Exam_ABF - ECO2003F: Intermediate Microeconomics...

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ECO2003F: Intermediate Microeconomics Examination May 2009 TOTAL MARKS: 240 This exam comprises TWO sections and 16 pages. SECTION A and B each count 50% of the examination mark. SECTION A: MULTIPLE CHOICE This section comprises 30 MULTIPLE CHOICE questions. Please make sure you record your student number in pencil on your MCQ sheet. Negative marking applies. Each question counts 4 marks. 1 mark will be deducted for each wrong answer. Selecting more than one answer for the same question incurs a 1 mark penalty too. If you leave a question blank, you will not be penalised. Only use pencil to fill in your MCQ sheet, and erase all unwanted marks thoroughly. SECTION B: PROBLEM SET Please answer each question of the problem set in a separate booklet Note question 4 requires only one option A or B to be submitted. TIME: 3 hours The duration of this examination paper includes appropriate reading time.
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Section A (120 marks) : ANSWER SECTION A ON THE MCQ SHEET USING PENCIL . 1. Bryan likes Pete Philly, a hip-hop artist, whose CDs (X) are only available on import, but whose music can be downloaded in lower quality mp3 format (Z) for a price strictly above zero. For Bryan: A) Pete Philly CD tracks and mp3s are perfect substitutes B) Pete Philly CD tracks and mp3s are perfect complements C) ° ±² = ∆? ± / ? ± ∆? ² / ? ² < 0 D) ° ±² = ∆? ± / ? ± ∆? ² / ? ² > 0 E) The own price elasticity of mp3 format tracks is ∞ 2. Consider the graphs below. In relation to the two scenarios shown in A) and B) above, which of the following statements apply: (i) Good X increases in price if the critical threshold, X’ is exceeded (ii) Good X decreases in price if the crit ical threshold, X’ is exceeded (iii) Assuming X’ is exceeded, the new price is a pplied to the entire consumption bundle in scenario A (iv) Assuming X’ is exceeded, the new price is applied to the entire consumption bundle in scenario B (v) The price of Y changes beyond X’ in scenario A A) (i) & (v) only B) (i) & (iii) only C) (ii) & (iii) only D) (ii) & (iv)only E) (iv) & (v) only
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Good X: ° = ± ² 1 ² 2 where m is income, p 1 is the price of Good X and p 2 is the price of Good Y. Which of the following statements accord with the preceding demand equation? (i) X & Y are complements (ii) X & Y are substitutes (iii) The demand for Good X is unrelated to the demand for Good Y (iv) X is a normal good (v) X is an inferior good A) (i) & (iv) only B) (ii) & (iv) only C) (iii) & (v) only D) (i) & (v) only E) (iii) & (iv) only 4 . Which of the graphs below match the same type of good as Good X in the preceding question? A)
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This note was uploaded on 05/23/2011 for the course ECON 203 taught by Professor Jules during the Spring '11 term at University of Cape Town.

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Exam_ABF - ECO2003F: Intermediate Microeconomics...

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