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Ollscoil na hÉireann, Gaillimh _GX______ National University of Ireland, Galway Summer Examinations, 2009/ Exam Code(s) 1BC2, 1BC3, 1BC4, 1BC5, 1BF1, 1FM Exam(s) 1 st^ Comm. (French), 1st^ Comm. (German), 1 st^ Comm. (Spanish), 1 st Comm. (Italian), 1 st B.Sc. (BIS), 1 st B.Sc. (Fin. Maths. & Ec) Module Code(s) EC Module(s) Economics Paper No. 1 Repeat Paper External Examiner(s) Professor Robert Wright; Professor Cillian Ryan Internal Examiner(s) Professor John McHale Professor Michael Keane Professor Terrence McDonough Instructions: (^) Please follow instructions carefully. Please answer both Section A ( 3 0 marks) in your answer book, and Section B (40 marks) on MCQ answer sheet. Duration 3 hrs. No. of Answer books 1 Course Coordinators Department(s) M. Keane & T. McDonough Economics Requirements : Handout MCQ Yes Statistical Tables Graph Paper Log Graph Paper Other Material
SECTION A : Answer any three questions. Each question is worth 10 points
- Farmer McDonald gives music lessons for €20 an hour. One day he spends 10 hours planting €100 worth of seeds on his farm. What opportunity cost has he incurred? What cost would his accountant measure? If these seeds will yield €200 worth of crops, does McDonald earn an accounting profit? Does he earn an economic profit?
- Define the price elasticity of supply. Explain why the price elasticity of supply might be different in the long‐run from in the short run.
- Consider the data on the market for apples as follows: Price = 90¢ 80¢ 70¢ 60¢ 50¢ 40¢ 30¢ Qdemanded = 1 2 3 4 5 6 8 Qsupplied = 8 7 7 6 5 4 3 Find the equilibrium quantity and price. Suppose that an excise tax of 40¢ is imposed on apples, raising the price paid by consumers to 70¢ and lowering the price paid by producers to 30¢. Compared to the market equilibrium without the tax calculate the following a. the loss in consumer surplus b. the loss in producer surplus c. the government revenue from this tax d. the deadweight loss of the tax
- How does the price faced by a profit‐maximising competitive firm compare to its marginal cost? Explain. When does a profit‐maximising competitive firm decide to shut down? When does a profit‐maximising competitive firm decide to exit a market?
SECTION B: Macroeconomics 2010 Commerce
- Individuals are the important actors in which school of economics? a. Neoclassical b. Marxian c. Institutional d. Post Keynesian
- Choice is a behavior associated with a. individuals. b. classes. c. institutions. d. economists.
- In the lecture McDonough argued the relationship between theory and facts is a. dialectical. b. overdetermined. c. tenuous. d. none of the above.
- A set of rules about how the world works plus a set of rules of investigation is a a. institutionalism b. conservative position c. paradigm d. textbook example
- Price is to neoclassical theory what ______ is to Marxian theory. a. class b. profit c. exploitation d. wage labour
- A class society is most precisely one in which a. inequalities exist. b. one group earns more money than another. c. discrimination is practiced. d. one group lives off the labour of another group.
The standard of living of the working class is the a. depreciation. b. necessary product. c. surplus product. d. GDP.
Wage labour characterizes a. communism. b. slavery. c. feudalism. d. capitalism.
If we take wage goods out of the net domestic product (NDP), what’s left is a. depreciation. b. profits. c. wage bads. d. gross domestic product.
In the circular flow households supply what to firms? a. factors of production b. factor incomes c. goods and services d. imports and exports
What circulated in the Phillips machine? a. income b. goods and services c. oil d. water
Transfers is an injection which compensates for a. savings. b. direct taxes. c. exports. d. imports.
- In the Keynesian model consumption depends primarily on a. custom. b. income. c. utility. d. individual preferences. C = 20 + 7/8 GDP I = 80 G = 100 X = 30 M = 1/8 GDP
- What is the equilibrium level of income in this model? a. 920 b. 1840 c. 230 d. 460
- Suppose autonomous consumption rises by 10. The new equilibrium will be a. 960 b. 40 c. 950 c. 1920
- Calculate the multiplier for this model. a. 4 b. 8 c. 7 d. 10
- Using the original equilibrium, suppose the full employment level of income is 1040. The government should increase government spending to a. 110 b. 130 c. 140 d. 180
- The government can lower the interest rate by a. decreasing the supply of money. b. increasing the supply of money. c. increasing the demand for money. d. none of the above.
- In the Marxian theory of unemployment, expansion results in a. rising wages and falling profits. b. rising wages and rising profits. c. falling wages and rising profits. d. falling wages and falling profits.
- Inflation creates a. uncertainty. b. menu costs. c. problems for business planning. d. all of the above.
- Notes plus coins plus current accounts equal a. M1. b. M2. c. M3. d. M
- Which of the following does not help explain why the aggregate demand curve slopes down? a. Wealth effect b. Expectations effect c. Interest rate effect d. International trade effect 2 9. The quantity theory of money says a. increases in the money supply result in increases in price. b. increases in price result in increases in the money supply. c. increases in the money supply are balanced by decreases in velocity. d. increases in the money supply result in increases in quantity of output.
The speculator searches for opportunities to a. realize a large income stream. b. invest for the long term. c. buy low and sell high. d. improve business management.
Which of the following is not tracked in the current account balance? a. merchandise trade b. patents and copyrights c. services d. current transfers 3 8. IMF structural adjustment programmes include all of these except a. removal of trade restrictions. b. allowing wages to rise c. restricting the growth of the money supply. d.privatizing state industry
Ecological economics argues that between capital forms there is a. limited substitutability. b. perfect substitutability. c. a simple system of property rights. d. an equality of well-being outcomes.
Potential contradictions within global neoliberalism included all of the following except a. insufficient aggregate demand b. rising unit labour costs c. financial and monetary fragility d. environmental crises
