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# Azonost jel:

## GAZDASGI ISMERETEK ANGOL NYELVEN

EMELT SZINT RSBELI VIZSGA
2011. mjus 23. 14:00
Az rsbeli vizsga idtartama: 180 perc

## Gazdasgi ismeretek angol nyelven emelt szint

Azonost jel:

Important information

Dear Examinee,
The examination consists of four parts. Part I contains multiple choice questions. In this part of the examination choose only the answer you think is the correct one. Unclear, 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 have to explain your answers.(Correct answers with an appropriate explanations: 1+1 point; correct answers with inappropriate explanations or no explanation: 1+0 points; incorrect answer: 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 graphs you use a pencil, however, your final answer must be written in pen. Use a ruler in order to create precise drawings! Providing answers to calculations is not enough, you must show the formula you use on the answer sheet. (Of course, we do not need you to show every trial calculations, or multiple possible answers, we only need you to show the steps leading to the final answer!) All parts 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 is 90. Rulers and calculators may be used to solve the set tasks. If the space provided is not sufficient to solve the task you may ask the supervising staff for an official sheet, however, this must be indicated on the task sheet next to the question! Good luck!

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Azonost jel:

## PART I, MULTIPLE CHOICE QUESTIONS

(9 2 = 18 points)

1. Let's say that pizza is a substitute for hamburgers, while French fries complement hamburgers. This means that if the price of hamburgers increases, then ceteris paribus A) demand for pizza and French fries both decreases. B) demand for pizza increases, and demand for French fries decrease. C) demand for pizza decreases and demand for French fries increases. D) demand for pizza and French fries both increase. 2. If due to general decreases in income demand for cheap paperback books increases, while demand for more expensive hardcover books decreases, then A) demand for paperback books is elastic while we call hardback books strict demand goods. B) demand for paperback books is strict while we call hardback books elastic demand good. C) paperback books are inferior while we call hardback books normal goods. D) Paperback books are normal, while we call hardback books inferior goods. 3. Gbor spends his allowance on books and movies. If the prices of both products go up by 5% due to in creases in value added tax, then Gbor's budget line A) becomes steeper. B) levels out. C) expand toward the origin. D) expand outward from the origin. 4. What happens to the equilibrium price and quantity of computers if production costs decrease ceteris paribus? A) The equilibrium price increases, while quantity decreases. B) The equilibrium price decreases, while the quantity increases. C) The equilibrium price and quantity both decrease. D) The equilibrium price and quantity both increase. 5. The manager of a printing company noticed, starting from his current labor and capital usage that he can replace two workers with a machine without any changes to production quality. Monthly rental of the machine costs 400 thousand HUF while the monthly cost of the workers is (wages+taxes) 280 thousand HUF. Based on this in addition to unchanged production the company's costs can decrease A) by decreasing the use of labor and capital. B) by increasing the use of labor and capital. C) by increasing the use of labor and decreasing that of capital D) by decreasing the use of labor and increasing that of capital. 6. Wages earned by workers in the country. A) are part of the GDP, but not part of the GNI. B) are not part of the GDP, but are part of the GNI. C) part of both the GDP and the GNI. D) are neither part of GDP nor the GNI.

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## Gazdasgi ismeretek angol nyelven emelt szint

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7. In a two-player economy in addition to a given yield level the planned degree of consumption is C = 12 000, the planned savings value is S = 3 000, the planned investment value is I = 4 000. According to this on a given market A) there is an over supply. B) there is an over demand. C) there is equilibrium. D) any of the above is possible. 8. In addition to a given level of prices in a three member economy aggregated demand is decreased by A) increased taxes. B) increased government transfers. C) increased government spending. D) increased value of planned investment. 9. Let's say, that in an economy nominal wages are set in long term contracts and, in addition to the value of current real wages labor supply surpasses labor demand. Then small increases to price levels A) increase unemployment. B) decrease unemployment. C) has no affect on unemployment. D) any of the above.

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PART II, TRUE-FALSE QUESTIONS, WITH EXPLANATIONS. Write either T (true) or F (false) next to the answer to indicate your choice. Attention, you have to explain your answers! Correct answers with an appropriate explanation: 1+1 point; corrects answer with inappropriate explanation or no explanation: 1+0 points; incorrect answers: 0+0 points.) (9 2 = 18 points) 1. If a consumer currently ties up his income in products x and y so that MUx/Px > MUy/Py , then his utility can increase if he increases consumption of product x to the detriment of product y.

## 2. The marginal utility of air is zero in the case of optimal consumption.

3. If Peter and Paul always consume a bottle of apple juice together at lunch, then for them the apple juice is common good.

4. If they produce 10 units of wheat or 5 units of rye in Hungary in a single work day and in Germany they can produce 16 units of wheat and 10 units of rye, then Hungary has a comparative advantage in wheat production over Germany.

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5. If the government increases household taxes and transfers paid out to households at the same time and by the same amount then as a result consumption will increase.

6. If the labor force secures increases in nominal wages without increases in productivity then price levels rise because of this while equilibrium out decrease.

7. In a three player economy raising interest rates leads to a down turn in equilibrium revenue because government spending decreases.

8. In addition to domestic and foreign price level devaluation of domestic currency increase the export of goods and decreases the import of goods.

9. Over the short term a monopoly surely does not produce, if the market price related to the production quantity determined by the equilibrium of marginal revenue and marginal cost is smaller than the average cost related to the same production quantity.

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PART III REQUIRES YOU TO WRITE SHORT ANSWERS TO THE QUESTIONS. Your answers should be a maximum of three or four sentences! (4 3 = 12 points) 1. Mike Magnet consumes only products x and y. We know that his current income and prevailing product prices the budget line equation y = 100 4x. Determine the maximum of y or x products that Mike can consume if he spends his income on only one or the other product, and provide the Px / Py ratio for the two product's prices!

2. Let's say, that a perfectly competitive firm generates significant economic profit at the low point of a short run average cost curve. Based on this information does the firm produce at profit maximization or should they increase or possibly even decrease production? Explain your answer!

3. In a two party economy consumers always spend 80% of the current real wages (autonomous consumption is zero). There are only supplementary investments and every year 10% of capital stock is exchanged. The long run equilibrium value of capital stock is K = 1000 units. Provide the equilibrium income and consumption value!

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Azonost jel:

## PART IV CALCULATIONS AND GEOMETRY TASKS:

(42 points)

1. In a competitive sector N companies operate. Cost functions are the same for each company. The formula for short run marginal costs for one company is MC = 0.4q + 50, the equation for short run total cost curve is TC = 0.2q2 + 50q + 10 000. The product's short run equilibrium price is p = 300. The market demand curve is D = 30 000 37.5 x p. a) How much does a company produce and what is its profit? b) What is the total output of the sector and how many companies operate in the sector? c) How does the number of companies, product price and company profit change over time. Provide the direction of the changes! (There is no need to give a numerical answer.) 4 + 4 + 3 = 11 points

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2. Profit maximizing Golden Wrench Ltd assembles automotive engines for a large automobile maker. They receive the parts from the factory and they deliver the assembled engines to the factory. They receive a fixed price of 500 Euro for one assembled engine. The equation showing the correlation between Ltd. production and labor used, if other factors are given and unchanged is Q = 90L 4L2. The marginal product-function equation for this is: MPL = 90 80L. Wages (labor cost per unit) at the Ltd is a given PL = 1 000 Euro. In addition to the above we know that that Ltd uses 100 000 Euro stock capital on rental fees, and property rent is 50 000 Euro. The company has no other costs. a) Provide the equation for the value of marginal product (VMP) curve. b) Determine how many units of labor the Ltd uses and how many engines are assembled. c) Determine the Ltd's profit. d) Let's say that the authorities are carrying out an on-site inspection of the Ltd and they determine that the Ltd's production process is polluting the environment. Therefore, they order that a certain percentage of the proceeds henceforth be paid as an environmental protection fee. Without calculations determine how the fee will affect how the amount of labor and output of the Ltd! 2 + 4 + 2 + 3 = 11 points

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3. The graph below shows an aggregate demand-aggregate supply curve of a three member (closed) economy. Nominal wages have been recorded in the economy. Let's say that the starting position shown in the graph the central bank purchases a large amount of stock on the open market. P

YS

P1

0
a) b)

Y1

Show on the graph how the economic equilibrium changes as a result of interference by the central bank. In the table below indicate whether the variable equilibrium value in question has decreased or remained unchanged as a result of the central bank's interference. Variable Value increased/decreased/unchanged

Real money (M/P) Interest rate (i) Investment (I) Consumption (C) Real wages (w/P) Unemployment (U) 4 + 6 = 10 points

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4. We know the following data and relationships about a three player economy: Consumer function equation: C = 500 + 0.75(Y T). Investment function equation: I = 5000 200i. Government spending value: G = 2500. Value of taxes: T = 1600 (no other taxes or transfers). The money and goods market P = 2 price level is in equilibrium. Real wage function equation: MD = 0.25Y 100i. Nominal money supply value: MS = 10 000.

a) Based on the above determine the equilibrium income and the equilibrium interest rates! b) Determine the value of consumption and investment. c) Let's say, that the government increases taxes to decrease budget deficit. Without making calculations list, as a result of increased taxes, in addition to unchanged price levels in which direction do the following change: equilibrium income, equilibrium interest rate, consumption and investment value. 4 + 2 + 4 = 10 pont

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Maximum points Multiple Choice True-false Short answer Calculation, graphs Score for the written examination
18 18 12 42 90

Points

Correcting Teacher

Date: .................................................

__________________________________________________________________________

programba bevitt pontszma egsz egsz szmra kerektve pontszm / Whole / Score rounded

## off to whole number

Feladatsor / Task

jegyz / Notary

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