Ollscoil na hÉireann, Gaillimh
National University of Ireland, Galway
Semester 1 Examinations 2008/2009
2nd B.A. (Economic & Social Studies)
Techniques of Analysis
Professor Robert Wright
Professor Eamon O’Shea
Mr. Stephen McNena
There are two sections in this exam. Please answer any 6
questions from section A and 6 questions from section B.
No. of Pages
6 pages, including this cover sheet
Breda Lally, St. Angela’s College, Sligo
Handout of formulae to be distributed at St. Angela’s
Yes, to be distributed at St. Angela’s College, Sligo
Yes, if students request it
Log Graph Paper
SECTION A MATHS
Answer any 6 of the 8 questions. 15 minutes per question.
1. (a) Consider the demand function represented by the equation: Qd = 50 – 5P
(i) Express Total Revenue (TR) as a function of Qd.
(ii) What is the slope of the demand curve? What is the value of its intercept?
(iii) Sketch the demand curve.
(iv) At P = 6, calculate the quantity and the total revenue.
(b) Consider the following production function: Y = A f (K, L) = 10AK0.5L0.5
where Y is national output, A is technological knowledge, K is the capital stock,
and L is labour.
Transform this Cobb-Douglas production function into a linear model using
2. (a) A firm that makes paint sells their product for €7. Their cost function is
represented by the equation: TC = 200 + 5Q.
(i) Calculate the breakeven quantity.
(ii) Determine the Total Revenue, Fixed Cost, Variable Cost and Total Costs.
(iii) Sketch the Total Cost and Total Revenue curves.
(b) Consider the following demand and supply equations:
Demand: P = 100 – 3Q
Supply: P = 10 + 2Q
(i) Solve for the equilibrium price and quantity.
(ii) What are the slopes of the two curves?
3. Consider an open economy described by the following equations:
C = 300 + 0.9Yd Govt spending = 600
I (autonomous) = 400 Tax rate = 20% of incomes
Exports = 800 Imports = 27.5% of disposable income
Note that C, Y and M are endogenous, and I, G, t and X are exogenous constants.
(a) Solve for the equilibrium national income, Y.
(b) Then calculate disposable income, consumption and imports.
(c) Determine the Marginal Propensity to Consume and the Marginal Propensity to
(d) Calculate the expenditure multiplier.
(e) If an injection of extra autonomous expenditure causes national income to rise by
400, calculate the size of the extra expenditure.