EC4901Sum2010

OLLSCOIL NA hÉIREANN
THE NATIONAL UNIVERSITY OF IRELAND
COLÁISTE NA hOLLSCOILE, CORCAIGH
UNIVERSITY COLLEGE, CORK
Summer 2010
BSc (Business and Financial Economics) 4
EC4901 The Market Economy 4
Dr. Ward
Prof. Fanning
Mr. Crowley
TIME ALLOWED: 1.5 Hours
INSTRUCTIONS - PLEASE READ CAREFULLY
Sections No. of Questions to be attempted% of total marks
available
A Long Questions: 1 out of 2 50%
B Long Questions: 1 out of 2 50%
All questions within each section carry equal weight
Attempt the correct number of questions in each section: Only that number of questions will be graded. If you attempt more than the correct number, please indicate what questions you wish to have graded. If you fail to do this, the appropriate number of lowest-numbered questions of those you answered will be graded.
Write your Examination Number on each answer book
Section A
A1.
(a) With reference to Hayek’s (1945) article on the use of knowledge in
society, discuss the role of the price system in communicating
information.
(b) Describe the six basic features of entrepreneurial knowledge from
the Austrian perspective.
(c) “The theory of perfect competition, which assumes perfect
information, has no relation to competition (the process), except
possibly as the result of competition, after the process has completed
its course.” (Kirzner, 1973) Critically evaluate the above quotation.
A2.
(a) Describe the five categories in Schumpeter’s definition of
innovation.
(b) Explain the role of entrepreneurship in a market economy.
(c) Explain what Schumpeter means by “creative destruction” and
describe its impact on the business cycle.
Section B
B1.
(a) Since 1978, the Chinese economy has grown impressively.
In your opinion, what are the main factors that explain its growth?
Explain your answer.
(b) Do you think China’s rate of growth can persist in the context of
today’s economic ambiguities and contradictions?
(c) The recent financial crisis has shown the fragility of China’s
dependence on the American consumer and that its original export-
led growth strategy may no longer sustain long term growth. What
do you think the Chinese Government should do to sustain high
growth rates over the long term (next 15-25 years)?
B2.
(a) Outline, using the pyramid model of competitiveness, the sources of
Competitiveness?
(b) Based on the results from the 2009-2010 Global Competitiveness
Report (GCR), how competitive is China relative to other countries
in the world?
(c) Using Porter’s diamond model and the 2009-2010 Global
Competitiveness Report (GCR), critically evaluate the business
environment in China?。