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    Final Exam - Ahmad Zakaria

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    Ahmad Zakaria
    This document contains the final exam for an MBA course in Managerial Economics. The exam includes 3 questions: 1) analyzing price elasticity of demand, 2) drawing and labeling a market diagram and identifying factors that affect supply and demand, and 3) discussing economic problems in Egypt and IMF conditions to address them. The problems in Egypt included an overvalued currency, foreign exchange scarcity, low reserves, large deficits, and high debt. The IMF loan focused on monetary reforms like floating the currency, fiscal reforms like reducing subsidies and boosting revenue, and structural reforms to support businesses and women.

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    Final Exam - Ahmad Zakaria

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    This document contains the final exam for an MBA course in Managerial Economics. The exam includes 3 questions: 1) analyzing price elasticity of demand, 2) drawing and labeling a market diagram and identifying factors that affect supply and demand, and 3) discussing economic problems in Egypt and IMF conditions to address them. The problems in Egypt included an overvalued currency, foreign exchange scarcity, low reserves, large deficits, and high debt. The IMF loan focused on monetary reforms like floating the currency, fiscal reforms like reducing subsidies and boosting revenue, and structural reforms to support businesses and women.

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    This document contains the final exam for an MBA course in Managerial Economics. The exam includes 3 questions: 1) analyzing price elasticity of demand, 2) drawing and labeling a market diagram and identifying factors that affect supply and demand, and 3) discussing economic problems in Egypt and IMF conditions to address them. The problems in Egypt included an overvalued currency, foreign exchange scarcity, low reserves, large deficits, and high debt. The IMF loan focused on monetary reforms like floating the currency, fiscal reforms like reducing subsidies and boosting revenue, and structural reforms to support businesses and women.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    39 views8 pages

    Final Exam - Ahmad Zakaria

    Uploaded by

    Ahmad Zakaria
    This document contains the final exam for an MBA course in Managerial Economics. The exam includes 3 questions: 1) analyzing price elasticity of demand, 2) drawing and labeling a market diagram and identifying factors that affect supply and demand, and 3) discussing economic problems in Egypt and IMF conditions to address them. The problems in Egypt included an overvalued currency, foreign exchange scarcity, low reserves, large deficits, and high debt. The IMF loan focused on monetary reforms like floating the currency, fiscal reforms like reducing subsidies and boosting revenue, and structural reforms to support businesses and women.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    Managerial Economic

    Dr. Lamees El Araby

    Final Exam

    By:
    Ahmad Zakaria Hassan Kotp
    Arab Academy for Science Technology and Maritime Transport

    Course Name: Managerial Economics


    Final Exam
    Open Book Exam

    Answer the following Questions:

    Question 1:

    i. What can you conclude about the Price Elasticity of demand in


    each of the following statements.

    a. " The pizza delivery business in this town is very competitive. I’d
    lose half my customers if I raised the price by as little as 10%"

    Elasticity of Demand = 50% ÷ 10% = 5 < 1 Elastic Demand

    b. My economics professor has chosen to use the Krugman/Wells


    textbook for this class. I have no choice but to buy this book.”

    Elasticity of Demand = 0 Perfectly Inelastic Demand

    MBA, Human Resources Management, Final Exam, Fall 2019 2


    Arab Academy for Science Technology and Maritime Transport

    ii. Do you think the price elasticity of demand for Ford sport-utility
    vehicles (SUVs) will increase, decrease, or remain the same when
    each of the following events occurs? Explain your answer briefly

    a. Other car manufacturers, such as General Motors, decide to make


    and sell SUVs

    - The closer the substitutes for a good or service, the more elastic is the
    demand for the good or service.
    - The price elasticity of demand will increase

    b. Due to ad. campaigns, Americans believe that SUVs are much safer
    than ordinary passenger cars.

    - Due to the American believe that SUVs are much safer, the demand
    increased but the price remain the same as SUVs not

    - The price elasticity of demand remains the same

    MBA, Human Resources Management, Final Exam, Fall 2019 3


    Arab Academy for Science Technology and Maritime Transport

    Question 2
    Select and name a market of any well-known product, draw its
    market diagram, state and name four different factors that might
    cause changes in equilibrium price and quantity.
    The Product: Oriental Grill Restaurant in Egypt
    The Market Type : Monopolistic Competition Market

    - A monopolistically competitive firm is an intermediate case between


    monopoly and competition.

    - The demand curve as a monopolistic competitor face is not flat, but rather
    downward-sloping, which means that the monopolistic competitor can raise
    its price without losing all of its customers or lower the price and gain more
    customers.
    - Since there are substitutes, the demand curve facing a monopolistically
    competitive firm is more elastic than that of a monopoly where there are no
    close substitutes.
    - Equilibrium in a market occurs when the (Price) balances the plans of buyers
    and sellers (Quantities).

    MBA, Human Resources Management, Final Exam, Fall 2019 4


    Arab Academy for Science Technology and Maritime Transport

    Factors that might cause changes in equilibrium price and quantity:


    Factors Affecting on Demand
    a. Expected Future Price:
    Increase in meat prices by the beginning of Next Month.

    b. Preferences
    Because of Month of Ramadan, most people gather for Iftar in restaurants.

    Factors Affecting on Supply


    c. The prices of factors of production
    Increase in meat prices.

    MBA, Human Resources Management, Final Exam, Fall 2019 5


    Arab Academy for Science Technology and Maritime Transport

    d. State of nature
    Covid-19 Restrictions.

    MBA, Human Resources Management, Final Exam, Fall 2019 6


    Arab Academy for Science Technology and Maritime Transport

    Question 3

    "The International Monetary Fund has put some conditions to


    address Monetary, Fiscal and Structural problems that faced the
    Egyptian economy."
    Discuss the last sentence, addressing the main problems at the Egyptian
    economy, and Egypt Compliance with the conditions, under IMF extended
    Fund Facilities.

    The main problems at the Egyptian economy 2016:


    1. Overvalued exchange rate.
    2. foreign exchange scarcity which severely undermined private
    sector activity
    3. A dramatic drop in foreign exchange reserves
    4. Large fiscal deficits.
    5. High level of public debt

    The three-year $12 billion IMF loan reform agenda focused on three key areas:
    1. Monetary:
    Egypt was to transition to a flexible exchange-rate regime and contain inflation. this
    entailed floating the Egyptian pound (EGP).
    The Egyptian government limited dollar transfers abroad
    Inflation, which had fluctuated within a range of 8-15 percent between 2011 and 2016,
    rose to 22 percent in December 2016, Inflation in Egypt remained above 30 percent for
    much of 2017

    2. Fiscal:
    The country was to reduce public debt by cutting fuel subsidies “in June 2017 fuel prices
    increased by up to 50 percent” while expanding spending on vulnerable groups like youth
    and women.
    reducing government spending, including on subsidies, and boosting revenues.
    reduced public sector expenditures, the public sector wage bill has seen a consistent
    annual decline as a percent of GDP from 8.1 in 2014/15 to 5.3 in 2017/18

    MBA, Human Resources Management, Final Exam, Fall 2019 7


    Arab Academy for Science Technology and Maritime Transport

    to increase revenue, the government introduced a value-added tax (VAT) and new fees, in
    addition to selling telecom licenses and land.

    3. Structural Problems
    Egypt was to streamline industrial licensing, provide financing to small and medium-sized
    enterprises (SMEs), decriminalize insolvency, and simplify bankruptcy laws At the
    insistence of Managing Director Christine Lagarde, the IMF agreement included measures
    to support women and children through increased funding for daycares and school meals,
    combined with policies aimed at making public transportation safer and more accessible
    for women.

    Real GDP growth

    Inflation rate

    Unemployment rate

    Good Luck ☺
    Dr. Lamees El Araby

    MBA, Human Resources Management, Final Exam, Fall 2019 8

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