DEPARTMENT OF ECONOMICS
SAN JOSE STATE UNIVERSITY
MASTER’S COMPREHENSIVE EXAMINATION
MAY 1, 2015
6:00 P.M. TO 9:30 P.M.
PROCTOR: R. RAGAN
INSTRUCTIONS:
1.
Answer ONLY the specified number of questions from the options provided in each
section. Do not answer more than the required number of questions. Each section takes
one hour.
2.
Your answers must be on the paper provided. No more than one answer per page. Do not
answer two questions on the same sheet of paper.
3.
If you use more than one sheet of paper for a question, write “Page 1 of 2” and
“Page 2 of 2.”
4.
Write ONLY on one side of each sheet. Use only pen. Answers in pencil will be
disqualified.
5.
Write ------ END ----- at the end of each answer.
6.
Write your exam identification number in the upper right-hand corner of each sheet of
paper.
7.
Write the question number in the upper right-hand corner of each sheet of paper.
Section 3: Applied Economics—Answer Any Two Questions.
3A. (Econ 212: Haight) Many people believe one important reason developing world countries
are so poor is that they have rapidly growing populations.
a. Give two reasons why a growing population may be a positive factor rather than a
negative factor.
b. Who was Thomas Malthus?
c. What did Malthus think…and why?
d. What does the empirical evidence say about Malthus’ theory?
3B. (Econ 221: Holian) Consider a Cournot duopoly problem, where market demand is given by
Q = 12 – P, where Q is the sum of both producers’ output (i.e. q1 + q2 = Q), P is the market price,
firm 1 has total costs given by TC1 =1 + q1, and firm 2 has total costs given by TC2 = 2 + 2q2.
Answer the following three questions. Under the Cournot assumptions:
a. How much will each firm produce in equilibrium.
b. What will be the equilibrium price.
c. How much profit will each firm make?
(over)
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DEPARTMENT OF ECONOMICS
SAN JOSE STATE UNIVERSITY
MASTER’S COMPREHENSIVE EXAMINATION
MAY 1, 2015
6:00 P.M. TO 9:30 P.M.
PROCTOR: J. HUMMEL
3C. (Econ 205A: Holian) In general terms, discuss threats to the internal and external validity of
econometric results. Please list up to four threats to internal validity and two threats to external
validity, and offer a one-sentence description of each. Finally, name and briefly discuss one
econometric technique that has been developed to ameliorate one of the threats to internal
validity that you listed.
3D. (Econ 200: Foldvary) This is a question about Duty to Rescue laws:
a. Explain the concept of “duty to rescue.”
b. What is the duty to rescue under English common law?
c. Aside from the duty of parents and guardians to rescue minors in peril, analyze the
efficiency and equity of “duty to rescue” laws.
d. Analyze the consequences of a default “duty to rescue” law that permits parties to opt
out with disclosure and warning. (The duty to rescue of employers, common carriers, and
property owners would be voided by contracts, disclosures, and warnings.)
e. If there is a legal duty to rescue among adults, is law more efficient as criminal or civil
law?
3E. (Econ 232: Foldvary) This is a question about Taxing Gross Revenue: Explain how a tax on
gross revenue could have a deadweight loss significantly greater than the usual triangular
depiction of a sales tax shifting supply up or demand down, reducing the quantity. Thus, aside
from the tax wedge from a higher price paid by the buyers and lower price paid to the sellers,
creating a deadweight loss due to the reduction in quantity, how could a tax on gross revenues
generate a “quantum leap” of greatly reduced production and employment?
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