20062 - T he 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 November 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.
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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 imposition of an import tariff: (a) raises revenue for the quota holders (b) reduces the consumption deadweight loss the more inelastic is domestic demand (c) increases the production deadweight loss the more inelastic is domestic supply (d) reduces domestic producer surplus 2. If an economy is producing two goods - capital goods (that embody the latest technology) and consumption goods - and is on the PPF, the most likely effect of an increase in the output of capital goods is that the output of consumer goods will: (a) fall in the short run and in the long run (b) fall in the short run but rise in the long run (c) rise in the short run and in the long run ( d) rise in the short run and fall in the long run 3. A market supply curve shifts to the right. This might have been caused by: (a) a successful marketing campaign (b) an increase in consumer's real incomes (c) the exit of some suppliers from the market (d) a fall in per unit labour costs following productivity improvements 2
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4. Two countries (the UK and Italy) can produce two goods (freezers and dishwashers). The PPF for the UK cuts the axes at 2000 freezers and 1000 dishwashers. For Italy it is 1600 freezers and 400 dishwashers. It can be deduced that: (a) The UK should export freezers and import dishwashers (b) There is no basis for trade (c) The UK should export dishwashers and import freezers (d) Italy has an absolute advantage in both goods 5. Firms in a monopolistically competitive market: (a) face a perfectly elastic demand curve (b) sell a homogenous product (c) suffer from excess capacity (d) make economic profits in the long-run 6. In order to maximize short-run profits, a monopolistically competitive firm should produce the output at which:
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This note was uploaded on 12/31/2011 for the course ECON 1101 taught by Professor Julia during the Three '08 term at University of New South Wales.

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20062 - T he University of New South Wales School of...

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