King’s Business School, King’s College London
Open Book limited time release ‘take home’ exam
This paper is part of an examination and counts towards the award of a degree.
Examinations are governed by the College Regulations under the authority of the
Academic Board.
Title of assessment: Period 2 Alternative Assessment –
Take Home Exam
Module code and title: 4QQMB102 Principles of Economics
Examination Period: Period 2, May 2020
Time allowed: 24 HOURS between 10am BST 30/04/20 and 10am BST 01/05/20
INSTRUCTIONS TO CANDIDATES:
1. Complete the details on the cover sheet provided and write your answers to the
questions on the following pages of the cover sheet document.
2. Answer ALL FOUR questions. Each question is worth 25%.
3. The answer to each full question should be no more than 750 words.
Substantially longer answers will only have the first 750 words marked.
4. Although you have up to 24 hours to submit your answers from the time the
exam opens, you should spend no longer than 2 hours on the exam.
5. Label each answer very clearly so that markers can see easily to which question
they belong.
6. Paste the required diagrams & graphs for your answers directly onto the answer
sheet using software or uploaded photos.
7. Save your work regularly, at least every 15 minutes.
ONLINE SUBMISSION INSTRUCTIONS:
1. Your answer sheet should be submitted via the Turnitin submission link titled
‘FINAL ASSESSMENT’ on the module KEATS page.
2. Ensure your document is submitted as CANDIDATE ID – MODULE CODE- i.e.
A12345 4QQMB102
3. Once submitted please check you are satisfied with the uploaded document
via the submission link. If including images, ensure these do not cause the
document to be too large to submit.
4. If you experience technical difficulties uploading your assessment to KEATS
please email a copy to UG-Business@kcl.ac.uk with the subject as
CANDIDATE ID- MODULE CODE- PERIOD 2 ASSESSMENT
2
Question 1 (word limit: 750 words)
a. The owner of a local restaurant comes to you for economic advice. He needs to
know whether or not he should increase the price of the meals he serves. In order
to advise the local restaurant owner, you would require more information. Briefly
discuss the kind of information you would like to know. Use diagrams to explain
how this information can impact on the restaurant’s revenue.
b. Assume that the government decides to set a maximum (low) price for a good.
With the aid of a diagram, discuss two rationing devices that can be used to
resolve the ensuing shortage.
Total marks for Question 1: 100
Continued on next page…/
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Question 2 (word limit: 750 words)
a. Discuss why monopolised markets are unlikely to be in the interests of consumers
and society as a whole.
b. As firms expand,they tend to enjoy certain benefits. Using a well-labelled diagram,
briefly explain how economies of scale may lead to a fall in a firm’s average cost.
Total marks for Question 2: 100
Continued on next page…/
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Question 3 (word limit: 750 words)
a. Nobel laurate Simon Kuznets, who did significant work on national income
accounts in the 1930s, said that the welfare of a nation can scarcely be inferred
from a measurement of national income. Would you agree with him Why or why
not
b. Will the following lead to cost-push inflation or demand-pull inflation, or both
Briefly explain your answers:
i. The Bank of England cuts interest rates and the economy booms.
ii. As a result of falling unemployment, trade unions become more militant and
demand higher wages.
iii. The government raises the rate of VAT.
Total marks for Question 3: 100
Continued on next page…/
Question 4 (word limit: 750 words)
a. To reduce the hardship that the unemployed workers suffer, a government decides
to improve unemployment benefits, such as extending eligibility for
unemployment insurance. Would you say it is a good or a bad policy, and why
Explain your answer with the aid of a graph.
b. Suppose that the US and Chile are the only two countries in the world, and that
labour is the only productive input. In the US, a worker can produce 15 bushels of
corn or 10 barrels of oil per day. In Chile, a worker can produce 5 bushels of corn or
5 barrels of oil per day.
i. Which country has the absolute advantage in the production of oil Of corn
Explain.
ii. Explain in words what comparative advantage means. Which country has
the comparative advantage in the production of oil Of corn
iii. If free trade is allowed, which commodity will the US import Which
commodity will Chile import Explain.
Total marks for Question 4: 100
FINAL PAGE
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