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Microeconomic Analysis ECON7073 Reading Time: Fifteen Minutes. Writing Time: Three Hours. Scanning and Submission Time: Thirty Minutes. Permitted Materials: This is an “open book” exam. There are no restrictions on the materials that may be used while undertaking this exam.. Page 1 of 11 – Microeconomic Analysis (ECON7073) Instructions 1. This exam is worth sixty percent of your raw overall mark for this course. 2. The exam consists of four questions, each of which is worth twenty-five marks. As such, there are a total of one-hundred marks available on this exam. 3. An indication of the allocation of marks within each question is provided within the exam. 4. Note that, in general, most of the marks for any part of any question will be allocated to the quality, relevance, and accuracy of the supporting explanation and analysis that you provide in your answer, rather than to the accuracy of the precise answer itself. (One implication of this is that a correct final answer that is accompanied by insufficient supporting material might receive a very low mark.) This will be the case regardless of whether or not it is explicitly indicated within the question itself. 5. You have three hours and forty-five minutes in which to complete this exam and submit it, unless the University has approved an alternative arrangement. This consists of fifteen minutes of reading time, three hours of writing time, and thirty minutes of “document scanning and submission” time. Please note that writing is not permitted during both the reading time and the “document scanning and submission” time. Writing is only permitted during the writing time. 6. Your answers must be handwritten. They must not be typed. You are free to use either “paper and pen (or pencil)”, “tablet and stylus”, or any other technology that allows you to handwrite your solutions. 7. Please attempt as many questions as you can in the allotted time for this exam. 8. Please start your answer to each question on a new page and indicate which question is being answered at the top of the page. Where relevant, please indicate the part of a question that is being answered within your answer to each question. 9. Please sort all of your answers into the same order as the corresponding questions appear on the exam question paper. Where relevant, please sort all of your answers to parts of a question into the same order as the corresponding parts appear within that question on the exam question paper. 10. Please submit a digital file containing a copy of your answers to the exam before the expiration of the allotted three hours and forty-five minutes for this exam. The exam must be submitted no later than 6:15 pm on Wednesday 9 November 2022 (Canberra, ACT, Australia Time) unless an alternative arrangement has been approved by the University. No late exams will be accepted. This applies even if the exam answers are submitted only a tiny bit late. 11. Please submit your answers to the exam by using either the Turnitin link provided on the Wattle site for this course or, if you are unwilling or unable to use Turnitin, Page 2 of 11 – Microeconomic Analysis (ECON7073) by email to [email protected]. Any exam that is not submitted using at least one of these two methods might well be missed and, as a result, be considered not to have been submitted. In particular, please do not submit your exam to any email address other that the one provided above. 12. Please note that if you are unwilling or unable to use Turnitin, you must provide copies of all reference material that you use during the exam if you are requested to do so before the release of final results for this course. 13. Please note that this exam will be invigilated over Zoom. You must enter the Zoom meeting for this exam before accessing the exam question paper. You must remain in the Zoom meeting for this exam from the point at which you enter it until some point in time after you have submitted your exam answers. You must be visible on a web-camera for the entire time that you are in the Zoom meeting for the exam. No exam answers that are submitted after you leave the Zoom meeting for the exam will be accepted. 14. A link for the Zoom meeting for this exam will be provided in the “Assessment Items 3: Final Exam” block on the Wattle site for this course. The exam Zoom meeting will open no later than 2:25 pm on the day of the exam, in order to allow you to join it before the start of the exam. This is five minutes before the exam questions paper will become available (at 2:30 pm on the day of the exam). 15. The exam questions paper and the Turnitin submission link for the exam will also be provided in the “Assessment Items 3: Final Exam” block on the Wattle site for this course. 16. The timing for the components of the exam is as follows. The exam Zoom meeting will open no later that 2:25 pm on the day of the exam. The exam questions paper will become available, and reading time will commence, at 2:30 pm on the day of the exam. Reading time will end and writing time will commence at 2:45 pm on the day of the exam. Writing time will end and “document scanning and submission” time will begin at 5:45 pm on the day of the exam. Document scanning and submission time, and the exam Zoom meeting, will not end before the earlier of 6:15 pm on the day of the exam and the time at which the last of the students that attempt the exam leaves the exam Zoom meeting. Document scanning and submission time will end no later than 6:15 pm on the day of the exam. Hopefully, the exam Zoom meeting will end no later than 6:20 pm on the day of the exam. 17. Good luck! Page 3 of 11 – Microeconomic Analysis (ECON7073) Question 1 (25 marks) 1. Consider a perfectly competitive industry that is initially in a position of long-run competitive equilibrium. All of the firms in this industry are identical, and each of them produces exactly seven units of output in the initial long-run competitive equilibrium. Suppose that this this industry is hit with a demand shock. Assume that the industry as a whole is a constant cost industry, both before and after the shock.1 Some points on the short-run total cost schedule facing one of the firms in this industry immediately after the demand shock has occurred is provided in the table below.