ECON1010 Introductory Economics 2021
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Introductory Economics, ECON1010
Tuesday, 11 May 2021, 14:00 to Wednesday, 12 May 2021, 14:00
Exam duration: 1 hour
Please include your course code (as above), your student ID, and the number of the question that you have attempted on your answer.
How to complete this exam:
Students should answer ONE question.
Instructions to students:
Read the exam student guidance onMoodle.
For this exam, the required number of questions is ONE.
1. Advice on the contents of the exam and technical support
If you have questions about the contents of this paper, or you require technical assistance, please contact our virtual invigilation team at the University of Glasgow Helpdeskhttps://www.gla.ac.uk/help or on +44 (0)141 330 4800.
Questions relating to the contents of the paper should be raised within the first 3 hours of the assessment period, when an academic member of staff will be available to answer these. Technical support will be available 24 hours per day. To ensure timely responses, and that all students receive the same information, you should not contact academic staff directly but instead use the Helpdesk.
2. You are about to sit an online assessment
You have a 24-hour period in which to take and complete this exam. 24 hours is NOT the length of the exam.
It should take you no longer than ONE HOUR to complete this exam unless you are entitled to time adjustments (see Section 3. below), or you experience unavoidable disruption; and you should pay specific attention to guidance provided on the exam paper regarding the total word count.
You should be able to complete the exam in the time indicated and are unlikely to derive major benefits from taking longer. Note that spending longer often leads to muddled answers which do not receive high grades. It is better to answer in a clear and concise fashion within the time limit given.
3. Time adjustments for students with disabilities
If you have in the past been granted adjustments to your exam time, e.g. through the University’s Disability Service or at School or College, allowance is made for these since you have a 24-hour period in which to complete this exam.
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6. Submitting your answers
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Acceptable file types for submitting high resolution images are: JPG; PNG; TIF; PDF.
• Please check that you have uploaded the CORRECT FILE, that it is readable and is the version that you want to be marked; if you use a word-processing package other than Word, you are advised to convert and upload as a pdf.
• Lastly please ensure you upload files to the correct course Moodle assignment.
• Submit (at least) one file per question. You may submit up to 20 files. Subquestions may be submitted in one file according to question.
• Use the following naming convention: StudentID_CourseCode_QuestionNumber (e.g. 1234567_MGT1001_1). DO NOT include your name
• This exam has been configured to allow submission of answers for two hours beyond the scheduled exam time. Submissions made during this two-hour period will be treated as ‘late’ and will be graded ‘H’ .
7. Declaration of Academic Integrity
The following information is very important – your degree may be at risk if you do not adhere to these instructions:
• You must not communicate with any other person about these examination questions during the period in which you can submit your answers
• You must follow any instructions on your examination paper regarding use of resources such as internet sources, books, notes or any other material that would not normally be allowed in examinations on campus .
• The work you submit must be entirely your own effort and must demonstrate your understanding rather than reproduce text from notes, slides, books, or online sources (which is plagiarism)
• You must not submit answers you have discussed with or copied from others, and you must not copy from notes you have prepared with or shared with others. If your answers are similar to those of any other candidate(s) you will both/all be suspected of collusion and referred to Student Conduct
• This declaration incorporates the University’s Declaration of Originality which applies to all academic work (see below).
8. Declaring that the work is your own
Before viewing the exam paper, you must check the box in the Exam Section on the Moodle Course page to agree to both this declaration and the University’s Declaration of Originality.
Solve one of the two following problems.
1. Consider an industry with two firms. If the two firms compete, they both incur losses due to low demand, but if only one firm remains operating it is able to maintain positive economic profits .
a. Create a 2-by-2 game that models the “remain” / “exit” decision by the firms; use models of firm’s costs and quantity/price choice to derive payoffs in this game. Discuss any assumptions that you are making.
b. Find all the Nash equilibria in this game and all the efficient outcomes. Explain your result.
c. Explain the macroeconomic consequences of one of these firm’s exit decision, assuming that the industry is important for the national economy. Describe the stabilization policy that the country’s government and central bank should be adopting in this case.
[100%]
[Maximum word count 2500]
2. Suppose that in some country secondary education is free, but not mandatory. The government provides a policy for poor families who send their children to secondary schools: their children get free meals, free textbooks, free transport, and free uniforms. As the country’s economy is hit by a recession, there are calls to cancel this policy due to its high cost. Use appropriate economic models from this course to discuss the advantages and disadvantages of this policy.
[100%]
[Maximum word count 2500]
2023-03-16