Exam Name: Advanced Economic Analysis
Date: March 25, 2026
Duration: 2 hours
Total Score: 100
Instructions:
1. Answer all questions.
2. Show all your work and calculations for the calculation questions.
3. Indicate the correct option for the multiple-choice questions.
4. You may use a calculator and one-page formula sheet.
5. Please write your name and student ID number on the cover page.
Question 1: (10 points)
Multiple Choice
In the context of microeconomic theory, which of the following statements is true?
a) A perfectly competitive market has a large number of buyers and sellers.
b) A monopolistically competitive market has identical products.
c) An oligopolistic market has a large number of sellers.
d) A monopoly market has a horizontal demand curve.
Answer: a
Question 2: (10 points)
Solution
In macroeconomic theory, what is the difference between real GDP and nominal GDP?
Explain using an example.
Answer: Real GDP is adjusted for inflation, while nominal GDP is not. For example, if the
nominal GDP of a country is $100 billion in 2019 and the inflation rate is 2%, then the real
GDP would be $98 billion.
Question 3: (10 points)
Calculation
In the context of econometrics, what is the formula for the standard error of the estimate
(SEE)? Calculate the SEE for the following data:
y = 5 + 2x
x: 1, 2, 3, 4, 5
, y: 7, 9, 11, 13, 15
Answer: The formula for SEE is √[Σ(y - ŷ)² / (n - 2)], where ŷ is the predicted value of y, n is
the number of observations, and Σ is the summation symbol. In this case, SEE = √[Σ(7 - 7)² +
(9 - 9)² + (11 - 11)² + (13 - 13)² + (15 - 15)² / (5 - 2)] = √[] = 0.
Question 4: (10 points)
Multiple Choice
In game theory, which of the following is a characteristic of a zero-sum game?
a) The sum of the payoffs for all players is constant.
b) There are a finite number of players.
c) The game has a unique Nash equilibrium.
d) All players have complete information.
Answer: a
Question 5: (10 points)
Solution
In international economics, explain the difference between absolute advantage and
comparative advantage. Provide an example to illustrate your explanation.
Answer: Absolute advantage refers to a country's ability to produce a good with a lower
opportunity cost than another country, while comparative advantage refers to a country's
ability to produce a good with a lower relative opportunity cost than another country. For
example, Country A can produce 10 cars or 20 computers in one year, while Country B can
produce 8 cars or 16 computers in one year. Country A has an absolute advantage in both
goods, but Country B has a comparative advantage in computers.
Question 6: (10 points)
Calculation
In public economics, what is the marginal cost of public goods? Calculate the marginal cost
for the following data:
Q: 1, 2, 3, 4, 5
MC: 10, 12, 14, 16, 18
Answer: The marginal cost of public goods is the additional cost of providing one more unit
of the good. In this case, MC = 2.
Question 7: (10 points)
Multiple Choice
In labor economics, which of the following factors would cause an increase in the demand
for labor?
Date: March 25, 2026
Duration: 2 hours
Total Score: 100
Instructions:
1. Answer all questions.
2. Show all your work and calculations for the calculation questions.
3. Indicate the correct option for the multiple-choice questions.
4. You may use a calculator and one-page formula sheet.
5. Please write your name and student ID number on the cover page.
Question 1: (10 points)
Multiple Choice
In the context of microeconomic theory, which of the following statements is true?
a) A perfectly competitive market has a large number of buyers and sellers.
b) A monopolistically competitive market has identical products.
c) An oligopolistic market has a large number of sellers.
d) A monopoly market has a horizontal demand curve.
Answer: a
Question 2: (10 points)
Solution
In macroeconomic theory, what is the difference between real GDP and nominal GDP?
Explain using an example.
Answer: Real GDP is adjusted for inflation, while nominal GDP is not. For example, if the
nominal GDP of a country is $100 billion in 2019 and the inflation rate is 2%, then the real
GDP would be $98 billion.
Question 3: (10 points)
Calculation
In the context of econometrics, what is the formula for the standard error of the estimate
(SEE)? Calculate the SEE for the following data:
y = 5 + 2x
x: 1, 2, 3, 4, 5
, y: 7, 9, 11, 13, 15
Answer: The formula for SEE is √[Σ(y - ŷ)² / (n - 2)], where ŷ is the predicted value of y, n is
the number of observations, and Σ is the summation symbol. In this case, SEE = √[Σ(7 - 7)² +
(9 - 9)² + (11 - 11)² + (13 - 13)² + (15 - 15)² / (5 - 2)] = √[] = 0.
Question 4: (10 points)
Multiple Choice
In game theory, which of the following is a characteristic of a zero-sum game?
a) The sum of the payoffs for all players is constant.
b) There are a finite number of players.
c) The game has a unique Nash equilibrium.
d) All players have complete information.
Answer: a
Question 5: (10 points)
Solution
In international economics, explain the difference between absolute advantage and
comparative advantage. Provide an example to illustrate your explanation.
Answer: Absolute advantage refers to a country's ability to produce a good with a lower
opportunity cost than another country, while comparative advantage refers to a country's
ability to produce a good with a lower relative opportunity cost than another country. For
example, Country A can produce 10 cars or 20 computers in one year, while Country B can
produce 8 cars or 16 computers in one year. Country A has an absolute advantage in both
goods, but Country B has a comparative advantage in computers.
Question 6: (10 points)
Calculation
In public economics, what is the marginal cost of public goods? Calculate the marginal cost
for the following data:
Q: 1, 2, 3, 4, 5
MC: 10, 12, 14, 16, 18
Answer: The marginal cost of public goods is the additional cost of providing one more unit
of the good. In this case, MC = 2.
Question 7: (10 points)
Multiple Choice
In labor economics, which of the following factors would cause an increase in the demand
for labor?
