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S1 2017
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 ECON1000 Exam
Students, S1 2017

Time Allowed: 2 hours + 10 mins

Note: Students who fail to attend an end of semester exam
because they misread the timetable or accept incorrect
information on the timetable from another person, are not
entitled to sit the examination at another time.
 Remember:
No ID – No Exam

• If you do not have your ID card you will not be

permitted entry to the examination venue.

• If you are found to be in possession of a mobile

phone or any other device (other than an
approved calculator) capable of storing text or
restricted information you will be subject to a
fine of $200.

• You may not leave the venue within the first hour
or the last 15 minutes of the examination.
 ECON1000 S1 2017 –
Assessments:

i. Mid-Sem Test (MST) – out of 20

ii. Essay (Assignment) – out of 20
iii. Quiz 1 & Quiz 2 – out of 5 marks each
– marks have all been uploaded onto Grade Center.
• Check out your results on Bb, so you know where you’re at
before you sit the exam.
• If a column in Grade Center is blank, it means you did not sit or
submit that particular assessment.

• Final Exam – out of 50

Do I have to pass the exam?

– To pass Introductory Economics you must

receive an overall grade of 5 or above, i.e.
an overall mark greater than or equal to 50.
 ECON1000 S1 2017 Exam Format:
2 Sections
• Section A: Multiple Choice
– 18 Multiple Choice questions: 18 marks
• Suggestion: do Section A first, spend up to 30 minutes

Topics covered in Section A:

 L5. Externalities, Public Goods & Common Resources,
Asymmetric Information [Chapter 5]
 L6. Introduction to Macroeconomics: GDP,
Unemployment & Inflation. [Chapter 6]
 L7. Aggregate Demand & Aggregate Supply. [Chapter 7]
 L8. Monetary Policy. [Chapter 8]
 L9. Fiscal Policy. [Chapter 9]
 L10. Exchange Rates. [Chapter 10]
 Section A [Exchange Rates]

A decrease in the value of the Australian

dollar will tend to cause, other things the
same, ________.
A. a decrease in the volume of Australian exports
and imports.
B. an increase in the volume of Australian exports
and imports.
C. a decrease in the volume of Australian exports.
D. a decrease in the volume of Australian imports.
 Section A [Monetary and Fiscal Policy]

Which of the following economic policies would

deliver the most immediate expansionary effect
on the level of economic activity?
A. increasing government spending and raising
taxes, and lowering interest rates.
B. reducing the budget surplus, and decreasing
interest rates.
C. lowering taxes and increasing government
spending, and increasing interest rates.
D. increasing the budget surplus and increasing
interest rates.
 Section A [AD/AS Model]

Which of the following would cause the

short-run aggregate supply curve (SRAS) in
Australia to shift to the right?
A. An unexpected decrease in the price of oil.
B. More workers leave Australia to seek out better
opportunities in another country than new
workers arriving into Australia.
C. An increase in the price level.
D. An increase in net exports.
 Section A [Unemployment]

The unemployment rate may be a misleading

indicator of actual unemployment because
A. part-time workers are not counted as employed.
B. some part-time workers may want to work full-time.
C. unemployed youth workers are not counted as
unemployed.
D. the unemployment rate moves with a lag to changes
in the business cycle.
 Section A [Common Resources]

In which of the following cases does the tragedy

of the commons occur?
I. Raising salmon on salmon farms.
II. Catching crayfish off the North-West coast of Australia.
III. Cattle grazing on private ranches.
IV. Using legal services provided by the courts.

A. I and II.
B. I and III.
C. II only.
D. III and IV.
 Section A [… Other MCQs]

There are plenty of multiple choice questions (MCQs) available

for further practice!
1. See PowerPoint lecture slides & i-Lectures on Bb for
sample MCQs on each lecture module (L5 to L10).

2. I have uploaded on Bb several past final examination

papers:
• Six (6) past final exam papers (ECON1000 is previously known as
‘Economics 100’): S1 2011, S1 2012, S1 2013, S2 2013, S1
2014, as well an ECON1000 paper from S1 2015.
• Two (2) made-up past final examination papers.
• All past final exam papers have answers to the MCQs.
[Solutions to the short answer sections are not available.]

3. Some student sample past answers to the written section

are provided in this review lecture ;-)
 ECON1000 S1 2017 Exam Format:
2 Sections (Cont.)

• Section B – ‘Short Answer Style’

Written Questions
– Answer ANY 2 from a choice of 4
– Each question is worth 16 marks
– Total of 32 marks
 Section B. Four (4) Questions with Topic
divisions in ECON1000 Final Exam, S1 2017

BEHAVIOURIAL ECONOMICS AND ASYMMETRIC

INFORMATION
L5. Behavioural Economics and Asymmetric Information - Ch 5

GDP, UNEMPLOYMENT AND FISCAL POLICY

L6. Introduction to Macroeconomics: GDP, Unemployment & Inflation - Ch 6
L9. Fiscal Policy - Ch 9

EXCHANGE RATES: AUSTRALIAN DOLLAR (AUD)

L10. Exchange Rates - Ch 10

MONETARY POLICY
L8. Monetary Policy - Ch 8

Note: The topics ‘GDP, UNEMPLOYMENT AND FISCAL POLICY’ and ‘MONETARY POLICY’ will
require a suitable AD/AS diagram (from L7. Aggregate Demand & Aggregate Supply -
Ch 7) to explain and illustrate the relevant concept(s).
 ECON1000 S1 2017 Section B,
Exam format
 Answer Two (2) out of Four (4) questions:
 Each question is worth 16 marks.
 Use diagrams where appropriate.

 Spend 40-45 minutes on each question in Section B.

 Use your time wisely.
 Pay attention to the allocation of marks for each part of the question.

 You should aim to write at least 2-3 good

sentences per mark allocated.

 In some part questions you should be able to include a diagram –

make sure you refer to it in your answer.
 Exam Revision
Revising the course:

• In each topic there are KEY DEFINITIONS and

DIAGRAMS

• Practice drawing and explaining basic diagrams

• Lectures: PowerPoint Slides and i-Lectures (if missed

or couldn’t attend live lecture) are the best sources.
– Revisit key learning objectives for each lecture topic.
 Exam Revision
When writing your answers (in section B):
• Read the question carefully
• Pay attention to key verbs in the question, e.g.:
– ‘explain’  make the concept or idea clear by describing it in more detail
– ‘discuss’  write about (a topic) in detail, taking into account different issues or ideas
– ‘draw’ or ‘use a model to…’  use a relevant diagram in your answer

• Answer each part of the question

– briefly define the key concepts in the question;
– include simple real-world examples to demonstrate understanding
– use well-labeled diagrams (where relevant) to illustrate the meaning of
concepts (this is critical!)

• Write more rather than less – elaborate on your answer by

explaining. Answering the question is the key!
– In the examination, you should specifically answer each question; anything
included which is not specifically asked for will receive no marks.
 Exam Revision

Common mistakes made by students:

1. answer less/more than required no. of questions

2. do not answer all parts of each question

3. do not answer the question, rather, write anything

they know about the topic!

4. do not include diagrams with answer

5. include diagrams yet do not explain them and no

labelling!
 Section B. Key Points:
Introduction to Macroeconomics:
GDP, Unemployment & Inflation [L6. Ch.6]

• What is GDP?
– How do you measure real GDP?
– Limitations of GDP as a measure of welfare

• Unemployment & Inflation

– Unemployment
• Measurement, types, costs

– Inflation
• Measurement, types, costs
Section B. Sample (part of a) Question and 3 Answers
[How is GDP measured? L6. Ch.6]
 Section B. Sample (part of a) Question and 3 Answers
[How is unemployment measured? What is a problem of measuring the
unemployment rate? L6. Ch.6]
 Section B. Key Points: Basic AD/AS Model [L7. Ch.7]

• What is AD and AS?

• What are the factors that can cause a shift in the

relevant curves (AD, SRAS, LRAS)?

• Use the basic AD/AS model to show an economy

producing above or below potential output level.

• How can govt. policy help the economy achieve

potential output level if the economy is away from it?
 Section B. Key Points: Monetary Policy [L8. Ch.8]

• What is the role of Central Banks (especially the goals

and objectives of the Reserve Bank of Australia)?

• The cash rate & the money market.

• How does monetary policy affect the components of AD?

• Expansionary & contractionary monetary policy.

• Effectiveness of monetary policy (interest rate targeting).

Section B. Sample (parts of) Answers
[Monetary Policy, L8. Ch.8]
Section B. Sample (parts of) Answers
[Monetary Policy, L8. Ch.8]
 Section B. Key Points: Fiscal Policy [L9. Ch.9]

• What is fiscal policy?

• Automatic stabilisers vs. discretionary policy.

• How does expansionary/contractionary fiscal

policy affect AD?
– via the multiplier process

• What are the limits and strengths of fiscal policy?

• When does government spending enhance (“crowd in”)
or “crowd out” private business investment?
• Is it really that necessary to maintain a budget surplus
all (or most) of the time?
 Section B. Key Points: Exchange Rates [L10. Ch.10]

• What are the specific demand and supply factors

that determine the exchange rate for the Australian
Dollar (AUD) relative to say the US Dollar?
– Think about the trend of the AUD in recent years.

• What are the possible effects of a depreciation (or

appreciation) of the AUD on the Australian
economy?
– Explain the impact of a high (or low) Australian dollar on each
of the following particular markets: exports; imports;
domestic producers; domestic consumers; and so on?
 Section B. Key Points: Behavioural Economics and
Asymmetric Information [L5. Ch.5]

Behavioural Economics
– How does behavioural economics differ to traditional economics?
– What are some examples of choice decisions under behavioural economics?

Externalities
– What are the different types of externalities?
– What is the difference between a negative & positive externality? [note: no
need to illustrate using an externality diagram in the ECON1000 exam]
– Why does the market fail?

Public goods // Common Resources

– non-rival & non-excludable // rival & non-excludable
– the free rider problem // the tragedy of the commons

Asymmetric Information in car, insurance or financial

(credit) markets (the exam question could be on AI in general or on
AI for a specific market)
– Adverse Selection
• definition
• examples
– Moral Hazard
• definition
• examples
Section B. Sample (parts of) Answers
[Behavioural Economics, L5. Ch.5]
 Section B. Sample (parts of) Questions and Answers
[Common Resources, L5. Ch.5]
Score:
0/3

What
mark?
3/3
Section B. Sample (parts of) Questions and Answers
[Asymmetric Information, L5. Ch.5]
Section B. Sample (parts of) Questions and Answers
[Asymmetric Information, L5. Ch.5]
 Totes of Wins in your S1 2017

ECON1000 exam & life in general! ;-)