KÖZGAZDASÁGI ALAPISMERETEK (ELMÉLETI GAZDASÁGTAN) ANGOL NYELVEN

ÉRETTSÉGI VIZSGA 2015. május 19. KÖZGAZDASÁGI ALAPISMERETEK (ELMÉLETI GAZDASÁGTAN) ANGOL NYELVEN EMELT SZINTŰ ÍRÁSBELI VIZSGA 2015. május 19. 8:00 Az írásbeli vizsga időtartama: 180 perc Pótlapok száma Tisztázati Piszkozati EMBERI ERŐFORRÁSOK MINISZTÉRIUMA Közgazdasági alapismeretek (elméleti gazdaságtan) angol nyelven emelt szint írásbeli vizsga 1411

Important Information The test sheet is complex, broken down into sections according to the different types of questions. When working out the solution, please take into account the additional information in italic font. Please follow the instructions when answering the questions. Maximum score will only be given, if all subsections of the question have been answered. Solutions and elaborations should be written on the test sheet. All drafts should be written on the additional pages provided. If the answer requires additional pages, please indicate this next to the relevant question. Pencils may be used to draw diagrams, the final solution, however; has to be finalised in pen. Please use a ruler to draw precise diagrams. You may only use non-programmable calculators during the written examination. Good luck with your examination! írásbeli vizsga 1411 2 / 20 2015. május 19.

I. Test questions Multiple choice questions (6 2 = 12 points) We have provided 4 possible answers that correctly complete the statements below, but only one of these answers is correct. The other answers are either partially correct or completely wrong. Choose the letter corresponding to the correct answer and write it into the table below, into the field corresponding to the given question number. Attention! Only one answer will be accepted. No points will be awarded for multiple or unclear answers. 1. 2. 3. 4. 5. 6. 1) The price of product x increases. As a result, the demand curve of product y shifts to the left. All other factors remain unchanged. This means it is certainly true that a) product y is an inferior good. b) products x and y are substitute products for one another. c) product x is a normal good. d) products x and y are complementary products for one another. 2) If two goods of positive utility substitute each other perfectly for a given consumer s taste, the indifference map a) is made up of negatively sloping lines that are parallel to each other. b) is made up of lines that are at right angles to each other. c) is made up exclusively of vertical lines. d) is made up exclusively of horizontal lines. 3) If the net present value of a capital factor is positive, it is expedient for the company to buy the capital factor in question. a) False, because this means that the internal rate of return is greater than the market rate of return. b) False, as it is only worth buying if the net present value is negative. c) True, because in this case the internal rate of return of the capital factor is lower than the market interest rate. d) True, because in this case the present value of returns is greater than the capital s initial cost. 4) Marginal propensity to consume a) shows what part of the income increment is spent on consumption. b) shows what part of the income is consumed. c) can be greater than one in the Keynesian model. d) is always lower than the marginal propensity to save. írásbeli vizsga 1411 3 / 20 2015. május 19.

5) In the case of all incomes that are lower than Y e,, a) there is oversupply on the commodity market. b) there is equilibrium on the commodity market. c) there is excess demand on the commodity market. d) the market s status cannot be determined based on this information. 6) Select the expansive monetary policy tool from the list below. a) Decreasing of minimum margin requirement. b) Increasing of rediscount rate. c) Increasing of refinancing rate. d) Sale of securities. írásbeli vizsga 1411 4 / 20 2015. május 19.

II. Written (long-answer) questions 1. True-False statements (6 3 = 18 points) Decide whether the statements below are true or false. Please indicate your decision by writing the letters T (true) or F (false) in front of the statements. Unclear markings or crossed out letters will not be accepted. ATTENTION! ALL ANSWERS HAVE TO BE EXPLAINED. Indication of the letter in itself will not be awarded any points; we shall only evaluate solutions WITH explanations. All correct explanations are worth 2 points. 1) If as a result of the price increase of a product total revenue increases, the demand of the product in question is price elastic. 3 points 2) If a perfectly competing company sells its product at a price higher than the value of the average fixed cost corresponding to optimal production, the company is certain to be producing profitably. 3 points 3) If a product s market price increases and all other factors remain unchanged, the marginal production factor cost also increases. 3 points 4) If nominal wages decrease, and in parallel, the state applies a demand-stimulating economic policy, then (ceteris paribus) equilibrium macro-income is certain to drop. 3 points 5) There is no unemployment at the equilibrium point of the labour market. 3 points 6) If marginal propensity to import and export both increase, then the current-account balance is certain to improve. 3 points írásbeli vizsga 1411 5 / 20 2015. május 19.

2. Pairing up (5 points) Complete the following table based on the correlations you have learned. Place the correct text in each line and determine the current relation between the two highlighted functions. The following question analyses the relationships between the production function, the marginal product function and the average product function. First, you must characterise the progression of the function examined within the range specified in the table; then, you must determine the relation between the marginal product and average product functions. In order to characterise the progression of the function, use the POSSIBLE ANSWERS templates, but only one of these can be used per line. Select the correct answer and write the corresponding letter into the table. In the lines where this is required, complete the incomplete formula with the correct relational operator (>, =, <). POSSIBLE ANSWERS: A) increases at an accelerating rate B) increases at a decelerating rate C) increases D) decreases E) maximal F) minimal G) zero Question number 2.1. 2.2. 2.3. Name of function to examine marginal product function production function average product function Selection of range from inflection point - to technical maximum from inflection point - to tangential point technical optimum of the variable factor Characterisation of the progression of function Relation characterising relationship of MP L AP L functions (>, or <, or =) MP L MP L xxxxx AP L AP L írásbeli vizsga 1411 6 / 20 2015. május 19.

3. Complete the table (4 points) The formulas used to describe the fundamental processes of a three-sector macro-economy can also be used to write up other correlations. Determine the method of calculation of the given categories using the data known. When writing up the formula, you can only use the letters and markings featured in the given category s line; but it is possible that there may be more letters and markings in a line than what is needed to determine the formula. When writing down the correlations, you should assume the following to be true: Y = C + I + G TR C = 0 T C + T H = T Question number Data known To be calculated Method of calculation Example C 0, ĉ, Y savings function = C 0 + (1- ĉ) Y 3.1. Y, T, TR discretionary income of the private sector = 3.2. S H, S C, I, T, G balance of the budget = 3.3. C 0, ĉ, Y consumption rate = 3.4. ĉ, ŝ, T, Y tax multiplier (lumpsum) = írásbeli vizsga 1411 7 / 20 2015. május 19.

4. Comparison (6 points) The diagrams are related to the same economic category; however, they illustrate different correlations and impacts. You have to recognise, name and characterise these relationships based on the aspects indicated. Below, you will have to analyse various consumer behaviours and will have to determine the reasons behind the change in consumer decision illustrated on the various diagrams, and describe the consequences the change presented will have. The statements featured in the table describe possible explanations and correlations, and all of them can be linked to one of the diagrams. Your task is to find the diagram illustrating the correlation featured in the table and write the number of the given diagram into the empty column of the table. írásbeli vizsga 1411 8 / 20 2015. május 19.

Question number Statement Which diagram is it illustrated on? example The consumer s income increased Diagram 2 4.1. After the change in price of good x, the consumer spends the same amount on purchasing good y as prior to the price change. 4.2. For the consumer, good x is of a prestige nature. 4.3. 4.4. The cross-price elasticity of good y concerning the price of good x is equal to zero. The demand of good x is price elastic; at a lower price, the consumer spends more on good x than prior to the price change. 4.5. Good x is an inferior good. 4.6. In the examined range, the demand function of good x is positively sloping, and the changes in the quantity in demand and price have the same direction. írásbeli vizsga 1411 9 / 20 2015. május 19.

5. Analysis and evaluation question (7 points) Fill in the incomplete table based on the data contained in the analysis and the known correlations between the indicators that characterise the performance of the national economy. The following table provides information on Hungary s national accounts for the 2010-2012 period. We have deleted the values in some of the cells, and replaced them with letters. The analysis below the table either features the missing value accurately or provides new information on the original data. There are three cases where the analysis features a figure determined by way of calculation from the original table. In these three cases, revert the calculated data featured in the analysis back into its original form and enter this data into the table. We would like to draw your attention to the fact that the text also contains information that is not featured in the table. The data have positive or negative values; as usual the positive sign need not be indicated, but you have to indicate the negative sign in each case. Year Hungary s gross domestic product and gross national income in 2010-2012 Gross domestic product Labour incomes Received from rest of the world Payable to rest of the world Balance Received from rest of the world Payable to rest of the world Property incomes Balance Of this Reinvested earnings Due from rest of the world Payable to rest of the world at current prices, HUF billion Balance Tax paid to EU Subsidies received from EU Gross national income GNI growth rate, volumeindex, previous year = 100.0 2010 26513 434 221 213 3316 5027-1711 1904 1307 597 67 311 25259 100.7 2011 27635 444 232 212 2345 4337-1993 694 684 10 70 399 26184 101.0 2012 A 470 236 B 2432 4518 C 1197 1239 D E 409 F G (Source: Hungary s national accounts, 2012 (preliminary data) http://www.ksh.hu/docs/hun/xftp/idoszaki/gdpev/gdpevelo12.pdf 13old.) Analysis: Gross national income was HUF 26 542 billion at current prices in 2012, which was 1.8% lower in real terms than in the previous year. The value of GNI was 94.63% of GDP in 2012... The balance of property income received from and paid to the rest of the world reduced GNI by HUF 2086 billion in 2012. Among the items of property income, interest paid to the rest of the world increased by HUF 130 billion, while interest received from the rest of the world hardly changed in 2012. The balance of dividends, another component of property income, reduced GNI by HUF 1084 billion, and both dividends received from and paid to the rest of the world decreased (by 46.6% and by 24.4% respectively) compared to the previous year. The balance of reinvested earnings, the third component of property income, lowered GNI by HUF 42 billion in 2012, compared to an increase of HUF 10 billion in the previous year. Among the items of transition from GDP to GNI, the balance of employee income and írásbeli vizsga 1411 10 / 20 2015. május 19.

the balance of taxes paid to the EU and subsidies received from the EU raised GNI, the former by HUF 234 billion and the latter by HUF 346 billion. (Source: Hungary s national accounts, 2012 (preliminary data) http://www.ksh.hu/docs/hun/xftp/idoszaki/gdpev/gdpevelo12.pdf 4. old.) Question Fill in the table using the figures and information contained in the text. Write the missing data into the empty fields corresponding to the letters. írásbeli vizsga 1411 11 / 20 2015. május 19.

III. Calculation and plotting questions Follow the instructions indicated for each question carefully: complete the necessary calculations and/or prepare the diagrams according to the given specifications. Mark your answers with the number of the corresponding sub-question. In the case of calculation questions, simply indicating end results is insufficient. You also have to indicate the theoretical foundations of the calculations as well as the formulas applied. Question 6 (2 + 2 + 2 + 6 = 12 points) All we know of demand and supply on a given market is that one can be characterised by the P = 300 2Q function, while the other with the Q = 0.5P 50 function. 6.1. Calculate the price below which producers exit the market. 6.2. What is the reservation price valid along the demand function? 6.3. How large is consumer surplus in case of equilibrium price? The state has decided to support producers. As a result, it subsidises all sales with HUF 50, under the condition that producers express this entire amount in their prices. In addition, there is another change that impacts the market: Due to the changing of consumer habits, the product is less popular than before, therefore, in the case of all prices, consumers consume 10 pieces less of the product than before. 6.4. Calculate how the consumer surplus changes as a result of the above changes. írásbeli vizsga 1411 12 / 20 2015. május 19.

Continuation of Question 6 írásbeli vizsga 1411 13 / 20 2015. május 19.

Question 7 (6 + 6 = 12 points) There is a monopoly in a given industry. The industry s demand function is Q = 5000 0.5P, the company s average cost function can be determined using the equation AC = Q + 400 + 4 000 000 / Q, and marginal cost with the equation MC = 2Q + 400. 7.1. Calculate the profit achievable in case of optimal production by the monopoly. 7.2. What is the welfare loss caused by the fact that there is only one company, in a monopoly position, on the given market, and that the industry is not perfectly competing? (We assume cost functions are identical.) Calculate the deadweight loss caused by the monopoly. írásbeli vizsga 1411 14 / 20 2015. május 19.

Question 8 (6 + 4 + 4 = 14 points) The following information is available about an economy: If macro-income is 1000, consumption is 700. One unit of change of income changes consumption by 6/10th in the same direction. We also know that the investment function of companies can be characterised with the equation I = 500 10i. The balance of the budget is showing a deficit of 200 units. The tax revenue of the state is 200 in the case of all incomes, while the total value of all state transfers is 250. The import function is: IM = 150 + 0.1Y. The foreign trade balance is 200, if income is 5000. 8.1. Write down the equation for commodity market equilibrium income solved for Y as a function of the interest rate. 8.2. Write down the equation for the macro-demand function, if we know that the function describing money market equilibrium can be characterised by the equation Y = 40i + 1800/P. 8.3. Calculate equilibrium interest rate and income if we know that the price level is 2. írásbeli vizsga 1411 16 / 20 2015. május 19.

Question 9 (4 + 6 = 10 points) The following information is available about a macro-economy: The labour demand function is: = Labour supply is fixed in the case of all real wages, and is equal to the number of the active population. We know that if real wage is 5, the unemployment rate is 36%. 9.1. Determine labour supply. 9.2. Write down the equation for the employment function as a function of real wage. írásbeli vizsga 1411 18 / 20 2015. május 19.

írásbeli vizsga 1411 19 / 20 2015. május 19.

Topic Test questions Written (longanswer) questions Calculation and Plotting Questions Question number Maximum points Maximum points of topic Multiple choice questions 1 6 12 12 1. True-false statements 18 2. Pairing up 5 3. Complete the table 4 4. Comparison 6 40 5. Analysis and evaluation question 7 Question 6 12 Question 7 12 Question 8 14 48 Question 9 10 in written examination 100 in topic Correcting teacher Date:... Választásos, egyszerű rövid választ igénylő feladatok/ Test Questions Szöveges (kifejtendő) feladatok/ Written (long-answer) questions Számítást, ábrázolást igénylő feladatok/ Calculation and Plotting Questions pontszáma egész számra kerekítve/ rounded to a whole number programba beírt egész pontszám / (whole number) entered into programme javító tanár/correcting teacher jegyző/notary Dátum/Date:... Dátum/Date:... írásbeli vizsga 1411 20 / 20 2015. május 19.