Arab Academy for Science, Technology and Maritime Transport

Graduate School of Business

Final Exam
Course Title: Managerial Economics Course Code: ECO101
Exam Duration: 120 minutes Lecturer: Dr. Yasmine Ramzy
Total: 40 marks Exam Date: March 2022

Answer the following questions:

Question One:
Calculate, illustrate and explain the type of Elasticity (6 marks)

a. If the price of Mercedes Cars increased by 22%, then the quantity demanded
decreased by 34%
b. If the price of water supply increased by 15%, then the quantity supplied
increased by 3%
c. If Hany income increased by 12%, then the quantity demanded on mobile
phone increased by 12%.

Question Two: Case Study

In 2021, Netherland economy was showing declining performance. urging Covid-19
cases in November led to fresh restrictions on activity, and the arrival of Omicron led
to a further intensification of lockdown measures in December. Along with soaring
inflation and plummeting consumer confidence through November, this has likely hit
private consumption. Meanwhile, the virus has likely also dented the external sector
by worsening supply disruptions and dampening demand abroad. Indeed, the
manufacturing was down in November, partly on slower export growth. In politics, a
coalition government was finally formed in December. The total number of population is
reaching 18 million.
The Economic indicators are as follows (in Dollars)
Government spending 18 billion
Consumption 150billion
Profit 18 billion
Business Investment 26 billion
Exports 20 billion
Interest 5 billion
Imports 33 billion
Wages 31 billion
Rent 25 billion

The effect of unemployment is very different in high-income. Unemployed workers in the

developed economies have access to various government programs like unemployment
insurance, welfare, and food stamps; such programs may barely exist in poorer countries.
Although unemployment is a serious problem in many low-income countries, it manifests
itself in a different way than in high-income countries. In fact, the number of unemployed in
Netherland is 780 thousand and number of employed are 9 million

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 The Netherland Government revealed the following CPI data:
December 2019 $789
December 2020 $799
December 2021 $821

Answer the following questions: (30marks)

1. Explain the business cycle stage in Netherland (4 Marks)
2. Calculate GDP by using expenditure approach (3marks).
3. Calculate GDP by using Income approach (3 marks)
4. State if GDP calculated according to two approaches equal or not. If not equal
state, why. (2marks)
5. After calculating GDP calculate per capita income (2 marks)
6. If Potential GDP is $649 billion and Real GDP is $615 billion. Is there a GAP
and what is its type (4 marks)
7. Calculate Rate of unemployment. Explaining is it an actual rate (4 marks)
8. Calculate the inflation rate for 2020 and 2021. Explain how does Inflation
Rate change and why CPI might be biased. (6 marks)
9. Calculate Growth Rate 2019, given that GDP in 2020 was $615billion and
GDP in 2019 is $599 billion. (2marks)

Question Three (4 Marks)

a. Choose a product and explain the most appropriate market structure for it (2 marks)
b. Explain the difference between RGDP and Nominal GDP (2marks)

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