Roberto Scazzieri

Sample mid-term exam paper

University of Bologna

School of Economics, Management and Statistics

Academic Year 2017-2018

Economic Analysis Paper - 1^st Mid-term Exam 3.11.2017

Part One

Students must comment one of the two following passages:

1. ‘The fact […] that many complex systems have a nearly decomposable hierarchic structure is a major facilitating factor enabling us to understand, to describe, and even to «see» such systems and their parts’ (Simon)
2. ‘Probably the most appealing of the possible postulates leading to uniqueness [of the market-clearing, “equilibrium”, price vector p] is Diagonal Dominance. This condition, if fulfilled in fact, would give a general equilibrium system a kind of Marshallian flavor, inasmuch as the properties of the demand and supply curves in the plane of the price of the good in question and the quantity supplied or demanded are in some sense the “dominating” properties. It means that partial analysis may not make serious mistakes’ (Arrow and Hahn).

Part Two

Students must answer two of the three following questions:

1. Illustrate and discuss the distinction between the ‘pure preference’ paradigm and the ‘pure production’ paradigm in the process of complexity reduction that leads to the construction of economic theory.
2. ‘Consider the two following choices:

   {x} = C {x, y},

   {y} = C {x, y, z} .

   This pair of choices violates many of the standard conditions of internal consistency. But the presumption of inconsistency may be easily disputed depending on the context, if we know a bit more about what the person is trying to do’ (Sen). Discuss.

3. Given the subset S’ of the possible outcomes in S (S’ ⊆ S ) that are associated with a “satisfactory” pay-offV(s) = 1, discuss in which way a boundedly rational agent may be able to make a “satisficing choice” (that is, a choice leading to an outcome s ∈ S’) .

Pubblicato il: 19 marzo 2019