WECO1020 Term 6 2020 Final Exam PDF

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Download WECO1020 Term 6 2020 Final Exam PDF

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MACQUARIE UNIVERSITY INTERNATIONAL COLLEGE FORMAL EXAMINATION PERIOD: TERM 6, 2020 Unit Code:

WECO1020

Unit Name:

Principles of Economics 1

Duration of Exam

2 (two) hours plus 10 (ten) minutes reading time plus 30 (thirty) minutes for downloading/printing, scanning, and uploading answer file

(including reading time if applicable):

Total No. of Questions: Total No. of Pages

5 questions Four (4) pages

(including this cover sheet):

GENERAL INSTRUCTIONS TO STUDENTS: • • • • • •

Macquarie University operates under a ‘Fit to Sit’ model. This means that by downloading the exam paper, a student declares themselves fit to do so. The due time will not be extended in case a student downloads an exam paper later than the start time specified for an exam. Students are required to follow the instructions provided to them by their teacher, a Senior Teacher, on iLearn or in the relevant assessment task documents. Students must refrain from communicating in any way with another student or other third parties during the examination. Students are responsible for maintaining academic integrity during assessments by abiding by Macquarie University's Student Code of Conduct and Academic Integrity Policy. If it is alleged a student has breached these rules at any time during the examination, the matter may be reported to a University Discipline Committee for determination.

A 10-minute Zoom session will be available during the reading time at the start of this exam. If you have any queries regarding the instructions or questions in the exam paper, you can “Zoom in” and talk to a Teacher/Senior Teacher. This zoom session link will be available above the examination link on iLearn on the day/time of your exam. Any further questions after the 10-minute period cannot be answered. INSTRUCTIONS 1. This examination must be completed, and your answer file uploaded to the Final Exam submission link provided on iLearn within the time stipulated. Late submissions will NOT be accepted. Recommended time allocation: •

10 minutes reading time

•

2 hours to complete the assessment

•

30 minutes for downloading/printing and uploading your answer document to iLearn

2. This paper consists of the following sections: Question

Type of Question

1

short answer

2

short answer

Unit Content Examined

Marks Allocated 9 marks 9 marks

Questions may be on any content covered in this unit.

3

short answer

4

short answer

9 marks

5

short answer

9 marks

Exam TOTAL

5 questions

45 marks

9 marks

3. Attempt all questions. 4. To complete this exam, use your own paper to handwrite your answers. You must clearly label each part of the question you are answering. Typed answers will NOT be accepted and will be awarded zero marks. 5. No marks will be awarded for unlabelled or illegible work. 6. All diagrams must be hand-drawn. No marks will be awarded for diagrams that are copied and pasted from lesson notes, other texts, the internet, or any other source.

7. Use a scanner (or scanner app**) to create ONE pdf or Microsoft Word (.doc or .docx) file containing all your answers. ** Use a free scanning app, such as: •

Camscanner

•

Microsoft Office Lens

•

Adobe Scan

These are examples of apps that allow you to take photos of your pages using your mobile phone’s camera and combine them together into a single pdf document. 8. Submit your answer document by uploading it to the submission link provided on iLearn BEFORE the deadline. You can only upload ONE file containing all your answers to this link. The only accepted file types for upload are: •

Microsoft Word® (.doc and .docx)

•

pdf

No other file types will be accepted. 9. Verify that your submission to the submission link on iLearn was successful. •

Re-open the submission link and check that your submission can be opened and viewed, and that you have uploaded the correct file.

•

It is your responsibility to ensure that you submit the correct file.

•

If you submit the wrong file you will NOT be given the opportunity to resubmit after the exam deadline.

•

It is your responsibility to ensure that you submit to the correct submission link.

•

If you submit to the wrong link you will NOT be given the opportunity to resubmit after the exam deadline.

• You can resubmit your file until the exam deadline. 10. Failure to upload your answers BEFORE the deadline will result in a zero mark being awarded for this task. Late submissions will NOT be accepted.

SUBMISSION TROUBLE-SHOOTING If you experience any difficulties during submission, refer to the following table for a solution. Note that in all instances, your EMAIL must be received BEFORE the exam deadline.

Potential Problem:

What to do:

Experiencing difficulties with the submission because of a technical or internet error.

You must follow ALL these steps:

AIDS AND MATERIALS PERMITTED: This is an open book examination. Calculators are permitted.

1. Take a screenshot of the error message that is displayed (make sure it includes a time and date stamp). 2.

Using your Macquarie University email address send an email to Carin Hurwitz ([email protected]) advising her of the problem. You must attach the screenshot AND your answer file to this email.

3.

Your EMAIL must be received BEFORE the exam deadline.

HANDWRITE YOUR ANSWERS TO ALL QUESTIONS. Answer all questions. All questions are worth 9 marks each. The sub-parts for each question are worth 3 marks each.

Question 1 (a) Assume that the rice market is competitive (i.e., there are many buyers and sellers). Using the supply and demand model illustrate equilibrium in the market for rice. Explain whether the equilibrium achieved in the market is Pareto efficient. (b) How would a drought affect the equilibrium price and quantity in the market for rice? Include a diagram in your explanation. (c) Suppose that all rice producers join forces to form a monopoly. Explain the impact of this on the equilibrium price and quantity compared to the outcome under perfect competition from part (a). Explain whether the equilibrium achieved in the monopoly market is Pareto efficient.

Question 2 (a) A firm’s profit maximisation problem can be depicted two different ways. Briefly explain these two methods in your own words and illustrate them on a diagram. (b) How is price elasticity related to profit? Explain with the aid of a diagram. (c) “In the final goods and services market consumers are not willing to pay more than the equilibrium price.” Briefly explain whether you agree or disagree with this statement and why.

Question 3 (a) Why are contracts between firms and their employees incomplete? If piece-rates solve the issue why are they not used more widely? (b) Firm are generally unable to directly measure the level of effort of their workers. How do firms overcome this issue? (c) Numerous pharmaceutical companies are currently developing vaccines for COVID-19. Governments around the world, including Australia, have entered into contracts with these companies for the prospective supply of these vaccines. Explain who is the principal, who is the agent, and what aspects of their interaction are of interest to each and are not covered by a complete contract.

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Question 4 (a) How does a firm decide the number of employees to hire? Explain with the aid of a diagram. (b) Explain why there will always be some unemployment when the labour market is in equilibrium. (c) If an economy has low aggregate demand with high unemployment, explain how the economy could automatically adjust back to equilibrium? Would this occur in reality? Justify your answer.

Question 5 (a) What is inequality? Briefly explain the different types of inequality. (b) Does inequality necessarily suggest unfairness? Explain. (c) Explain two possible solutions to overcome inequality.

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