Question 1 (a) Mr. John Mukalazi incorporated Mivumba Limited over ten years ago. Mivumba Limited is located in the old taxi park in Kampala. The company deals in second hand clothes. 0f recent. the company started registering declining profit level due to high levels of competition. Required: (i) Explain the different means of competition Mivumba Limited can employee. (6 marks) (ii) Discuss any five ways in which profit can be increased in Mivumba Limited. (10 marks) (b) Developing countries have created public enterprises for a number of reasons however. their performance has been hindered by many factors. Required: Explain the common problems of public enterprises in Uganda's economy. (9 marks) (Total 25 marks) Question 2 Ms. Rema Makula operates Denzo confectionary, one of the leading confectioneries in East Africa. The demand and supply functions of Denzo confectionary are 0., = 360,000 - 4UP and (l... = - 120.000 + 120P respectively where P is the price level. Required: (i) Compute the equilibrium price and quantity of the confectionary. (8 marks) (ii) In a bid to outcompete other confectioneries in the region. Ms. Rema Makula recruited a production manager. The new manager wishes to represent the existing demand function as a bP where a is a constant and b is the slope of the demand function. Assuming that a = 1.000.000 and b = 5. Compute the amount of output when price P is Shs 4,000. (5 marks) (iii) Discuss government policies that may affect the demand of Denzo confectionary products. (12 marks) (Total 25 marks) Question 3 (a) (b) Exchange rate market in Uganda was liberalised during the 1990s following the liberalisation of Uganda's economy. This implies that the exchange rate market freely operates by forces of demand and supply. Required: Explain the following terms: (i) Fixed exchange rate. (4 marks) (ii) Floating exchange rate. (4 marks) The exchange rate of 1USD was Shs 3,200 in January 2018. at the beginning of 2019. the exchange rate of1USD was Shs 3.550. Required: (i) Calculate the percentage change in the exchange rate. (5 marks) (ii) Explain whether the Uganda shilling depreciated or appreciated. (2 marks) (c) Discuss the effect of national debt burden on Uganda's macro-economic indicators. (10 marks) (Total 25 marks) Question 4 (a) A recent report by World Bank indicates that Uganda's education system (b) has deteriorated over the last 10 years. Nevertheless, education is a public good that may serve to re-distribute income in an economy. Over the years. the government of Uganda has also taken a deliberate effort to encourage private investment in the education sector. Required: Discuss how the liberalisation policy has benefitted the education sector. (10 marks) With examples. explain the following terms: (i) Private goods. (3 marks) (ii) Public goods. (3 marks) (iii) Common resources. (3 marks) Managerial Economics 8: Public Finance - Paper 4 (o) Explain how fiscal policy can be used to promote income distribution in an economy. (6 marks) (Total 25 marks) Question 5 (a) Mr. Ben Kasozi is producing improved charcoal stoves in Kampala District. The demand for his product has been declining over time due to unclear circumstances. Required: Explain factors that may determine the demand for the charcoal stoves. (10 marks) (b) For the last 15 years, Government of Uganda has been operating a deficit budget. To many, a deficit budget may not be the best way to go for the country because it may exuberate Uganda's debt burden. Required: Using your experience as a managerial economist and public finance expert. explain ways of financing a deficit budget. (6 marks) (c) Discuss the major obiectives of fiscal policy to Uganda's economy. (9 marks) (Total 25 marks)