Econ1101 Session 1, 2009 Final Exam

summon 1 of 14 THE UNIVERSITY OF NEW south WALES SCHOOL OF ECONOMICS SESSION 1, 2009 , , I ECONllOl MICROECONOMICS I FINAL inquiry TIME ALLOWED 2HOURS THIS PAPER IS WORTH 65% OF THE TOTAL SUBJECT learn This examination paper consists of two move berth A and resolve B disclose A consists of 20 multiple choice questions each worth onc and one quarter (1. 25) marks. come all the questions in decompose A on the answer weather sheet provided, using pencil . hardly Print your student number, pick out and initials in the space provided and mark he arrogate boxes below your student number, name and initials. For each question, mark tbe appropriate result (a), (b), (c), or (d). There is single one correct response to each question in Part A. Part B consists of quaternion (4) essay-type questions, each worth TWENTY (20) marks. practise totally TWO (2) questions from Part B. ANSWER EACH PART B QUESTION IN A SEPARATE EXAMINATION BOOKLET Answers to questions in Part B moldine ss be written in ink. draw may be apply in answers to Part B for drawing, sketching or graphical recordical work only . This question paper may be retained by the candidate There are 14 pages in this exam paper. 1 Page 2 of 14 PART A This section is worth 25 marks Mark your answer on Answer Sheet provided gesture 1 , A monopo list estimates that at the current pnce being aerated for the product, marginal Cost is greater than Marginal Revenue and the abso lute bell elasticity of demand is 1. 8. To increase profit the monopolist should a) Increase charge so that toll equals the maximum the consumer is unbidden to pay ) Decrease determine and trade more c) Set price equal to the minimum fair(a) cost d) Increase price and sell less Question 2 The Coase theorem suggests that private markets may not be able to solve the problem of externalities, a) Unless the government becomes involved in the service b) When the number of parties is large and the talk terms costs are high c) If the immobile in the market is a monopoly d) If some people benefit from the externality TURN OVER THE foliate 2 Page 3 of 14Question 3 Consider the following graph where a legally enforced chapiter price operates Price _ _ _ __ _ _ _ _, J __ _ G- s c , B ___H L_ , , , ___ L ___ I 01 , F , J I , O bb3 d -1 2 a) FEC. b) DAC. c) GJECF. Quantity The maximum dead weight loss due(p) to the price ceiling is represented by the areas d) JAE + DGF. Question 4 ameliorate competition is efficient and monopoly is not, because in perfect competition _ _ _ _ , while in monopoly _ _ _ __ a) P b) P c) MC PMC MC PEcon1101 Session 1, 2009 Final ExamPage 1 of 14 THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ECONOMICS SESSION 1, 2009 , , I ECONllOl MICROECONOMICS I FINAL EXAMINATION TIME ALLOWED 2HOURS THIS PAPER IS WORTH 65% OF THE TOTAL SUBJECT MARK This examination paper consists of two parts Part A and Part B Part A consists of 20 multiple choice questions each worth o nc and one quarter (1. 25) marks. Answer all the questions in Part A on the answer sheet provided, using pencil . only Print your student number, name and initials in the space provided and mark he appropriate boxes below your student number, name and initials. For each question, mark tbe appropriate response (a), (b), (c), or (d). There is only one correct response to each question in Part A. Part B consists of four (4) essay-type questions, each worth TWENTY (20) marks. Answer only TWO (2) questions from Part B. ANSWER EACH PART B QUESTION IN A SEPARATE EXAMINATION BOOKLET Answers to questions in Part B must be written in ink. Pencil may be used in answers to Part B for drawing, sketching or graphical work only . This question paper may be retained by the candidate There are 14 pages in this exam paper. 1 Page 2 of 14 PART A This section is worth 25 marks Mark your answer on Answer Sheet provided Question 1 , A monopo list estimates that at the current pnce being charged for t he product, Marginal Cost is greater than Marginal Revenue and the abso lute price elasticity of demand is 1. 8. To increase profit the monopolist should a) Increase price so that price equals the maximum the consumer is willing to pay ) Decrease price and sell more c) Set price equal to the minimum average cost d) Increase price and sell less Question 2 The Coase theorem suggests that private markets may not be able to solve the problem of externalities, a) Unless the government becomes involved in the process b) When the number of parties is large and the bargaining costs are high c) If the firm in the market is a monopoly d) If some people benefit from the externality TURN OVER THE PAGE 2 Page 3 of 14Question 3 Consider the following graph where a legally enforced ceiling price operates Price _ _ _ __ _ _ _ _, J __ _ G- s c , B ___H L_ , , , ___ L ___ I 01 , F , J I , O bb3 d -1 2 a) FEC. b) DAC. c) GJECF. Quantity The maximum dead weight loss due to the price ceiling is represented by the areas d) JAE + DGF. Question 4 Perfect competition is efficient and monopoly is not, because in perfect competition _ _ _ _ , while in monopoly _ _ _ __ a) P b) P c) MC PMC MC P