy options available to Uganda's economy. (10 marks) (b) Evaluate the factors that can be used to mitigate constraints facing Uganda's tax system. (10 marks) (c) Explain the behaviour effect of taxation on Uganda's economy.

Question 3 (a) Mr. Patrick Opolo is dealing in second hand clothes in Natete market. The demand for his products has been declining overtime due to oversupply of the same products by his competitors in the market. For this reason, he has decided to forecast the demand of his product in order to stabilise the supply in the market.

Required:

i)Using the above scenario, explain the term trend projection method of demand forecasting. (4 marks)

ii)Describe the purpose of carrying out demand forecasting. (8 marks) ii)Describe the different statistical methods used in demand forecasting

(b) Explain the reasons why the demand curve has a negative slope. Question 4 In the recent past, members of the Budget Committee of Uganda's Parliament questioned the Minister of Finance, Planning and Economic Development on the poor performance of the budget. This issue came about because of poor revenue performance.

Required:

i)Discuss the role of budgeting in Uganda's economy. (10 marks)

ii)Describe the Ugandan government budgetary process. (10 marks)

iii)With the current high cost of living in Uganda, explain the implications on Uganda's economy if Bank of Uganda reduces lending rate. (5 marks)

Question 5 (a) Government of Uganda has been involved in trade with various countries within and outside the region. You have been approached by the ministry of Finance, Planning and Economic Development in order to inform Uganda's trade policy

Required: Explain the following terms: (i) Terms of trade. (ii) Volume of Trade. (iii) Balance of payment. (b) The Government of Uganda has been involved in trade of wheat and bananas with Kenya. The details of these trade dealings can be illustrated as follows: Commodities Wheat (bushels per hour) Bananas (bundles per hour)

Required:

Using the above illustration, explain the theory of comparative advantage in the production and export of wheat and bananas between Uganda and Kenya. (c) Of recent, the trade dealing in

(b) above have changed as per the details below: Commodities Wheat (bushels per hour) Bananas (bundles per hour)

Required:

Kenya Uganda 6 1 2 4 Using the above illustration, explain the theory of absolute advantage in the production and export of wheat and bananas between Uganda and Kenya