GAZDASÁGI ISMERETEK ANGOL NYELVEN

Transcription

1 ÉRETTSÉGI VIZSGA május 27. GAZDASÁGI ISMERETEK ANGOL NYELVEN EMELT SZINTŰ ÍRÁSBELI VIZSGA május :00 Az írásbeli vizsga időtartama: 180 perc Pótlapok száma Tisztázati Piszkozati EMBERI ERŐFORRÁSOK MINISZTÉRIUMA Gazdasági ismeretek angol nyelven írásbeli vizsga 1212

2 Important Dear Examinee, The examination consists of four parts. Part I consists of multiple choice questions. In this part of the examination choose only the answer you think is the correct one. Unclear answers, or more than one answer will not be awarded points. Part II consists of true-false questions. Write either T (true) or F (false) next to the answer to indicate your choice. Attention, you are required to explain your answers. (Correct answers with an appropriate explanation: 1+1 point; correct answers with inappropriate explanation or no explanation: 1+0 points; incorrect answers: 0+0 points). Part III requires you to write short answers to the questions. Your answers should be a maximum of three or four sentences. Part IV requires you to make calculations and solve geometry problems. We suggest that when you are preparing your diagrams you use a pencil. However, your final answer must be written in ink. Use a ruler in order to produce accurate drawings. Providing answers to calculations is not enough, you must show the formula you use on the answer sheet. (You are not required to show every attempted calculation, or multiple possible answers, we only require you to show the steps leading to the final answer). Each part may contain tasks in the fields of micro-economics, macro-economics and international economics. Pay close attention to the instructions. Try to provide an answer for each question asked. The points attainable are listed in each section. Partial scores are possible. Maximum points available for a perfect score: 90. Rulers and calculators may be used to solve the set tasks. If the space provided is not sufficient to solve the task the blank pages at the end of the test paper may be used. Should you require more you may ask the invigilator for an official sheet. However, this must be registered on the task sheet next to the question. Good luck. írásbeli vizsga / május 27.

3 Part 1 Multiple Choice 9 2 = 18 points Enter the answer you think best and only that answer in the box provided. 1. If production costs decrease due to new procedures for a product being sold in a perfect economy, then A) the product's equilibrium price does not change as the producer's profits would decrease if they were to decrease sales prices. B) the product's equilibrium price increases as demand increases. C) the product's equilibrium price decreases due to increases supply. D) the product's equilibrium price decreases due to decreases in supply. 2. There are a few major players in the motor industry. On the basis of this choose the term that best describes this sector A) a monopoly B) an oligopoly C) a perfect competition D) none of the above. 3. Let's assume that the flour market is a perfect competition. If the market price of flour increases, then A) supply will increase in the short term as new players enter the milling industry B) supply will decrease as flour mills achieve pre-price increase profits with lower production quantities C) supply does not change as flour mills profits increase even with unchanged production quantities D) supply increases over the short term since with increased production flour mills achieve higher profits than with unchanged production quantities. 4. Unregulated monopolies incur dead-weight loss because A) profit maximizing monopoly prices surpass marginal cost. B) the monopoly's profit is equal to decreased consumer surplus that ensued due to monopolization C) the monopoly is only interested in maximising profits instead of meeting needs D) it can set prices as it sees fit. 5. Innovations have positive external effects because A) the innovator's income increases due to innovation. B) consumer welfare improves due to the introduction of new products or the reduction in the price of existing products. C) implementing innovations often incurs great costs. D) some people gain utility increases from innovations that they do not pay for. írásbeli vizsga / május 27.

4 6. If a country's imports surpass their exports, then A) the gross national product will be lower than the gross domestic product. B) the country's leaders are obviously following flawed economic policy. C) income used domestically surpasses the produced income. D) the gross domestic product will decrease in the following term. 7. The following activities increase the GDP and the GNI by the same amount: A) foreign capital achieves profits in domestic production units. B) domestic capital achieves profits in foreign production units. C) domestic labour temporarily works abroad. D) domestic labour works domestically. 8. If we know that in a macro-economy the consumption function is linear and that household income is units, then the consumption value is units. If household income is units, then the value of savings is units. Based on the above in this economy: A) the marginal propensity to consume is 0.8. B) the marginal propensity to consume is C) the marginal propensity to consume is 0.9. D) the marginal propensity to consume matches none of the above. 9. In a three-player, closed macro-economy aggregate demands increase if: A) households curtail spending out of prudence. B) in the interest of reducing the budget deficit the government increases taxes. C) companies are more optimistic about business possibilities, hence they intend to increase their capital stock. D) labour fights for improved nominal wages. 18 points Part II True or False, with Explanations 9 2 = 18 points Write either T (true) or F (false) in the box provided. Attention, you are required to explain your answers. 1. Let's assume that only the price of product X increases, while the prices for all other products and consumer income remains unchanged. Hence demand for X product decreases while demand for all other products increases. írásbeli vizsga / május 27.

5 2. If a consumer always spends 3000 HUF per month on cinnamon rolls regardless of the price then this is termed unit-price elasticity 3. If a company increases output in the short term, then it is certain that its average cost, average variable cost and average fixed cost will decrease. 4. In a perfect competition over the long term a company can achieve only zero profit. 5. If the nominal GDP of a country is higher one year than the previous year, then the real GDP is also higher compared to the previous year. írásbeli vizsga / május 27.

6 6. There is a national economy in which a law stipulates that nominal wages shall always increase to match rises in price levels regardless of unemployment levels. Therefore, in this macro-economy, increase to aggregate demand, ceteris paribus, always increases price levels only, but never real output. 7. A person of working age, who is capable and willing to engage in paid employment yet does not find a job is statistically part of the inactive population. 8. If in a closed economy interest rates increase due to the central bank's policy of decreasing the amount of money in circulation, then, with all other factors unchanged, this decreases the aggregate demand of the macro-economy. 9. If the government strives to decrease budget deficit by lowering taxes and curtailing government spending, they will also lower unemployment. 18 points írásbeli vizsga / május 27.

7 PART III SHORT ANSWERS Your answers should be a maximum of three or four sentences. 4 3 = 12 points 1. Let's suppose that there is perfect competition for potatoes and fresh fish on the market, and furthermore that the demand for potatoes is inelastic while that of fresh fish is elastic. In addition to the above let's assume that during the period examined the supply of both products is independent of the price and due to high yields and large catches the supply of both products increases by 20 percent. How do prices change for these products and which price changes the most? Explain. 2. A perfectly competitive firm produces fishing boats. The following sequences shows the marginal costs according to daily production: 1, HUF; 2, HUF; 3, HUF; 4, HUF; 5, HUF. Furthermore, we know that the company's fixed costs per day amount to HUF, and that the market price for a fishing boat is HUF/unit. How many boats does the company produce per day and what is their profit or loss per day? 3. Explain the difference between gross and net investment. 4. What are the main factors involved in foreign currency demand? How do price increases affect foreign currency demand? Explain. 12 points írásbeli vizsga / május 27.

8 PART IV CALCULATIONS AND GEOMETRY PROBLEMS 42 Points We suggest you use a pencil when working out your answers. However your final answers must be in ink. Use a ruler in order to produce accurate diagrams. Providing answers to calculations is not enough, you must show the formula you use on the answer sheet. 1. Frugal Frank is a profit maximizing consumer who only consumes two types of foodstuff: bread (B) and meat (M). We know the following about his food-purchasing: Frank spends I = HUF per month on foodstuff. The marginal utility function for meat is MU M = 2 000/M, where M is the amount of meat purchased per month in kilogrammes. The function used to calculate the marginal utility curve of bread is MU B = 1 000/B, where B is the amount of bread purchased per month in kilogrammes. The market price for meat is P M = HUF/kg, for bread it is P B = 200 HUF/kg a) How much meat does Frank purchase for each kilogramme of bread at the given market price? b) Provide Frank's budget line equation. c) How many kilogrammes of bread and meat does Frank consume per month using the given budget line? Let's assume that the government decrees that too much meat consumption is unhealthy and therefore levies an excise tax on meat sales. Accordingly, the market price increases to P M '=1 250 HUF/kg. At the same time the government intends to compensate meat consumers for their real income losses, so, they pay each consumer an amount equal to the pre-tax meat consumption multiplied by the price increase. d) Provide the equation for Frank's changed budget line equation. (We assume that Frank spends the entire compensation from the government on these two foodstuffs). e) How much meat and bread does Frank consume following these changes? írásbeli vizsga / május 27.

9 a) b) c) d) e) Total points írásbeli vizsga / május 27.

10 2. In a small town the local waterworks is the sole provider of drinking water, that is, they are a monopoly. We know the following about the company's operations and water consumption: There are a total of 5000 households that consume drinking water. The total demand can be characterized by the function P = Q, where P is the consumer price of water per cubic metre, and Q is the quantity of water consumed per day. The function used for the marginal revenue curve of the above demand curve is MR = Q. The function used to calculate the waterworks total cost is TC = 150Q so by increasing the amount of water supplied by one cubic metre the waterworks total cost always increases by 150 HUF. The waterworks is owned by the local government, so any profits are paid to the city's budget and any loss is compensated by the local government. The waterworks is obliged by the local government to supply all consumers and to continue to provide services despite possible losses. a) Let's suppose that at first there is no regulated price for water and that the waterworks sets the consumer price to maximizing profit. What will the consumer price of water and the quantity of daily water consumption be? How much will the waterworks pay into the local government's treasury, and how much will the local government compensate the waterworks to cover losses? b) The local government decides to regulate prices in the interest of the consumers and sets the consumer price for water to the level of the waterworks marginal cost. With this regulation what will the consumer price for water and the daily quantity of water consumed be? How much will the waterworks pay into the local government treasury and how much will the local government pay to cover losses by the waterworks? c) The local government decides that the waterworks compensation is sufficient and decides to set the consumer price in accordance with the waterworks' average cost. What will the consumer price for water and the quantity of water consumed daily be? d) Smart Sam, a young economist at the local government, has a solution whereby consumers only have to pay the optimal marginal social cost for each cubic metre of water they consume, and the local government will not have to compensate the waterworks. Sam suggests implementing dual pricing. This means that the consumers will have to pay the appropriate price for each cubic metre of drinking water according to marginal cost, while at the same time they have to pay a fixed basic fee which is independent of the quantity of water consumed and which the waterworks can use to cover their losses. If Sam's plan is approved what will the basic fee for a household be if the total basic fee collected just barely covers the losses incurred by the waterworks marginal costs pricing? írásbeli vizsga / május 27.

11 a) b) c) d) Total points írásbeli vizsga / május 27.

12 3. We have the following data and correlations about a three-player closed economy: In the current conditions the economic members in the private sector would like to save 20 percent of their income. Independent of income consumption is zero. Investment is characterised by the function I = i. The central bank regulates the quantity of money such that the interest rate is 6 percent: i = 6. The amount of government purchases is G = Tax revenues are independent of income and their total is T = 1500 (there are no other taxes and transfers). The government's short run production is characterised by the function Y = 1000 L where L is the number of employed persons. The active number of the population in an economy is: L A = 500. a) Determine the extent of investment, equilibrium income and private consumption. b) How many employed and unemployed persons are there if there is currently equilibrium in the macro-economy? Let's suppose that the players in the private sector are expecting a decline in the economic situation and so have decided to save a greater portion of their income than previously and with the current interest rate they wish to invest less. c) Without making calculations decide how the given variables will be affected, choosing from the options provided, and indicate your choice in the table. Variable Real income Equilibrium value increases/decreases/no change Consumption Employment Unemployment írásbeli vizsga / május 27.

13 a) b) c) Total points írásbeli vizsga / május 27.

14 4. The diagram below shows the aggregate demand and aggregate supply curve for an open four- player economy. In this economy nominal wages have been set and the exchange rate is floating. a) Indicate the equilibrium income and equilibrium price level on the diagram. Let's suppose that investors sense that the risks involved in domestically issued stocks are increasing, which would result in capital outflow, thus leading to a devaluation of the domestic currency on the currency market. Let's also assume that real investments do not change over the short term. We know too that the domestic economy is importing large amounts of raw materials and energy sources in addition to consumer and investment assets for final end-use, with the result that devaluation affects production costs. b) Indicate on the diagram the effect of currency devaluation on the aggregate supply and aggregate demand curves. Explain the shift of the curves. Indicate the new equilibrium price level. c) Describe how currency devaluation affects foreign trade balance and real wages. Explain. P Y S 1 Y D 1 0 Y írásbeli vizsga / május 27.

15 a) b) c) Total points írásbeli vizsga / május 27.

16 Maximum points Multiple Choice 18 True-False 18 Short answers 12 Calculations, diagrams 42 Score for the written examination 90 Points Correcting Teacher Date:... pontszáma egész számra kerekítve/ Score rounded off to a whole number programba bevitt egész pontszám/ Whole number score entered into programme Feladatsor/task javító tanár/correcting Teacher jegyző/notary Dátum/Date:... Dátum/Date:... írásbeli vizsga / május 27.