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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.