Econ318 2015Exam1 MVBVisser.pdf - MVB Visser michal.visser...

MVB Visser
[email protected]
2017 Exam 1
Section A Quantitative
Question 1
1.1 Explain the formal relationship between national-accounts data valued at factor cost, basic prices
and market prices. [3]
1
Deflators use Headline inflation
1.3 What is the meaning of the concept "trade balance" and how is it calculated? [2]
1.4 Distinguish between historic and current diffusion indices. [2]
1.5 Briefly describe two types of underemployment that are distinguished. [2]
Frictional
1.6 Name four problems associated with price indices. [2]
Question 2
Calculate the average annual growth in real per capita gross domestic product for the period 2008 to
2014. Use the consumer price index (CPI) as deflator. [2]
Calculate the monthly growth in the number of vehicles sold at an annual rate for January 2015. [2]
Calculate the deflators for Gross Domestic Expenditure at market prices for the years 2013 and 2014
and then use these deflators to calculate the 2014 inflation rate. Also calculate the inflation rate or
2014 as measured by the CPI. Explain why the two measures of inflation differ. [5]

MVB Visser
[email protected]
Question 3
A firm is selling two goods, A and B, with a total profit function (TP):
𝑇𝑃 = −16 + 598.8? − 0.3?
2
+ 498.5? − 0.2?
2
− 0.2??
Find the quantities of products A and B that must be sold to maximise total profit. Prove that profit is
a maximum at these quantities. Calculate total profit at this maximum point. [5]