20061 - f.The University of New South Wales School of...

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The University of New South Wales School of Economics ECON 1101 MICROECONOMICS I Final Examination June 2006 Time Allowed: Two (2) Hours This paper is worth 60% ofthe total course mark This exam is comprised ofTwo Parts. Part A - 20 multiple-choice questions - worth 1 mark each. Answer all questions. Answer this Part on the Computer Answer Sheet. Part B - Four short-answer/essay type questions. Only answer Two (2) of these questions in the Answer books provided. Answer each question in a separate book. Indicate the question number in the space provided on the cover ofthe answer book. Each question is worth 20 marks. This paper may be retained by the candidate. No examination aids are allowed. Answers must be written in ink. Except where they are expressly required, pencils may be used only for drawing, sketching or graphical work. f.- J.
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Part A - 20 Multiple Choice Questions You should attempt all Questions. Select the best answerfrom the alternatives provided. Any double answers will count as being incorrect. No marks will be deducted for an incorrect response. Answer must be written in pencil on the Computer Answer Sheet. Write your name and Student ID number in the spaces provided. 1. The "free rider problem' of public goods refers to: (a) individuals' refusals to pay taxes (b) the inelasticity of individuals' demands for public goods (c) individuals' attempts to hide their preferences for public goods and to avoid paying for them (d) individuals' overuse of public goods 2. Which of the following correctly describes an external benefit resulting from an individual's purchase of preventive medical services such as influenza or measles inoculations? (a) By purchasing an inoculation an individual reduces the likelihood that his family or other contacts will catch the particular contagious illness (b) Purchase of preventive medical services benefits doctors by providing additional income (c) An individual saves money by preventing illness through inoculations instead of having to pay to have the illness treated (d) By reducing the number of sick days, inoculations allow the individual more work days, and thus more income 3. Economists argue that oligopoly may be the market structure most conducive to technological change and innovation because: (a) oligopolists must create new production methods in order to maintain prices equal to marginal cost (b) oligopolistic collusion allows existing firms to prevent the entry of new firms into the industry (c) oligopolists face competitive pressures from rival firms combined with the opportunity for economic profits (d) money is not wasted on advertising since there are few firms and each is well known 2
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4. Collusion among oligopolists
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20061 - f.The University of New South Wales School of...

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