EXCELCENTRE LEARNING INSTITUTE 061 043 9805
PU E
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NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
should not be rendered accountable since the contents in this document only give
learners a kick-start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE EVERY DETAIL IN THIS
DOCUMENT IN WRITING THEIR ASSIGNMENT
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Managerial Economics
Revision Solutions to Past Examination Papers
Prepared as a study aid for exam revision. Model answers cover the key theory,
diagrams, and application points examiners typically reward. Use these to check your
own worked answers and understanding — write your own answers in full exam
conditions for the best revision effect.
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Paper 1 — Broadband Price Elasticity (LAC) & Macro Topics
SECTION A — Broadband Article (Galperin & Ruzzier)
Question 1 (20 marks): Determinants of broadband adoption & rollout challenges in
Latin America
Key determinants of adoption:
● Price of the service — the article's central finding is that broadband demand in
LAC is price-elastic (unlike the OECD), so retail price is a major determinant.
A 10% price cut is estimated to raise penetration by ~22% (≈8.5 million extra
connections).
● Income levels (GDPCAP) — higher GDP per capita markets show higher
penetration; affordability is a binding constraint in poorer LAC economies.
● Quality of service — LAC services are described as expensive and of poor
quality relative to OECD benchmarks, which deters adoption even where price
is not the only issue.
● Level of competition — a 'deficit of competition' in fixed broadband markets
keeps prices high and quality low; more competitors would be expected to
lower price and lift adoption.
● Education (EDUC) — human capital affects the ability/willingness to use and
value broadband services.
● Urban/rural and infrastructure gaps — LAC is heterogeneous, and
infrastructure rollout costs are higher in dispersed/rural populations.
Rollout challenges (critical evaluation):
● Because demand is elastic to price but not fully price-driven, the article notes
that price cuts alone will not be 'sufficient to achieve the penetration goals set
in national broadband plans' — complementary demand-side policies
(education, digital literacy, local content) are also needed.
● Significant variance between LAC markets means a one-size-fits-all national
policy is unlikely to work; some countries (e.g. Brazil, used as the illustrative
example) need targeted interventions.
Education is the most powerful weapon which you can use to change the world
PU E
S HI
NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
should not be rendered accountable since the contents in this document only give
learners a kick-start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE EVERY DETAIL IN THIS
DOCUMENT IN WRITING THEIR ASSIGNMENT
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Managerial Economics
Revision Solutions to Past Examination Papers
Prepared as a study aid for exam revision. Model answers cover the key theory,
diagrams, and application points examiners typically reward. Use these to check your
own worked answers and understanding — write your own answers in full exam
conditions for the best revision effect.
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Paper 1 — Broadband Price Elasticity (LAC) & Macro Topics
SECTION A — Broadband Article (Galperin & Ruzzier)
Question 1 (20 marks): Determinants of broadband adoption & rollout challenges in
Latin America
Key determinants of adoption:
● Price of the service — the article's central finding is that broadband demand in
LAC is price-elastic (unlike the OECD), so retail price is a major determinant.
A 10% price cut is estimated to raise penetration by ~22% (≈8.5 million extra
connections).
● Income levels (GDPCAP) — higher GDP per capita markets show higher
penetration; affordability is a binding constraint in poorer LAC economies.
● Quality of service — LAC services are described as expensive and of poor
quality relative to OECD benchmarks, which deters adoption even where price
is not the only issue.
● Level of competition — a 'deficit of competition' in fixed broadband markets
keeps prices high and quality low; more competitors would be expected to
lower price and lift adoption.
● Education (EDUC) — human capital affects the ability/willingness to use and
value broadband services.
● Urban/rural and infrastructure gaps — LAC is heterogeneous, and
infrastructure rollout costs are higher in dispersed/rural populations.
Rollout challenges (critical evaluation):
● Because demand is elastic to price but not fully price-driven, the article notes
that price cuts alone will not be 'sufficient to achieve the penetration goals set
in national broadband plans' — complementary demand-side policies
(education, digital literacy, local content) are also needed.
● Significant variance between LAC markets means a one-size-fits-all national
policy is unlikely to work; some countries (e.g. Brazil, used as the illustrative
example) need targeted interventions.
Education is the most powerful weapon which you can use to change the world
