ECON1001 Past exam paper (1 Viewer)

[ToO LaZy ^*]

1. If there are 5 consumers in the car market, and each of them has an identical demand function P = 15 - 20q, where P is price and q the individual consumers quantity demanded, then the market demand for cars would be

a. P = 15 - 4Q where Q is the sum of individual q.


anyone care to explain why the answer is a) ?



and...


8. The government is considering providing a subsidy in the market for Weetbix. Which of the following statements is true? The greater the elasticity of supply,

a. the greater the benefit to the buyer, and the greater the cost to the government.



9. According to Figure 1, when the supply curve for gasoline shifts from S1 to S2:

b. a surplus will occur at the new market price of P2.
d. a shortage will occur at the new market price of P2.
the answer says D, but i still think it's B..? anyone agree/disagree??

 

[ToO LaZy ^*]

18. Consider the market for stereos. This market has one seller (a monopolist) with constant marginal cost MC = $2 per unit and no fixed costs of production. Demand for stereos is given by q = 20 – 2P, where q is quantity demanded and P is the price of a stereo. If the monopolist uses perfect price discrimination:

d. The output in the market will be 16 units; the monopolist’s profit will be $64; the deadweight loss will be $0.

how do you find the profit??


last one...

20. The cost of reducing each unit of pollution costs firm A $10 for the first unit of pollution abated (or reduced), $20 for the second unit abated, $30 for the third, $40 for the fourth, $50 for the fifth, $60 for the sixth and $70 for the seventh unit of pollution that is not emitted. For firm B the costs of reducing pollution are $5 for the first unit not emitted, $15 for the second unit abated, $35 for the third unit, $37 for the fourth unit, $45 for the fifth unit, $55 for the sixth unit not emitted and $65 for the seventh unit not emitted. The government imposes a tax of $31 for each unit of pollution emitted. What is the total level of abatement (or the total reduction) in pollution after the tax has been implemented?

a. 5 units

huh?..how do you work that out?!

man this totally blows..got around 6 right

 

[sarevok]

For the pollution one, firm A won't emit the first three units of pollution because the cost of not emitting them is less than the cost of emitting them, the cost of emitting them being the tax; but they'll emit the rest because the cost of not emitting them is greater than the tax. Firm B won't emit the first two units of pollution for the same reasons. Thus, in total 5 units of pollution are reduced from being emitted.

Fucking stupid question though, it alludes to topics like externalities and taxes whilst not requiring any knowledge at all.

For question 9, d) is correct, look at the price ceiling, where demand and supply intersect it demand is greater than supply.

For question 8, you just need to draw a graph. Remember the more elastic is supply the more it will be shifted down/up by a tax or subsidy.

For question 18 you have to take into account that the monoply captures all the consumer surplus, so just draw a graph and work out the area of the triangle.

For question 1 though, I would have thought b) to be correct??

 

[Sarah168]

Question 1

P = 15-20q
q = 1/20 (15-P)

Q is the sum of 5 small q's
so 20Q = 75 -5P
5P = 75-20Q

so P = 15-4Q

 

[kow_dude]

From last year's paper:

"Suppose there is a negative externality in production resulting in a constant perunit external cost"

Which of my diagrams is correct?? 1 or 2?

 

[yvonne_710]

my tutor said that it is wasting time to do past paper.............errrrrrrrrrrrrrrrr.

 

[kow_dude]

What.... then what should we do?? Just read lecture notes?

 

[yvonne_710]

quote from my tutor:
read lecture notes, do tutorial qs again make sure u understand everything, u may can do study guide as well, read the textbook if u dont understand the lecture notes....

 

[Sarah168]

hahaha that study guide is a joke

textbook is just confusing (actually, this may be due to my lack of capacity to integrate textbook explanations with dennis' intuition )

 

[xiao1985]

kekeke tha'ts why never read text books...
dennis's explaination's very clear enuf by itself =)

past paper can help i believe... tho some q might be irrelavant this yr... i mean u won't improve much after doing the same tute q's 3 times in a row would u now?! =p

 

[yvonne_710]

kekeke tha'ts why never read text books...
dennis's explaination's very clear enuf by itself =)

past paper can help i believe... tho some q might be irrelavant this yr... i mean u won't improve much after doing the same tute q's 3 times in a row would u now?! =p

coz i tried to ask past paper qs, and then my tutor said "wasting time" to me..

 

[Sarah168]

Sicne when are tutor's words a mandate? Just do what you think will improve your grasp of the concepts...

 

[yvonne_710]

Sicne when are tutor's words a mandate? Just do what you think will improve your grasp of the concepts...

in fact, i found past paper is quite hard............i am so scared about econ final MC now..........

 

[Sarah168]

being scared + worrying + being on BOS and MSN = lots and lots of opportunity costs

 

[yvonne_710]

being scared + worrying + being on BOS and MSN = lots and lots of opportunity costs

........thats a "good "example............. i know that topic and u r really good at econ though~

 

[Sarah168]

ha. u should see my mid sem marks then

ok, gonna go back to the world of ATC's and AVC's and marginal costs pricing and dominant strategies now

 

[xiao1985]

@ sarah: lolz yeh, but think of the MB, and maybe u end up being a gainer?! ok enough bos'ing for one nite...
got an exam due in 20 hrs... better study =(

 

[Rorix]

From last year's paper:

"Suppose there is a negative externality in production resulting in a constant perunit external cost"

Which of my diagrams is correct?? 1 or 2?

Diagram 2.

 

[Sarah168]

@ sarah: lolz yeh, but think of the MB, and maybe u end up being a gainer?! ok enough bos'ing for one nite...
got an exam due in 20 hrs... better study =(

i still dont know what MB is.....

 

[ToO LaZy ^*]

marginal benefit?