JV 714 University of Stirling Supply & Demand Exam Answers This is an Open Book exam, so you may do research online if you have time, but if we detect work

JV 714 University of Stirling Supply & Demand Exam Answers This is an Open Book exam, so you may do research online if you have time, but if we detect work which is not your own you may be deducted marks. There are 100 marks for this paper, 50 marks for the Short Answer Questions and 50 marks for the Essay.You should spend roughly 90 minutes on Section A and 90 minutes on Section B. Module Code
JV714/JV808
Module Title
Economics
Percentage of Final Grade
25%
Exam Code
JV714/JV808
Date
Thursday, 28 May 2020
Time
09.00 – 12.00
Duration
3 hours
Student Number:
Instructions
1. This is an Open Book exam, so you may do research online if you
have time, but if we detect work which is not your own you may
be deducted marks.
2. There are 100 marks for this paper, 50 marks for the Short
Answer Questions and 50 marks for the Essay.
3. You should spend roughly 90 minutes on Section A and 90
minutes on Section B.
4. Answer all questions in this document and save it with your
Student ID number as the filename.
Page 1 of 4
Part A: Short Answer Questions
(Each question is worth 5 marks)
1. Draw a detailed Supply & Demand diagram and explain possible reasons for
–
a. A shift in the Demand curve
b. A movement along the Demand curve
c. An inward shift to the left of the Supply curve
(5 marks)
2. Describe the key characteristics of a Perfectly Competitive Market, and
explain why this type of market does not exist in the real world.
(5 marks)
3. Name 1 internal and 1 external Economy of Scale and provide a real life
example of how they benefit a company’s operations.
(5 marks)
4. According to the concept of Allocative Efficiency, what would an
entrepreneur do if their leather products suddenly became unfashionable?
(5 marks)
5. Explain the 4 stages of the Business Cycle and analyse their effect on the
economy.
(5 marks)
Page 2 of 4
6. Name 2 types of Unemployment and describe their impact on the economy.
(5 marks)
7. Is Fiscal Policy a Supply-side or a Demand-side set of policies? How are
they used to guide the economy?
(5 marks)
8. Why do older people tend to prefer high Interest Rates, and businesses tend
to prefer low Interest Rates? Use examples to illustrate your answer.
(5 marks)
9. What is the most common measure of Inflation in the UK called? How is it
calculated?
(5 marks)
10. How can Monetary Policy be used to increase output during a recession?
Use examples of more than one type of policy.
(5 marks)
Page 3 of 4
Part B: Essay Question
(ONLY ANSWER ONE QUESTION – the question is worth 50 marks)
Question 1
(a) Explain the three economic questions that all economies face
because of the basic economic problem.
[20 marks]
(b) Discuss the importance of price in the effective operation of a
mixed economy.
[30 marks]
OR
Question 2
(a)
Explain the market failure which arises from the characteristics of
public goods.
[20 marks]
(b)
Discuss whether economists would classify healthcare and national
defence in the same way.
[30 marks]
End of Paper
Page 4 of 4

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