1. Read All Questions Carefully: Make sure you understand each question before
ANSing.
2. Time Management: You have a specific amount of time to complete the exam.
Keep an eye on the clock and pace yourself.
3. Allowed Materials: Only use materials that are explicitly allowed. Unauthorized
materials can lead to disqualification.
4. ANS Format: Follow the required format for your ANSs. For example, multiple-
choice questions might need you to select the best ANS, while essay questions
require detailed responses.
5. Academic Integrity: Adhere to the university's honor code. Any form of cheating or
plagiarism is strictly prohibited.
6. Technical Requirements: Ensure your computer and internet connection are
stable. For online exams, you might need a webcam and microphone for proctoring
purposes.
7. Submission: Submit your ANSs before the time expires. Late submissions might
not be accepted.
,1. What is the primary purpose of a market mechanism?
A) To eliminate competition
B) To equitably distribute resources
C) To determine prices through supply and demand
D) To ensure maximum production
Correct ANS: C) To determine prices through supply and
demand
Rationale: Market mechanisms rely on the balance of supply
and demand to establish the prices of goods and services.
2. In game theory, what is a Nash Equilibrium?
A) A strategy that leads to the highest payoff for one player
B) A situation where no player can benefit by changing their
strategy unilaterally
C) A mutually beneficial agreement between players
D) A point where total economic surplus is maximized
, Rationale: A Nash Equilibrium occurs when each player's
strategy is optimal given the strategy of the other players.
3. Which of the following is NOT a characteristic of perfect
competition?
A) Homogeneous products
B) Free entry and exit
C) Significant market power
D) Full information
Correct ANS: C) Significant market power
Rationale: Perfect competition implies that no individual firm
has market power, as they are price takers.
4. What role do transaction costs play in market design?
A) They decrease efficiency in markets
B) They ensure that only large firms can operate
C) They facilitate price stability
D) They are irrelevant to market functioning
Correct ANS: A) They decrease efficiency in markets
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