MPE 781/981: GUIDE TO EXAMINATION QUESTIONS
Note that not all questions from all past exams are prented here. Additionally the answers are meant only as a guide and students are expected to attempt past exams themlves and then u the guide to check if they have fully addresd the demands of each question. Importantly, students should ensure they are quickly able to identify which concept, graphs and figures (if relevant) each question requires of them. DO NOT simply read through this and feel confident that you know the answers and concepts. Attempt the questions on your own prior to referring to this guide to e if you are on the right track. The questions prented here are NOT an exhaustive list of the material that will be covered during the exams. Also questions on the MULTIPLIER are no longer relevant in this cour and will not be discusd.
2010: T1
SECTION A
U the example given in Topics 1 and 8 to illustrate how two nations producing only two goods can benefit from specialisation and then trade.
First identify which country has a comparative advantage (lowest opportunity cost).
Remember to note how total production has incread and how both countries can consume more of each good after trade. The type of policy that this recommends is that countries should be practising free trade and specialisation.
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You can quickly draw the graph depicting the deadweight loss that comes from a tariff. Explain that this is due to inefficient local producers producing, and less consumers getting the good.
U the arguments from Topic 8 to discuss why tariffs still exist nonetheless.
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This can be found in Topic 10 under …Macroeconomic Schools of Thought‟. The main differences are that the Keynesian view believes in government intervention in order to control aggregate demand whereas the classical/monetarist view believes that the market adjusts itlf and full employment will be reached without intervention. You can illustrate both the cas briefly by using the AD/AS framework to show how in the Keynesian ca, if SAS does not automatically adjust, AD must be ud to reach full employment.
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summaryDefine, using the formula, or in words, the meaning of the various elasticities.
Elasticities are ud to tell us how changes in demand or supply can affect price and quantities (or in the ca of income elasticity, income and quantities). An easy example would be how elasticity can determine the amount of tax revenue a government enjoys, which can be illustrated with a diagram. Other examples you can give include the size of deadweight loss during a tariff or quota. Generally, elasticity of demand tells us how a shift in the supply curve changes price and quantity, while elasticity of supply tells us how a shift in the demand curve changes price and quantity.
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U welfare analysis on ONE diagram to compare Consumer Surplus and Producer Surplus from monopoly and perfect competition. Remember in perfect competition, equilibrium output will be where MC=D (since MC is supply), whereas in a monopoly, output is where MC=MR. Don‟t be confud by the fact th at perfect competition is suppod to have a horizontal demand curve. It‟s MARKET demand curve is still downward sloping like the monopoly so you can u one demand curve to reprent both market structures. You can refer to Topic 6 for the graph.
For the cond part, the question requires discussion of natural monopolies and how government regulation through average cost or marginal cost pricing can result in an efficient monopoly.
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For each of the question, u a demand and supply of Australian dollars diagram. Simply shift the appropriate curve in the diagram and discuss what happens to the exchange rate, and the quantity exchanged. For (a) there is an incread demand for AUD; (b) decread demand
for Australian exports, therefore decread demand for AUD; (c) is slightly more complicated. If we‟re not at full employment, then a shift in AD will increa output and income, so we may demand more imports and increa the supply of AUD. If we‟re at full employment, only prices go up with the shift in AD. This will cau the price of exports to increa through inflation and instead reduce the demand for AUD.
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SECTION B
A: You u the ca where the economy is already at full employment (plea u the diagram). In such a ca, the increa in government spending may increa inflation and output in the short-run through a shift in AD, but in the long-run SAS will shift to return to its original output position, but now with inflation.
美容培训中心B: Same as above, since decrea in interest rates increas spending and AD. Note that long-run effects can occur if the country is NOT at full-employment.
C: Although like the other cas, INCOME tax cuts will increa spending and shift AD, income tax cuts may also have an effect on the LAS through incread labour supply. If so there could be a permanent increa in full employment in the long-run. In terms of prices, it may either go up or down depending on the size of the respective shifts in AD and AS. You simply need to draw one ca, but discuss the possibility of others.
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This is quite a straightforward question. Remember to describe the characteristics of each market, and draw the curves for the firm. Refer to Topic 5 and 7 for more details and examples.
Remember that in the short and long run both perfect and monopolistic competition have the same possibilities (profit, loss, break even). HOWEVER, a perfectly competitive firm will
always be producing at the efficient scale level in the long-run, but the monopolistic competitive firm will NEVER be able to do so. Make sure you know why.
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商务英语翻译ppt>thomson reuters
家翻译
The dominant strategy can be calculated one firm at a time by simply asking: “If I was firm one and firm two cho A, what would I choo? If firm two cho B, what would I choo?” If what you choo in both cas is the same, we say that firm A has a dominant strategy; that is, firm A choos the same action regardless of what firm B decides.
The same can be applied to firm B.
First, define the Nash equilibrium. It is an outcome such that both players are choosing their best option, given the best option of the other players. It is an equilibrium since once we are at it, there is no incentive for any one party to change their decision. In this ca the Nash Equilibrium is the dominant strategies of both firms. You can show that at this point, no one player can do better by changing his decision.
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The …best‟ outcome in economics is usually the …efficient one‟, or the one where the total surplus or payoff is the highest. In this ca, it is not clear, since the outcomes sum to 100 with the exception of [40,40]. But since [40,40] is the equilibrium, we can say it‟s related to the Prisoner‟s dilemma becau the equilibrium is an inferior one. Players can do better if they coordinate or trust each other.
专业英语In a one-shot game, a coalition is easily broken becau there is no way to establish a reputation, or to punish …cheaters‟. You can u the arguments in the text and in the slides (Topic 7) to talk about how a repeated game may tempt players to form a coalition instead, since in that ca, a cooperative equilibrium is sustainable.
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2009: T2
PART A
nebraskaThis is straightforward and a direct replication of the figure in Topic 3 on a price floor t ABOVE the equilibrium. Remember to do a welfare analysis to say who are the winners and lors from the imposition of a minimum wage.
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The first step would be to draw the diagram with a firm‟s cost curves.
1) A firm‟s marginal productivity is inverly related to a firm‟s marginal cost. Explain why a firm would experience decreasing marginal productivity.
2) Why is the ATC curve U shaped? U the downward sloping AFC to explain the initial downward sloping part, and the upward sloping MC/AVC curve to explain the latter upward sloping part of the ATC. You need to explain why AFC is downward sloping, since you have already explained why MC is upward sloping in the ction (1).
hero3) Why does MC cross ATC at the minimum? This is purely a mathematical relationship between MC and AVC. When an add itional unit (i.e., a …marginal‟ unit) costs below average, then the average cost must fall. When an additional unit costs above average, average cost must increa. Hence we get the relationship that when MC is below ATC, ATC must be downward sloping, and when MC is above ATC, ATC must be upward sloping.
