最新版微观经济学精品习题英文版 (with answer) (9)

英文微观经济学试题及答案一、选择题（每题2分，共20分）1. Which of the following is not a characteristic of a perfectly competitive market?A. Many buyers and sellersB. Homogeneous productsC. Free entry and exitD. Monopoly powerAnswer: D2. The law of diminishing returns states that:A. The total product of labor increases as more labor is addedB. The marginal product of labor eventually decreases as more labor is addedC. The average product of labor is always higher than the marginal productD. The marginal product of labor is always higher than the average productAnswer: B3. In the short run, a firm in a perfectly competitive market will shut down if:A. Total revenue is greater than total variable costB. Total revenue is less than total costC. Total revenue is less than total variable costD. Total revenue is less than average total costAnswer: C4. The demand for a good is likely to be more elastic when:A. The good has many close substitutesB. The good is a luxury itemC. The good is a necessityD. The good represents a small proportion of consumer's incomeAnswer: A5. The consumer surplus is the difference between:A. The maximum price a consumer is willing to pay and the market priceB. The market price and the minimum price a consumer is willing to payC. The maximum price a consumer is willing to pay and the minimum price a consumer is willing to payD. The minimum price a consumer is willing to pay and the market priceAnswer: A...（此处省略其他选择题）二、简答题（每题10分，共30分）1. Explain the concept of price elasticity of demand and itsdeterminants.Answer: Price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. The determinants of price elasticity include the availability of substitutes, the proportion of income spent on the good, the necessity of the good, and the time period over which the demand is being considered.2. What is the difference between a normal good and aninferior good?Answer: A normal good is a good for which the demand increases as income increases, while the demand for aninferior good decreases as income increases. This is because normal goods are typically considered desirable or of higher quality, while inferior goods are seen as lower quality substitutes that consumers prefer to avoid as their income increases.3. Define the law of supply and give an example.Answer: The law of supply states that, all else being equal, the quantity supplied of a good will increase as the price of the good increases, and decrease as the price of the good decreases. An example of this would be the supply of oil; if the price of oil rises, producers are more likely to increase production and supply more oil to the market.三、计算题（每题25分，共50分）1. A firm has the following total cost function: TC = 0.5Q^2 - 4Q + 100. Calculate the firm's average total cost (ATC) and marginal cost (MC) at the quantity level of Q = 50.Answer:To find the average total cost (ATC), we divide the total cost (TC) by the quantity (Q):\[ ATC = \frac{TC}{Q} = \frac{0.5Q^2 - 4Q + 100}{Q} \]At Q = 50:\[ ATC = \frac{0.5(50)^2 - 4(50) + 100}{50} = \frac{1250}{50} = 25 \]The marginal cost (MC) is the derivative of the total cost function with respect to quantity:\[ MC = \frac{dTC}{dQ} = 0.5 \times 2Q - 4 \]At Q = 50:\[ MC = 0.5 \times 2 \times 50 - 4 = 50 - 4 = 46 \]2. A monopolist faces the demand function P = 100 - 2Q and has a total cost function TC = 10Q. Calculate the profit-maximizing level of output and the corresponding price.Answer:First, calculate the marginal revenue (MR) by taking the derivative of the total revenue (TR) with respect to Q. TR is P*Q, so:\[ TR = (100 -。

Chapter 5 Elasticity and Its Application1. If price elasticity of demand is2.0, this implies that consumers would ( c )a.buy twice as much of the good if price falls by 10 percent.b.require a 2 percent cut in price to raise quantity demanded of the good by 1percent.c.buy 2 percent more of the good in response to a 1 percent cut in price.d.require at least a $2 increase in price before showing any response to the priceincrease.2. If the price elasticity of demand within the price range from $1 and $1.25 for carrots is0.79 and for radishes is 1.6, then within that price range ( b )a.carrots are more price elastic than radishes.b.radishes are more price elastic than carrots.c.carrots and radishes must be substitute goods.d.carrots and radishes must be complementary goods.3. S ue’s Bagel Shop wants to estimate how responsive bagels are to a change in cream cheese prices. To accomplish this task, the following data would NOT be needed? ( a )a.Percentage change in bagel price.b.Original price of cream cheese.c.New quantity of bagels sold.d.Original quantity of bagels sold.4. If Weiskamp T-Shirt Co. lowers its price from $6 to $5 and finds that students increase their quantity demanded from 400 to 600 T-shirts, then the demand for Weiskamp T-shirts within this price range is ( b )a.price inelastic. c. unit elastic.b.price elastic.d. cross elastic.5. The slope of the demand curve is not the same as the price elasticity of demand because the slope of a demand curve ( b )pares percentage changes in quantity demanded and price.pares absolute changes in quantity demanded and price.c.obeys the law of demand.d.is not constant when the demand curve is linear.6. The cross elasticity of demand for substitute goods must be ( d )a.greater than one. c. zero.b.less than one. d. greater than zero.7. A 5 percent increase in the price of sugar reduces sugar consumption by about 10 percent. The increase causes households to ( b )a.spend more on sugar.b.spend less on sugar.c.spend the same amount on sugar.d.consumer more goods like coffee and tea that are complements of sugar.8. As a result of running high temperature this summer in the south of China, the corn crop declined sharply. If corn growers experienced an increase in sales revenue, the demand for corn must be ( b )a.price elastic. c. unitary elastic.b.price inelastic.d. perfectly inelastic.9. The U.S. Post Office finds that it now has extra costs associated with decontaminating first class mail for anthrax（炭疽病）. It is considering a rate hike, but it will only be successful in raising more revenue to pay for these additional costs if ( c )a.there are many substitutes for first class mail service.b.no anthrax is found on the mail.c.the demand for first class mail service is inelastic.d.the rate increase is a very large one.10. Suppose that the elasticity of supply of lawn mowers is 1.5. If the price of lawn mowers rises 5 percent, the quantity supplied of lawn mowers would ( b )a.decline 7.5 percent. c. rise 1.5 percent.b.rise 7.5 percent. d. rise 0.3 percent.11. A decrease in supply will raise the equilibrium price most when demand is ( b )a.relatively elastic. c. unit elastic.b.relatively inelastic.d. perfectly elastic.。

微观经济学试题及答案英文Microeconomics Exam Questions and AnswersQuestion 1: Define the law of demand and explain how itrelates to the concept of price elasticity of demand.Answer 1: The law of demand states that, all else being equal, the quantity demanded of a good or service will decrease asthe price increases. Price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. If the quantity demanded changes significantly in response to a price change, the demand is said to be elastic. Conversely, if the quantity demanded changes very little, the demand is inelastic.Question 2: What is the difference between a firm's total revenue and marginal revenue?Answer 2: Total revenue is the total income received by afirm from selling its product, calculated as the price perunit multiplied by the quantity sold. Marginal revenue, onthe other hand, is the additional revenue generated fromselling one more unit of the product. It is the change intotal revenue divided by the change in quantity sold. In a perfectly competitive market, marginal revenue equals the price, but in a market with some degree of monopoly power, marginal revenue is less than the price.Question 3: Explain the concept of consumer surplus and howit is calculated.Answer 3: Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. It is a measure of the welfare gain to consumers from participating in a market. It is calculated by finding the area under the demand curve but above the market price, which represents the total amount consumers would have been willing to pay for each unit up to the quantity they actually purchase.Question 4: What is the marginal cost and how does it relateto a firm's decision to produce?Answer 4: Marginal cost is the cost of producing oneadditional unit of a good or service. It is the change intotal cost resulting from producing one more unit. Firms will continue to produce additional units as long as the marginal cost is less than the marginal revenue. If the marginal cost exceeds the marginal revenue, the firm will reduce production, as producing one more unit would result in a loss.Question 5: Define economies of scale and explain how they affect a firm's cost structure.Answer 5: Economies of scale refer to the cost advantagesthat a firm experiences when it increases its level of output. As the scale of production increases, the average cost perunit of output decreases due to factors such as spreadingfixed costs over more units, specialization of labor, andbulk purchasing discounts. This can lead to lower per-unit costs and potentially higher profits.Question 6: What is the difference between a normal good and an inferior good?Answer 6: A normal good is a good for which the demand increases as consumers' income increases. In contrast, an inferior good is a good for which the demand decreases as consumers' income increases. This is because consumers tend to substitute inferior goods with superior or higher-quality goods when their income rises.End of ExamPlease note that this is a sample set of microeconomics exam questions and answers. The actual content of an exam would depend on the specific topics covered in the course and the level of difficulty desired by the instructor.。

Microeconomics, 10e (Parkin)Chapter 5 Efficiency and Equity1 Resource Allocation Methods1) In the United States, resources are most often allocated byA) market price.B) command system.C) lottery.D) contest.Answer: ATopic: Resource Allocation MethodsSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking2) A contest is a good way to allocate scarce resources whenA) the efforts of the players are hard to monitor directly.B) the lines of responsibility are clear.C) the decision being made affects a large number of people.D) there is no effective way to distinguish among potential users.Answer: ATopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking3) The resource allocation method that is used to allocate scarce resources between private use and government use isA) first-come, first-served.B) personal characteristics.C) majority rule.D) lottery.Answer: CTopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Modified 10th editionAACSB: Reflective Thinking4) Which of the following is true?A) Lotteries work best when a resource can serve just one user at a time in a sequence.B) A market price always allocates resources better than does a command system.C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by majority rule.D) Force has never played an important role in allocating scarce resources.Answer: CTopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking5) Which of the following is true?A) When resources are allocated on the basis of personal characteristics, all people who are willing and able to pay the price get the resource.B) When the range of activities to be monitored is large and complex, a command system allocates resources better than a market price.C) When a market price allocates resources, some people who are willing and able to pay that price don't get the resource.D) Force helps support the legal system on which markets function.Answer: DTopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Modified 10th editionAACSB: Reflective Thinking6) As a method of resource allocation, forceA) is not important.B) plays a crucial negative role.C) plays a crucial positive role.D) plays a crucial role for both good and ill.Answer: DTopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking7) As a method of resource allocation, market priceA) means those who are willing and able to pay get a particular good or service.B) works well when self-interest must be suppressed.C) works best inside firms and government departments.D) is efficient when there is no effective way to distinguish among potential users of a scarce resource.Answer: ATopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Modified 10th editionAACSB: Reflective Thinking8) Which of the following is true?A) When a market price allocates resources, all people who are willing and able to pay that price get the resource.B) A command system works well when the range of activities to be monitored is large and complex.C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by market prices.D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a lottery.Answer: ATopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking9) When allocating resources using market priceA) everyone who is willing and able to pay for a good gets one.B) everyone who wants a good gets one.C) everyone who is willing to pay for a good gets one.D) everyone who is able to pay for a good gets one.Answer: ATopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking10) When scarce resources can serve only one user at a time in sequence, which method works well for allocating the scarce resources?A) first come, first servedB) lotteryC) contestD) command systemAnswer: ATopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking11) Which of the following is true?A) When a market price allocates resources, everyone who is able to pay the price gets the resource.B) A command system works well when the lines of authority and responsibility are clear .C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by command.D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a market price.Answer: BTopic: Resource Allocation MethodsSkill: ConceptualQuestion history: Modified 10th editionAACSB: Reflective Thinking12) Allocating resources by the order of someone in authority is a ________ allocation method.A) first-come, first-servedB) market priceC) majority ruleD) commandAnswer: DTopic: Study Guide Question, Resource Allocation MethodSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking13) Often people trying to withdraw money from their bank must wait in line, which reflects a ________ allocation method.A) first-come, first-servedB) market priceC) contestD) commandAnswer: ATopic: Study Guide Question, Resource Allocation MethodSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking14) If a person will rent an apartment only to married couples over 30 years old, that person is allocating resources using a ________ allocation method.A) first-come, first-servedB) market priceC) personal characteristicsD) commandAnswer: CTopic: Study Guide Question, Resource Allocation MethodSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking2 Benefit, Cost, and Surplus1) The value of one more unit of a good or service is theA) marginal benefit.B) minimum price that people are willing to pay for another unit of the good or service.C) marginal cost.D) opportunity cost of producing one more unit of a good or service.Answer: ATopic: Value, Willingness to Pay, and DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking2) The value of a good is equal to theA) maximum price you are willing to pay for it.B) price that you actually pay for it.C) price you actually pay for it minus the maximum you are willing to pay for it.D) maximum you are willing to pay for it minus the price you actually pay for it.Answer: ATopic: Value, Willingness to Pay, and DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking3) Marginal benefit is the benefit received from ________.A) consuming more goods or servicesB) producing the efficient quantityC) consuming the efficient quantityD) consuming one more unit of a good or serviceAnswer: DTopic: Marginal BenefitSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking4) All of the following statements about marginal benefit are correct EXCEPT the marginal benefit of a goodA) is the benefit a person receives from consuming one more unit of the good or service.B) is measured as the maximum amount that a person is willing to pay for one more unit of the good.C) is equal to zero when resource use is efficient.D) decreases as the quantity consumed of the good increases.Answer: CTopic: Marginal BenefitSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking5) Sal likes to eat pizza. The ________ is the maximum amount that Sal is willing to pay for one more piece of pizza.A) efficient priceB) efficient amountC) marginal benefitD) marginal costAnswer: CTopic: Marginal BenefitSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking6) Marginal benefitA) is the same as the total benefit received from consuming a good.B) is the maximum amount a person is willing to pay for one more unit of a good.C) increases as consumption increases.D) is the difference between total benefit and total cost.Answer: BTopic: Marginal BenefitSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking7) Jane is willing to pay $50 for a pair of shoes. The actual price of the shoes is $30. Her marginal benefit isA) $50.B) $30.C) $20.D) $80.Answer: ATopic: Marginal BenefitSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Reflective ThinkingThe table below shows the demand schedules for pizza for Abby and Barry who are the only buyers in the market.8) Based on the table, what is Abby's marginal benefit from the 10th slice of pizza?A) $4B) $13C) $0.50D) $40Answer: ATopic: Marginal BenefitSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills9) Based on the table, what is Barry's marginal benefit from the 40th slice of pizza?A) $3B) $5.50C) $0.50D) $12Answer: ATopic: Marginal BenefitSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills10) Based on the table, what is the marginal social benefit from the 45th slice of pizza?A) $3.50B) $3.25C) $0.50D) $9Answer: ATopic: Marginal Social BenefitSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills11) If you increase your consumption of soda by one additional can a week, your marginal benefit of this last can is $1.00. The ________ of this last can of soda is $1.00.A) valueB) priceC) opportunity costD) marginal costAnswer: ATopic: Value, Willingness to Pay, and DemandSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills12) A person will choose to buy a good as long asA) marginal benefit is at least as great as price.B) consumer surplus is positive.C) marginal benefit is positive.D) consumer surplus is at least as great as price.Answer: ATopic: Value, Willingness to Pay, and DemandSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking13) Sam's demand curve for pizzaA) lies above her marginal benefit curve for pizza.B) lies below her marginal benefit curve for pizza.C) is the same as her marginal benefit curve for pizza.D) has one point in common with her marginal benefit curve for pizza.Answer: CTopic: Value, Willingness to Pay, and DemandSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking14) The market demand curveA) can also be the marginal social cost curve.B) shows the value of a good that consumers must give up to get another unit of a different good.C) by itself determines equilibrium prices.D) can also be the marginal social benefit curve.Answer: DTopic: Marginal Benefit and DemandSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking15) The market demand curve also isA) a marginal social cost curve.B) a marginal social benefit curve.C) an opportunity cost curve.D) a consumer surplus curve.Answer: BTopic: Marginal Benefit and DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking16) The market demand curve for coffee is the same as theA) marginal social cost curve of coffee.B) marginal social benefit curve of coffee.C) opportunity cost curve of coffee.D) marginal social benefit curve minus the marginal social cost curve of coffee.Answer: BTopic: Marginal Benefit and DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking17) A market demand curve measuresA) how much a consumer is willing to pay for an additional unit of the good.B) the marginal social benefit of an additional unit of the good.C) the marginal social cost of an additional unit of the good.D) Both answers A and B are correct.Answer: DTopic: Value, Willingness to Pay, and DemandSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking18) Moving down along the market demand curve for hot dogs, theA) maximum price that people are willing to pay for hot dogs increases.B) marginal social benefit of hot dogs decreases.C) marginal social cost of hot dogs increases.D) consumer surplus of the last hot dog consumed increases.Answer: BTopic: Value, Willingness to Pay, and DemandSkill: ConceptualQuestion history: Modified 10th editionAACSB: Reflective Thinking19) The market demand curve is constructed by adding theA) quantities demanded by each individual at each price.B) prices that each individual is willing to pay at each quantity.C) Neither answer A nor answer B is correct.D) Both answer A and answer B are correct.Answer: ATopic: Individual Demand and Market DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking20) A market demand curve is constructed byA) a horizontal summation of each individual demand curve.B) averaging each individual demand curve.C) dividing one individual demand curve by the number of consumers in the market.D) a vertical summation of each individual demand curve.Answer: ATopic: Individual Demand and Market DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking21) A market demand curve can be constructed byA) adding the prices all consumers will pay for any given quantity.B) adding the quantities that all consumers buy at each price.C) adding the quantities that a consumer buys at the highest price.D) None of the above answers is correct.Answer: BTopic: Individual Demand and Market DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking22) The market demand curve for iPads is the ________ of all the individual demand curves for iPads.A) horizontal productB) horizontal sumC) vertical sumD) vertical productAnswer: BTopic: Individual Demand and Market DemandSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking23) Given the individual demands for video downloads in the above table, and assuming that these three people are the only ones in the market, which of the following statements is NOT true about market demand for video downloads?A) The market quantity demanded at a price of $5 is 10.B) The height of the market demand curve at a quantity demanded of 22 is $3.C) The height of the market demand curve at a quantity demanded of 16 is $5.D) The market quantity demanded at a price of $2 is 28.Answer: CTopic: Individual Demand and Market DemandSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical SkillsQuantity of tennis24) Jill and Jed have individual demand curves for tennis rackets given in the table above and are the only two demanders in the market. What is the market quantity demanded at the price of $30?A) 2B) 5C) 11D) 18Answer: BTopic: Individual Demand and Market DemandSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills25) Homer, Bart, and Lisa are the only consumers in the market. Using the information in the above table, what is the market demand for chocolate chip cookies at $4.00 per pound?A) 21 poundsB) 17 poundsC) 11 poundsD) 4 poundsAnswer: CTopic: Individual Demand and Market DemandSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills26) Consumer surplus is the ________ summed over the quantity bought.A) marginal social benefit minus the marginal social costB) number of dollars' worth of other goods and services forgone to obtain one more unit of a good or serviceC) value of a good or service minus the price paid for the good or serviceD) value of a good or service plus the price paid for the good or serviceAnswer: CTopic: Consumer SurplusSkill: RecognitionQuestion history: Modified 10th editionAACSB: Reflective Thinking27) ________ is the value of a good minus the price paid for it summed over the quantity bought.A) Producer surplusB) Consumer surplusC) SurplusD) ShortageAnswer: BTopic: Consumer SurplusSkill: RecognitionQuestion history: Modified 10th editionAACSB: Reflective Thinking28) Consumer surplus is theA) value of a good expressed in dollars.B) price of a good expressed in dollars.C) value of a good minus the price paid for it summed over the quantity bought.D) value of a good plus the price paid for it summed over the quantity bought.Answer: CTopic: Consumer SurplusSkill: RecognitionQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking29) Consider the market for hot dogs. As long as the marginal benefit of consuming hot dogs is greater than the price of hot dogs,A) people receive consumer surplus from eating hot dogs.B) the price of hot dogs will rise.C) the value of hot dogs will rise.D) there is no decreasing marginal benefit of eating hot dogs.Answer: ATopic: Consumer SurplusSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking30) If the price of a pizza increases and the demand curve for pizza does not shift, then the consumer surplus from pizza will ________.A) increaseB) decreaseC) equal the producer surplus if the market produces the efficient quantity of pizzaD) remain the sameAnswer: BTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking31) Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1. What is the value of Nick's consumer surplus for the milkshakes he buys?A) $2B) $9C) $3D) $10Answer: CTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills32) A used car was recently priced at $20,000.00. Seeing the car, Bobby thought, "It's nice, but ifI have to pay more than $19,500 for this car, then I would rather do without it." After negotiations, Bobby purchased the car for $19,250.00. His consumer surplus was equal toA) $19,500.00.B) $1,750.00.C) $250.00.D) $0.00.Answer: CTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills33) When the Smith's were shopping for their present home, the asking price from the previous owner was $250,000.00. The Smith's had decided they would pay no more than $245,000.00 for the house. After negotiations, the Smith's actually purchased the house for $239,000.00. They, therefore, enjoyed a consumer surplus ofA) $239,000.00.B) $5,000.00.C) $6,000.00.D) $11,000.00.Answer: CTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills34) The latest model car in the dealer's showroom has a sticker price of $35,000.00. Fred, the shopper, has decided that he would pay no more than $32,000.00 for the car. After two hours of bargaining with the saleswoman, Fred actually purchases the car for $31,000.00. Fred, therefore, has obtained a consumer surplus ofA) $35,000.00.B) $32,000.00.C) $4,000.00.D) $1,000.00.Answer: DTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills35) Jane is willing to pay $50 for a pair of shoes. The actual price of the shoes is $30. Her consumer surplus on this pair of shoes isA) $20.B) $50.C) $30.D) $80.Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills36) Charlene is willing to pay $5.00 for a sandwich. If Charlene must pay ________ for a sandwich, she ________.A) $4.00; does not receive consumer surplusB) $4.00; receives consumer surplusC) $6.00; receives consumer surplusD) $6.00; receives a marginal costAnswer: BTopic: Consumer SurplusSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills37) Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the price is $2, on his two slices of pizza Joe receives a total consumer surplus ofA) $4.B) $3.C) $2.D) $1.Answer: BTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills38) Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?A) 1B) 2C) 3D) NoneAnswer: BTopic: Demand and Marginal BenefitSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills39) Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. Jane's consumer surplus from the coffee she buys is $________ per day.A) $1.60B) $1.70C) $4.80D) $6.50Answer: BTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills40) Consider a market that has linear supply and demand curves, and is in equilibrium. The area above the price line and below the demand curve isA) consumer surplus.B) producer surplus.C) marginal cost.D) marginal benefit.Answer: ATopic: Consumer SurplusSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Reflective Thinking41) Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price is equal to $9 per unit then the quantity demanded in the market will be ________ and the consumer surplus for this unit will be ________.A) 3; $10B) 3; $37C) 3; $36D) 4; $8Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills42) Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If price decreases from $9 to $8 then the consumer surplus from this unit will increase byA) $3.B) $4.C) $2.D) $1.Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills43) The figure above shows Clara's demand for CDs. If the price for a CD is $15, then ClaraA) receives no consumer surplus on the 6th CD she buys.B) receives a total of $10 of consumer surplus.C) will buy no CDs.D) receives a total of $40 of consumer surplus.Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills44) The figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is true?A) When Clara buys 6 CDs, she receives $15 of consumer surplus on her 6th CD.B) When Clara buys 6 CDs, she receives a total of $15 of consumer surplus.C) When Clara buys 6 CDs, she receives a total of $30 of consumer surplus.D) When Clara buys 6 CDs, she receives a total of $45 of consumer surplus.Answer: DTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills45) The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys isA) $40.B) $30.C) $20.D) $4.Answer: CTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills46) The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys isA) $5.B) $10.C) $25.D) $125.Answer: DTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills47) The figure above shows Clara's demand for CDs. If the price of a CD were to increase from $15 to $25, Clara's total consumer surplus for all the CDs she buys wouldA) decrease by $40.B) remain unchanged.C) decrease by $90.D) increase by $80.Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills48) The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the maximum that Dana is willing to pay for the 8th gallon of ice cream isA) $1.B) $2.C) $3.D) $5.Answer: CTopic: Value, Willingness to Pay, and DemandSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills49) In the above figure, the individual's consumer surplus will be highest ifA) the price of ice cream is $5 per gallon.B) the price of ice cream is $3 per gallon.C) the price of ice cream is $2 per gallon.D) ice cream is free.Answer: DTopic: Consumer SurplusSkill: ConceptualQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills$2 per gallon, then Dana's consumer surplus from the 4th gallon of ice cream isA) $0.B) $2.C) $3.D) $10.Answer: BTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills51) The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then Dana's consumer surplus from the 4th gallonA) is greater than her consumer surplus from the 8th gallon.B) is the same as her consumer surplus from the 8th gallon.C) is less than her consumer surplus from the 8th gallon.D) could be greater than, equal to, or less than the consumer surplus from the 8th gallon. Answer: ATopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills52) The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then the gallon that gives Dana exactly zero consumer surplus isA) the 8th gallon.B) the 12th gallon.C) the 16th gallon.D) the 20th gallon.Answer: BTopic: Consumer SurplusSkill: AnalyticalQuestion history: Previous edition, Chapter 5AACSB: Analytical Skills。

Chapter 01Thinking Like an Economist Multiple Choice Questions1. Economics is best defined as the study of:A. prices and quantities.B. inflation and interest rates.C. how people make choices under the conditions of scarcity and the results of those choices.D. wages and incomes.2. Economic questions always deal with:A. financial matters.B. political matters.C. insufficient resources.D. choice in the face of limited resources.3. The range of topics or issues that fit within the definition of economics is:A. limited to market activities, e.g., buying soap.B. limited to individuals and firms.C. extremely wide, requiring only the ideas of choice and scarcity.D. very limited.4. The central concern of economics is:A. poverty.B. scarcity.C. wealth accumulation.D. overconsumption.5. The scarcity principle indicates that:A. no matter how much one has, it is never enough.B. compared to 100 years ago, individuals have less time today.C. with limited resources, having more of "this" means having less of "that."D. because tradeoffs must be made, resources are therefore scarce.6. The logical implication of the scarcity principle is that:A. one will never be satisfied with what one has.B. as wealth increases, making choices becomes less necessary.C. as wealth decreases, making choices becomes less necessary.D. choices must be made.7. If all the world's resources were to magically increase a hundredfold, then:A. the scarcity principle would still govern behavior.B. economics would no longer be relevant.C. the scarcity principle would disappear.D. tradeoffs would become unnecessary.8. The principle of scarcity applies to:A. the poor exclusively.B. all consumers.C. all firms.D. everyone—consumers, firms, governments, and nations.9. At the very least, Joe Average and Bill Gates are both identically limited by:A. their wealth.B. the 24 hours that comprise a day.C. their knowledge.D. their influence.10. Forest is a mountain man living in complete isolation in Montana. He is completely self-sufficient through hunting, fishing, and farming. He has not been in the city to buy anything in five years. One can infer:A. the scarcity principle does not apply to Forest.B. Forest is not required to make choices.C. the scarcity principle still applies because more hunting means less fishing and farming.D. Forest is very satisfied.11. The scarcity principle applies to:A. all decisions.B. only market decisions, e.g., buying a car.C. only non-market decisions, e.g., watching a sunset.D. only the poor.12. Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:A. not an economic problem because neither one costs money.B. not an economic problem because it's an hour that is wasted no matter what Chris does.C. an economic problem because the tuition Chris pays covers both the gym and the library.D. an economic problem because Chris has only one hour during which he can study or work out.13. Josh wants to go to the football game this weekend, but he has a paper due on Monday. It will take him the whole weekend to write the paper. Josh decided to stay home and work on the paper. According to the scarcity principle, the reason Josh didn't go to the game is that:A. Josh prefers schoolwork to football games.B. writing the paper is easier than going to the game.C. Josh doesn't have enough time for writing the paper and going to the game.D. it's too expensive to go to the game.14. Whether studying the size of the U.S. economy or the number of children a couple will choose to have, the unifying concept is that wants are:A. limited, resources are limited, and thus choices must be made.B. unlimited, resources are limited, and thus choices must be made.C. unlimited, resources are limited to some but not to others, and thus some people must make choices.D. unlimited, resources are limited, and thus government needs to do more.15. The cost-benefit principle indicates that an action should be taken:A. if the total benefits exceed the total costs.B. if the average benefits exceed the average costs.C. if the net benefit (benefit minus cost) is zero.D. if the extra benefit is greater than or equal to the extra costs.16. When a person decides to pursue an activity as long as the extra benefits are at least equal to the extra costs, that person is:A. violating the cost-benefit principle.B. following the scarcity principle.C. following the cost-benefit principle.D. pursuing the activity too long.17. Choosing to study for an exam until the extra benefit (improved score) equals the extra cost (mental fatigue) is:A. not rational.B. an application of the cost-benefit principle.C. an application of the scarcity principle.D. the relevant opportunity cost.18. The scarcity principle tells us that __________, and the cost-benefit principle tells us __________.A. choices must be made; how to make the choicesB. choices must be made; that the costs can never outweigh the benefits of the choicesC. rare goods are expensive; that the costs should outweigh the benefits of the choicesD. rare goods are expensive; that the costs can never outweigh the benefits of the choices19. According to the cost-benefit principle:A. the lowest cost activity usually gives the lowest benefit.B. a person should always choose the activity with the lowest cost.C. a person should always choose the activity with the greatest benefit.D. the extra costs and benefits of an activity are more important considerations than the total costs and benefits.20. A rational person is one who:A. is reasonable.B. makes choices that are easily understood.C. possesses well-defined goals and seeks to achieve them.D. is highly cynical.21. The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). Thecost-benefit principle predicts that Tim will:A. realize he has had too much soda to drink and go home.B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.C. volunteer to empty out the fountain.D. not drink the seventh glass.22. Janie must either mow the lawn or wash clothes, earning her a benefit of $30 or $45, respectively. She dislikes both equally and they both take the same amount of time. Janie will therefore choose to _________ because the economic surplus is ________.A. mow the lawn; greaterB. wash clothes; greaterC. mow the lawn; smallerD. wash clothes; smaller23. Dean decided to play golf rather than prepare for tomorrow's exam in economics. One can infer that:A. Dean has made an irrational choice.B. Dean is doing poorly in his economics class.C. the economic surplus from playing golf exceeded the surplus from studying.D. the cost of studying was less than the cost of golfing.Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year.24. The opportunity cost of attending Elite U is:A. $50,000B. $10,000C. $20,000D. $15,00025. The opportunity cost of attending State College is:A. $30,000B. $20,000C. $15,000D. $10,00026. Larry maximizes his surplus by attending:A. Elite U, because $60,000 is greater than the benefit at the other schools.B. State College, because the difference between the benefit and cost is greatest there.C. NoName U, because Larry has a full scholarship there.D. Elite U, because the opportunity costs of attending Elite U are the lowest.27. Larry has decided to go to Elite U. Assuming that all of the values described are correct, for Larry to decide on Elite U, he must have:A. calculated his surplus from each choice and picked the one with the highest surplus.B. underestimated the benefits of attending NoName.C. miscalculated the surplus of attending Elite U.D. determined the opportunity cost of each choice and picked the one with the lowest opportunity cost.28. Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. The opportunity cost of going to the beach is:A. the $12 she spent on the umbrella, food and drinks.B. only $1 because she would have spent the money on food and drinks whether or not she went to the beach.C. the movie she missed seeing.D. the movie she missed seeing plus the $12 she spent on the umbrella, food and drinks.29. Relative to a person who earns minimum wage, a person who earns $30 per hour has:A. a lower opportunity cost of working longer hours.B. a higher opportunity cost of taking a day off.C. a lower opportunity cost of driving farther to work.D. the same opportunity cost of spending time on leisure activities.30. The opportunity cost of an activity is the value of:A. an alternative forgone.B. the next-best alternative forgone.C. the least-best alternative forgone.D. the difference between the chosen activity and the next-best alternative forgone.31. Amy is thinking about going to the movies tonight. A ticket costs $7 and she will have to cancel her dog-sitting job that pays $30. The cost of seeing the movie is:A. $7.B. $30.C. $37.D. $37 minus the benefit of seeing the movie.32. Economic surplus is:A. the benefit gained by taking an action.B. the price paid to take an action.C. the difference between the benefit gained and the cost incurred of taking an action.D. the wage someone would have to earn in order to take an action.33. The Governor of your state has cut the budget for the University and increased spending on Medicaid. This is an example of:A. the pitfalls of considering average costs instead of marginal costs.B. poor normative economic decision making.C. poor positive economic decision making.D. choice in the face of limited resources.34. Sally earned $25,000 per year before she became a mother. After she becamea mother, she told her employer that her opportunity cost of working is now $50,000, and so she is not willing to work for anything less. Her decision is based on:A. the high cost of raising a child.B. her desire to save for her child's college expenses.C. her increased value to her employer.D. the value she places on spending time with her child.35. Alex received a four-year scholarship to State U. that covered tuition and fees, room and board, and books and supplies. As a result:A. attending State U. for four years is costless for Alex.B. Alex has no incentive to work hard while at State U.C. the cost of attending State U. is the amount of money Alex could have earned working for four years.D. the cost of attending State U. is the sum of the benefits Alex would have had attending each of the four other schools to which Alex had been admitted.36. Suppose Mary is willing to pay up to $15,000 for a used Ford pick-up truck, but she finds one for $12,000. Her __________ is __________.A. benefit; $12,000B. cost; $15,000C. economic surplus; $3,000D. economic surplus; $12,00037. In general, rational decision making requires one to choose the actions that yield the:A. largest total benefits.B. smallest total costs.C. smallest net benefits.D. largest economic surpluses.38. Suppose the most you would be willing to pay for a plane ticket home is $250, but you buy one online for $175. The economic surplus of buying the online ticket is:A. $175.B. $250.C. $75.D. $0.39. The use of economic models, like the cost-benefit principle, means economists believe that:A. this is exactly how people choose between alternatives.B. this is a reasonable abstraction of how people choose between alternatives.C. those who explicitly make decisions this way are smarter.D. with enough education, all people will start to explicitly make decisions this way.40. Jenna decides to see a movie that costs $7 for the ticket and has an opportunity cost of $20. After the movie, she says to one of her friends that the movie was not worth it. Apparently:A. Jenna failed to apply the cost-benefit model to her decision.B. Jenna was not rational.C. Jenna overestimated the benefits of the movie.D. Jenna underestimated the benefits of the movie.41. Most of us make sensible decisions most of the time, because:A. we know the cost-benefit principle.B. subconsciously we are weighing costs and benefits.C. most people know about the scarcity principle.D. we conduct hypothetical mental auctions when we make decisions.42. Suppose a person makes a choice that seems inconsistent with the cost-benefit principle. Which of the following statements represents the most reasonable conclusion to draw?A. The person (explicitly or implicitly) over-estimated the benefits orunder-estimated the costs or both.B. The cost-benefit principle is rarely true.C. The person does not grasp how decisions should be made.D. The person is simply irrational.43. Economic models are intended to:A. apply to all examples equally well.B. eliminate differences in the way people behave.C. generalize about patterns in decision-making.D. distinguish economics students from everyone else.44. Economic models claim to be:A. reasonable abstractions of how people make choices, highlighting the most important factors.B. exact replications of the decision-making process people use.C. interesting chalkboard exercises with little applicability to the real world.D. exceptionally accurate methods of predicting nearly all behavior of everyone.45. The cost-benefit model used by economists is:A. unrealistic because it is too detailed and specific to apply to a variety of situations.B. unrealistic because everyone can think of times when he or she violated the principle.C. useful because everyone follows it all of the time.D. useful because most people follow it most of the time.46. Barry owns a clothing store in the mall and has asked two economic consultants to develop models of consumer behavior that he can use to increase sales. Barry should choose the model that:A. does not include simplifying assumptions.B. is the most detailed and complex.C. assumes that consumers apply the cost-benefit principle.D. predicts that consumers will always prefer Barry's store to the competing stores.47. Economists use abstract models because:A. every economic situation is unique, so it is impossible to make generalizations.B. every economic situation is essentially the same, so specific details are unnecessary.C. they are useful for describing general patterns of behavior.D. computers have allowed economists to develop abstract models.48. Most people make some decisions based on intuition rather than calculation. This is:A. irrational, because intuition is often wrong.B. consistent with the economic model of decision-making, because calculating costs and benefits leads to decision-making pitfalls.C. consistent with the economic model because people intuitively compare the relative costs and benefits of the choices they face.D. inconsistent with the economic model, but rational because intuition takes into account non-financial considerations.49. Moe has a big exam tomorrow. He considered studying this evening, but decided to go out with Curly instead. Since Moe always chooses rationally, it must be true that:A. the opportunity cost of studying tonight is less than the value Moe gets from spending time with Curly.B. the opportunity cost of studying tonight is equal to the value Moe gets from spending time with Curly minus the cost of earning a low grade on the exam.C. Moe gets more benefit from spending time with Curly than from studying.D. Moe gets less benefit from spending time with Curly than from studying.50. If one fails to account for implicit costs in decision making, then applying the cost-benefit rule will be flawed because:A. the benefits will be overstated.B. the costs will be understated.C. the benefits will be understated.D. the costs will be overstated.Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450.51. If you do not use the frequent-flyer coupon to fly, should you go to Miami?A. Yes, your benefit is more than your cost.B. No, your benefit is less than your cost.C. Yes, your benefit is equal to your cost.D. No, because there are no benefits in the trip.52. What is the opportunity cost of using the coupon for the Miami trip?A. $100B. $450C. $500D. $55053. If you use the frequent-flyer coupon to fly to Atlanta, would you get any economic surplus by making the trip?A. No, there is a loss of $50.B. Yes, surplus of $350.C. Yes, surplus of $400.D. Yes, surplus of $100.54. If the Chicago-Atlanta round-trip air fare is $350, should you go to Miami?A. No, there is a loss of $50.B. No, there is a loss of $100.C. Yes, there is economic surplus of $50.D. Yes, there is economic surplus of $400.55. Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They have two pre-school children. Childcare for their children costs $12,000 per year. Pat has decided to stay home and take care of the children. Pat must:A. value spending time with the children by more than $25,000.B. value spending time with the children by more than $12,000.C. value spending time with the children by more than $13,000.D. value spending time with the children as much as does Chris.You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. (Assume that you would not have been willing to pay any more than $35 for this concert.) Your boss called and she is looking for someone to cover a shift on Saturday at the same time as the concert. You will have to work 4 hours and she will pay you time and a half, which is $9/hr.56. Should you go to the concert instead of working Saturday?A. Yes, your benefit is more than your cost.B. No, your benefit is less than your cost.C. Yes, your benefit is equal to your cost.D. No, because there are no benefits in the concert.57. What is the opportunity cost of going to the concert?A. $1B. $9C. $35D. $3658. What is your opportunity cost, if you go to work on Saturday?A. $0B. $9C. $35D. $3659. Your economic surplus of going to work on Saturday is:A. $0B. $1C. $35D. $36Matt has decided to purchase his textbooks for the semester. His options are to purchase the books via the Internet with next day delivery to his home at a cost of $175, or to drive to campus tomorrow to buy the books at the university bookstore at a cost of $170. Last week he drove to campus to buy a concert ticket because they offered 25 percent off the regular price of $16.因为他们提供75折的正常价格16美元。

曼昆《经济学原理（微观经济学分册）》（第6版）第9章应用：国际贸易课后习题详解跨考网独家整理最全经济学考研真题，经济学考研课后习题解析资料库，您可以在这里查阅历年经济学考研真题，经济学考研课后习题，经济学考研参考书等内容，更有跨考考研历年辅导的经济学学哥学姐的经济学考研经验，从前辈中获得的经验对初学者来说是宝贵的财富，这或许能帮你少走弯路，躲开一些陷阱。

以下内容为跨考网独家整理，如您还需更多考研资料，可选择经济学一对一在线咨询进行咨询。

一、概念题1．世界价格（world price）答：世界价格也称世界市场价格，指一种物品在世界市场上交易的价格。

世界价格是由商品的国际价值决定的。

国际价值是世界市场商品交换的惟一依据，各国商品的国别价值都必须还原为国际价值，以便在国际市场上交换。

而各国商品的国别价值在多大程度上表现为国际价值，是与各国的经济技术水平、劳动强度和劳动生产率密切相关的。

一般来说，一国的经济技术水平和劳动生产率越高，其商品价值就越低于国际商品价值，若按照国际商品价值出售，就能获得较好的经济效益；相反则会在竞争中处于不利的地位。

2．关税（tariff）答：关税是指对在国外生产而在国内销售的物品征收的税。

与其他税收相比，关税有两个主要特点：第一，关税的征收对象是进出境的货物和物品；第二，关税具有涉外性，是对外贸易政策的重要手段。

征收关税的作用主要有两个方面：一是增加本国财政收入；二是保护本国的产业和国内市场。

其中以前者为目的而征收的关税称为财政关税，以后者为目的而征收的关税称为保护关税。

与任何一种物品销售税一样，关税会扭曲激励，使得稀缺资源的配置背离最优水平，使市场接近于没有贸易时的均衡，因此，减少了贸易的好处。

关税虽然使国内生产者的状况变好，而且政府增加了收入，但造成消费者的损失大于获得的这些好处。

关税造成的无谓损失具体表现为：第一，关税使国内生产者能收取的价格高于世界价格，结果，鼓励他们增加低效率地生产。

Chapter 15 Monopoly1. 2. 3. 4. 5. 6. 7. 8. 9. 10. _ __11. 12. 13. 14. 15. 16. 17. 18. 19. 20. _ __1. Monopolies use their market power to ( c )a.charge prices that equal minimum average total cost.b.attain normal profits in the long run.c.restrict output and increase price.d.dump excess supplies of their product on the market.2. If government officials break a natural monopoly up into several smaller firms, then ( c )petition will force firms to attain economic profits rather than accountingprofits.petition will force firms to produce surplus output, which drives up price.c.the average costs of production will increase.d.the average costs of production will decrease.3. Sizable economic profits can persist over time under monopoly if the monopolist ( b )a.produces that output where average total cost is at a maximum.b.is protected by barriers to entry.c.operates as a price taker rather than a price maker.d.realizes revenues that exceed variable costs.4. Most markets are not monopolies in the real world because ( d )a.firms usually face downward-sloping demand curves.b.supply curves slope upward.c.price is usually set equal to marginal cost by firms.d.there are reasonable substitutes for most goods.Consider the following demand and cost information for a monopoly.QUANTITY PRICE TOTAL COST0 $40 $101 $30 $152 $20 $253 $10 $404 $0 $605. The marginal revenue of the second unit is ( a )a.$10b. $20c. $30d. $406. The marginal cost of the fourth unit is ( c )a.$60b. $40c. $20d. $107. The maximum profit this monopolist can earn is ( d )a.$40b. $30c. $20d. $158. To maximize profit, the monopolist sets price at ( b )a.$40b. $20c. $0d. $109. If a monopolist has zero marginal costs ( a )a.it will produce the output at which total revenue is maximized.b.it will produce in the range in which marginal revenue is still increasing.c.it will produce at the point at which marginal revenue is at a maximum.d.it will produce in the range in which marginal revenue is negative.10. The supply curve for the monopolist ( d )a.is horizontal. c. is a 45-degree line.b.is vertical. d. does not exist.11. Many economists criticize monopolists because they produce at output levels that are not efficient. That is to say, monopolists ( a d )a.charge too high a price.b.don’t innovate.c.produce a large quantity of waste.d.have no incentive to produce at their minimum ATC.12. Suppose potatoes were produced in Canada by many, many firms in perfect competition. In Belgium, only one firm produces potatoes for the Belgium market. Suppose further that for the competitive firms and the monopoly minimum ATC is the same. We would expect that in Belgium the price of potatoes is ______ and ______ potatoes are produced and sold than in Canada. ( c )a.higher; more c. higher; fewerb.lower; more d. lower; fewer13. “Monopolists do not worry about efficient production and cost saving since they can jus t pass along any increase in costs to their consumers.” The statement is ( a )a.false; price increases will mean fewer sales, and lower costs will mean higherprofits (or smaller losses).b.true; this is the primary reason why economists believe that monopolies resultin economic inefficiency.c.false; the monopolist is a price taker.d.true; consumers in a monopoly market have no substitutes to turn to when themonopolist raises prices.14. Concerning public utilities, the stated reason for resorting to regulation of a monopoly, rather than promoting competition through antitrust, is that the industry in question is believed to be a ( d )a.profit-maximizing monopoly.b.producer of externalities.c.revenue-maximizing monopoly.d.natural monopoly.15. Splitting up a monopoly is often justified on the grounds that ( c )a.consumers prefer dealing with small firms.b.small firms have lower costs.petition is inherently efficient.d.nationalization is a less preferred option.16. The first major piece of antitrust legislation in the United States was the ( c )a.Clayton Act. c. Sherman Act.b.Celler-Kefauver Act. d. Robinson-Patman Act.。

平新乔《微观经济学十八讲》第9讲 古诺（Cournot ）均衡、Bertrand 与不完全竞争 跨考网独家整理最全经济学考研真题，经济学考研课后习题解析资料库，您可以在这里查阅历年经济学考研真题，经济学考研课后习题，经济学考研参考书等内容，更有跨考考研历年辅导的经济学学哥学姐的经济学考研经验，从前辈中获得的经验对初学者来说是宝贵的财富，这或许能帮你少走弯路，躲开一些陷阱。

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1．考虑一个由两家企业组成的寡头垄断行业，市场的需求由10p Q =-给出。

这两家企业的成本函数分别为1142C Q =+，2233C Q =+。

（1）若两家企业串通追求共同的利润最大化，总的产量水平是多少？市场价格为多少？各自生产多少？各自利润多大？（2）若两家企业追求各自的利润最大化，利用古诺模型，各自生产多少？各自利润多大？市场价格多大？并给出各自的反应函数。

（3）若串通是非法的，但收购不违法。

企业1会出多少钱收购企业2？ 解：（1）若两家企业串通时，它们的目标是追求总利润的最大化，则总利润函数为：()()()221211221112228277p Q Q C Q C Q Q Q Q Q Q Q π=+--=-+--+-利润最大化的一阶条件为：1212820Q Q Q π∂=-+-=∂ 2122720Q Q Q π∂=-+-=∂ 上述两式无解，说明两家企业串通后只由一家企业生产，不存在两家企业同时生产的情况。

根据两家企业的成本函数可得12MC =，23MC =。

由于两家企业的边际成本为常数，且企业1的边际成本小于企业2的边际成本，所以串通后所有的产量全部由企业1提供，故20Q =。

则总利润函数变为：21187Q Q π=-+-利润最大化的一阶条件为：11d 280d Q Q π=-+=，解得14Q =。

因此两家企业串通后，总的产量水平为124Q Q Q =+=； 市场价格为106p Q =-=；企业1的利润为21118412Q Q π=-+-=；企业2的利润为13π=-。

最新版微观经济学精品习题英文版ch02Chapter 2 Thinking Like an Economist1. A simplifying assumption ( )a.affects the important conclusions of an economic model.b.increases the level of detail in an economic model.c.limits the validity of an economic model’s conclusion.d.eliminates unnecessary details from an economic model.2. The ultimate purpose of an economic model is to ( )a.explain reality as completely as possible.b.establish assumptions that closely resemble reality.c.help us to understand economic behavior.d.guide government policy decisions.3. An economic model ( )/doc/7818111235.html,es equations to understand normative economic phenomena.b.often omits crucial elements.c.simplifies reality in order to focus on crucial elements.d.cannot be proven wrong.4. Which of the following activities would occur in a market for factors of production?( )a.Reesa buys a new computer to help balance her personal checkbook.b.Randy pays a speeding ticket.c.Ian mows his grass.d.General Motors hires additional workers to run a third-shift at a factory.5. Which of the following activities would occur in a market for goods and services? ( )a.Harry mows his grass.b.General Motors hires additional workers to run a third shift at a factory.c.Jane bakes pies for Thanksgiving dinner.d.Dolly buys a ticket to a ball game.6. The three sources of income for the household are ( )a.taxes, subsidies from the government, and rent.b.wages, rent, and profit.c.wages, rent, and subsidies from the government.d.wages, rebates, and rent.7. Households play what role(s) in the circular flow diagram? ( )a.purchasers of factors of production and sellers of services.b.purchasers of factors of production and sellers of goods.c.purchasers of goods and services only.d.purchasers of goods and services and sellers of factors of production.8. Which of the following is not an assumption that underlies an economy’s production possibilities frontier? ( )a.fixed income.b.fixed resources.c.unchanged technology.d.fully employed resources.9. Which of the following would not result in an outward shift of a nation’s production possibilities frontier? ( )a. a reduction in the unemployment rate.b. a rise in labor productivity.c.advances in technology.d.an expanding resource base.10. The production possibilities frontier demonstrates the basic economic principle that( )a.economies are always efficient.b.assuming full employment, supply will always determine demand.c.assuming full employment, an economy is efficient only when the productionof capital goods in a particular year is greater than the production ofconsumption goods in that year.d.assuming full employment, to produce more of any one thing, the economymust produce less of at least one other good.11. Opportunity costs most often increase as you move downa production possibilities frontier because ( )a.resources are not completely adaptable to alternative uses.b.factors of production are limited and human wants are unlimited.c.efficiencies are generated by large-scale production.d.economic efficiency is only possible in the short run.。

CHAPTER 2THE BASICS OF SUPPLY AND DEMAND REVIEW QUESTIONSshape of the demand curve it faces by raising the price and observing the change in quantity sold. The university official is not observing the entire demand curve, but rather only the equilibrium price and quantity over the last 15 years. If demand is shifting upward, as supply shifts u pward, demand could have any elasticity. (See Figure 2.7, for example.) Demand80 20 16100 18 18120 16 20a. Calculate the price elasticity of demand when the price is $80. When theprice is $100.We know that the price elasticity of demand may be calculated usingequation 2.1 from the text:EQQPPPQQPDDDDD ==∆∆∆∆.With each price increase of $20, the quantity demanded decreases by 2. Therefore,.1.0202-=-=⎪⎭⎫ ⎝⎛∆∆P Q D At P = 80, quantity demanded equals 20 and().40.01.02080-=-⎪⎭⎫⎝⎛=D ESimilarly, at P = 100, quantity demanded equals 18 and().56.01.018100-=-⎪⎭⎫ ⎝⎛=D Eb.Calculate the price elasticity of supply when the price is $80. When the price is $100.The elasticity of supply is given by:E Q Q P PP Q Q PS SS SS ==∆∆∆∆.With each price increase of $20, quantity supplied increases by 2. Therefore,.1.0202==⎪⎭⎫⎝⎛∆∆P Q S At P = 80, quantity supplied equals 16 and()5.01.01680=⎪⎭⎫ ⎝⎛=S E .Similarly, at P = 100, quantity supplied equals 18 and().56.01.018100=⎪⎭⎫⎝⎛=S Ec.What are the equilibrium price and quantity?The equilibrium price and quantity are found where the quantity supplied equals the quantity demanded at the same price. As we see from the table, the equilibrium price is $100 and the equilibrium quantity is 18 million.d.Suppose the government sets a price ceiling of $80. Will there be a shortage, and, if so, how large will it be?With a price ceiling of $80, consumers would like to buy 20 million, butproducers will supply only 16 million. This will result in a shortage of 4 million.3. Refer to Example 2.5 on the market for wheat. At the end of 1998, both Brazil and Indonesia opened their wheat markets to US farmers. Suppose that these new market add 200 million bushels of U.S. wheat. What would the free market price of wheat have been and what quantity would have been produced and sold by U.S. farmers?The following equations describe the market for wheat in 1985:Q S = 1,800 + 240PandQ D = 2,580 - 194P .If these new market add 200 million bushels of wheat, the new demand curve 'Q D, would be equal to Q ED + 200, or 'Q D= (2,580 - 194P ) + 200 = 2,780 - 194P Equating supply and the new demand, we may determine the new equilibrium price,1,800 + 240P = 2,780 - 194P , or 434P = 980, or P* = $2.26 per bushel.To find the equilibrium quantity, substitute the price into either the supply or demand equation, e.g.,Q S = 1,800 + (240)(2.26) = 2,342andQ D = 2,780 - (194)(2.26) = 2,342.CHAPTER 3CONSUMER BEHAVIOR2. Draw the indifference curves for the following individuals’ preferences for two goods: hamburgers and soft drinks. Indicate the direction in which the individuals ’ satisfaction (or utility) is increasing.a. Joe has convex indifferences curves and dislikes both hamburgers and soft drinks. hamburgerssoft drinks.b.Jane loves hamburgers and dislikes soft drinks, If she is served a soft drink, she willpour it down the drain rather than drink it.hamburgerssoft drinksc. Bob loves hamburgers and dislikes soft drinks, If he is served a soft drink, he will drinkit to be polite. hamburgersdrinksd. Molly loves hamburgers and soft drinks, but insists on consuming exactly one softdrink for every two hamburgers that s he eats.Soft drinks1 2 324 6e.Bill likes hamburgers, but neither likes nor dislikes soft drinks。

Chapter 10 Externalities1. 2. 3. 4. 5. 6. 7. 8. 9. 10. .11. 12. 13. 14. 15. .1. Market failure in the form of externalities arises when ( )a.production costs are included in the prices of goods.b.not all costs and benefits are included in the prices of goods.c.the benefits exceed the costs of consuming goods.d.the market fails to achieve equilibrium.2. Which of the following is an example of a positive externality? ( )a.Air pollution.b. A person litters in a public park.c. A nice garden in front of your neighbor’s house.d.The pollution of a stream.3. The social cost of a good is ( )a.its benefit to the people who buy and consume it.b.its total benefit to everyone in society.c.its cost to everyone in the society that occurs in addition to the private costs.d.the cost paid by the firm that produces and sells it.4. The private benefit of consuming a good is ( )a.its benefit to the people who buy and consume it.b.its total benefit to everyone in the society.c.its cost to everyone in the society.d.the cost paid by the firm that produces and sells it.5. When a person drives a car that pollutes the air ( )a.the private cost of consuming the car’s services exceeds the social cost.b.the private benefit of consuming the car’s services exceeds the social benefit.c.the social cost of consuming the car’s services exceeds the private cost.d.the social benefit of consuming the car’s services exceeds the private benefits.6. If a perfectly competitive industry is not forced to take account of a negative externality it creates, it will produce where ( )a.the marginal cost of production equals the marginal private benefit.b.the marginal cost of production equals the marginal social benefit.c.the marginal social cost of production equals the marginal social benefit.d.price equals marginal social benefit.7. Flu shots are associated with a positive externality. (Those who come in contact with people who are inoculated are helped as well.) Given perfect competition with no government intervention in the vaccination market, which of the following holds? ( )a.At the current output level, the marginal social benefit exceeds the marginalprivate benefit.b.The current output level is inefficiently low.c. A per-shot subsidy could turn an inefficient situation into an efficient one.d.All of the above hold.8. Because there are positive externalities from higher education, ( )a.private markets would provide too little of it.b.private markets would provide too much of it.c.the government should impose a tax on college students.d.the government should impose a tax on students’ families.9. Internalizing an externality means ( )a.the good becomes a public good.ernment regulations or taxes are sufficient to eliminate the externalitycompletely.ernment imposes regulations that eliminate the externality completely.d.incentives are altered so that people take account of the external effects oftheir actions.10. Why can’t private individuals always internalize an externality without the help of government? ( )a.Legal restrictions prevent side payments between individuals.b.Transactions costs may be too high.c.Side payments between individuals are inefficient.d.Side payments between individuals violate equity standards.11. A dentist shared an office building with a radio station. The electrical current from the dentist’s drill causes static in the radio bro adcast, causing the radio station to lose $10,000 in discounted future profits. The radio station could put up a shield at a cost of $30,000; the dentist could buy a new drill that causes less interference for $6,000. Either would restore the radio stati on’s lost profits. What is the economically efficient outcome? ( )a.The radio station puts up a shield, which it pays for.b.The radio station puts up a shield, which the dentist pays for.c.The radio station does not put up a shield and the dentist does not buy a newdrill.d.The dentist gets a new drill and it does not matter who pays for it.12. What economic argument suggests that if transactions costs are sufficiently low, the equilibrium is economically efficient regardless of how property rights are distributed? ( )a.The Coase Theorem.b.Say’s Law.c.The Law of Comparative Advantage.d.The Law of Supply.13. A benefit of taxes over regulation to internalize externalities is ( )a.it is easier to choose the optimal amount of taxes than the optimal amount ofregulation.b.regulations are more difficult to impose than taxes.c.taxes equate the social costs with the social benefits.d.taxes provide incentives to adopt new methods to reduce the externality.14. If the government wants to tax a polluter, the economically efficient outcome occurs when ( )a.the marginal tax equals the marginal cost to other people from the pollution.b.the average tax equals the average cost to other people from the pollution.c.the total tax equals the total cost to other people from the pollution.d.the tax is high enough to stop pollution completely.。

曼昆微观经济学课后练习英文答案集团标准化办公室：[VV986T-J682P28-JP266L8-68PNN]the link between buyers’ willingness to pay for a good and the demandcurve.how to define and measure consumer surplus.the link between sellers’ costs of producing a good and the supply curve.how to define and measure producer surplus.that the equilibrium of supply and demand maximizes total surplus in amarket.CONTEXT AND PURPOSE:Chapter 7 is the first chapter in a three-chapter sequence on welfare economics and market efficiency. Chapter 7 employs the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. These concepts are then utilized in Chapters 8 and 9 to determine the winners and losers from taxation and restrictions on international trade.The purpose of Chapter 7 is to develop welfare economics—the study of how the allocation of resources affects economic well-being. Chapters 4 through 6 employed supply and demand in a positive framework, which focused on the question, “What is the equilibrium price and quantity in a market” This chapter now addresses the normative question, “Is the equilibrium price and quantity in a market the best possible solution to the resource allocation problem, or is it simply the price and quantity that balance supply and demand” Students will discover that under most circumstances the equilibrium price and quantity is also the one that maximizes welfare.KEY POINTS:Consumer surplus equals buyers’ willingness to pay for a good minus the amount they actually pay for it, and it measures the benefit buyers get from participating in a market. Consumer surplus can be computed by finding the area below the demand curve and above the price.Producer surplus equals the amount sellers receive for their goods minus their costs of production, and it measures the benefit sellers get from participating in a market. Producer surplus can be computed by finding the area below the price and above the supply curve.An allocation of resources that maximizes the sum of consumer and producer surplus is said to be efficient. Policymakers are often concerned with the efficiency, as well as the equality, of economic outcomes.The equilibrium of supply and demand maximizes the sum of consumer andproducer surplus. That is, the invisible hand of the marketplace leadsbuyers and sellers to allocate resources efficiently.Markets do not allocate resources efficiently in the presence of market failures such as market power or externalities.CHAPTER OUTLINE:I. Definition of welfare economics: the study of how the allocation of resources affects economic well-being.A. Willingness to Pay1. Definition of willingness to pay: the maximum amount that a buyer will pay for a good.2. Example: You are auctioning a mint-condition recording of Elvis Presley’s first album. Four buyers show up. Their willingness to pay is as follows:If the bidding goes to slightly higher than $80, all buyersdrop out except for John. Because John is willing to paymore than he has to for the album, he derives some benefitfrom participating in the market.3. Definition of consumer surplus: the amount a buyer is willing to payfor a good minus the amount the buyer actually pays for it.4. Note that if you had more than one copy of the album, the price in the auction would end up being lower (a little over $70 in the case of two albums) and both John and Paul would gain consumer surplus.B. Using the Demand Curve to Measure Consumer Surplus1. We can use the information on willingness to pay to derive a demandmarginal buyer . Because the demand curve shows the buyers’ willingness to pay, we can use the demand curve to measure c onsumer surplus.C. How a Lower Price Raises Consumer Surplussurplus because they are paying less for the product than before (area A on the graph).b. Because the price is now lower, some new buyers will enter the market and receive consumer surplus on these additional units of output purchased (area B on the graph).D. What Does Consumer Surplus Measure?1. Remember that consumer surplus is the difference between the amount that buyers are willing to pay for a good and the price that they actually pay.2. Thus, it measures the benefit that consumers receive from the good as the buyers themselves perceive it.III. Producer SurplusA. Cost and the Willingness to Sell1. Definition of cost: the value of everything a seller must give up to produce a good .2. Example: You want to hire someone to paint your house. You accept bidsfor the work from four sellers. Each painter is willing to work if the priceyou will pay exceeds her opportunity cost. (Note that this opportunity costthus represents willingness to sell.) The costs are:sellers will drop out except for Grandma. Because Grandma receives more than she would require to paint the house, she derives some benefit from producing in the market.4. Definition of producer surplus: the amount a seller is paid for a good minus the seller’s cost of providing it.5. Note that if you had more than one house to paint, the price in the auction would end up being higher (a little under $800 in the case of two houses) and both Grandma and Georgia would gain producer surplus.ALTERNATIVE CLASSROOM EXAMPLE:Review the material on price ceilings from Chapter 6. Redraw themarket for two-bedroom apartments in your town. Draw in a priceceiling below the equilibrium price.Then go through:consumer surplus before the price ceiling is put into place. consumer surplus after the price ceiling is put into place. You will need to take some time to explain the relationship between the producers’ willingness to sell and the cost of producing the good. The relationship between cost and the supply curve is not as apparent as the relationship between the It is important to stress that consumer surplus is measured inmonetary terms. Consumer surplus gives us a way to place amonetary cost on inefficient market outcomes (due to governmentB. Using the Supply Curve to Measure Producer Surplus1. We can use the information on cost (willingness to sell) to derive a2.the cost of the marginal seller. Because the supply curve shows the sellers’ cost (willingness to sell), we can use the supply curve to measure producer surplus.C. How a Higher Price Raises Producer Surplussurplus because they are receiving more for the product than before (area C on the graph).b. Because the price is now higher, some new sellers will enter the market and receive producer surplus on these additional units of output sold (area D on the graph).D. Producer surplus is used to measure the economic well-being of producers,ALTERNATIVE CLASSROOM EXAMPLE:Review the material on price floors from Chapter 6. Redraw the marketfor an agricultural product such as corn. Draw in a price supportabove the equilibrium price.Then go through:producer surplus before the price support is put in place.producer surplus after the price support is put in place.Make sure that you discuss the cost of the price support tomuch like consumer surplus is used to measure the economic well-being of consumers.IV. Market EfficiencyA. The Benevolent Social Planner1. The economic well-being of everyone in society can be measured by total surplus, which is the sum of consumer surplus and producer surplus:Total Surplus = Consumer Surplus + Producer SurplusTotal Surplus = (Value to Buyers – Amount Paid byBuyers) +(Amount Received by Sellers – Cost to Sellers)Because the Amount Paid by Buyers = Amount Received bySellers:2. Definition of efficiency: the property of a resource allocation of maximizing the total surplus received by all members of society .3. Definition of equality: the property of distributing economicprosperity uniformly the members of society .a. Buyers who value the product more than the equilibrium price will purchase the product; those who do not, will not purchase the product. Inother words, the free market allocates the supply of a good to the buyers who value it most highly, as measured by their willingness to pay.b. Sellers whose costs are lower than the equilibrium price will produce the product; those whose costs are higher, will not produce the product. Inother words, the free market allocates the demand for goods to the sellers who can produce it at the lowest cost.value of the product to the marginal buyer is greater than the cost to the marginal seller so total surplus would rise if output increases.Pretty Woman, Chapter 6. Vivien (Julia Roberts) and Edward(Richard Gere) negotiate a price. Afterward, Vivien reveals shewould have accepted a lower price, while Edward admits he wouldhave paid more. If you have done a good job of introducingconsumer and producer surplus, you will see the light bulbs gob. At any quantity of output greater than the equilibrium quantity, the value of the product to the marginal buyer is less than the cost to the marginal seller so total surplus would rise if output decreases.3. Note that this is one of the reasons that economists believe Principle #6: Markets are usually a good way to organize economic activity.C. In the News: Ticket Scalping1. Ticket scalping is an example of how markets work to achieve anefficient outcome.2. This article from The Boston Globe describes economist Chip Case’sexperience with ticket scalping.D. Case Study: Should There Be a Market in Organs?1. As a matter of public policy, people are not allowed to sell their organs.a. In essence, this means that there is a price ceiling on organs of $0.b. This has led to a shortage of organs.2. The creation of a market for organs would lead to a more efficientallocation of resources, but critics worry about the equity of a market system for organs.V. Market Efficiency and Market FailureA. To conclude that markets are efficient, we made several assumptions about how markets worked.1. Perfectly competitive markets.2. No externalities.B. When these assumptions do not hold, the market equilibrium may not be efficient.C. When markets fail, public policy can potentially remedy the situation. SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. Figure 1 shows the demand curve for turkey. The price of turkey is P 1and the consumer surplus that results from that price is denoted CS. Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. It measures the benefit to buyers ofparticipating in a market.Figure 1 Figure 22. Figure 2 shows the supply curve for turkey. The price of turkey is P 1and the producer surplus that results from that price is denoted PS. Producer surplus is the amount sellers are paid for a good minus the sellers’ cost of providing it (measured by the supply curve). It measures the benefit to sellers of participating in a market.It would be a good idea to remind students that there are circumstances when the market process does not lead to the most efficient outcome. Examples include situations such as when a firm (or buyer) has market power over price or when there areFigure 33. Figure 3 shows the supply and demand for turkey. The price of turkey is P, consumer surplus is CS, and producer surplus is PS. Producing more turkeys 1than the equilibrium quantity would lower total surplus because the value to the marginal buyer would be lower than the cost to the marginal seller on those additional units.Questions for Review1. The price a buyer is willing to pay, consumer surplus, and the demand curve are all closely related. The height of the demand curve represents the willingness to pay of the buyers. Consumer surplus is the area below the demand curve and above the price, which equals the price that each buyer is willing to pay minus the price actually paid.2. Sellers' costs, producer surplus, and the supply curve are all closely related. The height of the supply curve represents the costs of the sellers. Producer surplus is the area below the price and above the supply curve, which equals the price received minus each seller's costs of producing the good.Figure 43. Figure 4 shows producer and consumer surplus in a supply-and-demand diagram.4. An allocation of resources is efficient if it maximizes total surplus, the sum of consumer surplus and producer surplus. But efficiency may not be the only goal of economic policymakers; they may also be concerned about equitythe fairness of the distribution of well-being.5. The invisible hand of the marketplace guides the self-interest of buyers and sellers into promoting general economic well-being. Despite decentralized decision making and self-interested decision makers, free markets often lead to an efficient outcome.6. Two types of market failure are market power and externalities. Market power may cause market outcomes to be inefficient because firms may cause price and quantity to differ from the levels they would be under perfect competition, which keeps total surplus from being maximized. Externalities are side effects that are not taken into account by buyers and sellers. As a result, the free market does not maximize total surplus.Problems and Applications1. a. Consumer surplus is equal to willingness to pay minus the price paid. Therefore, Melissa’s willingness to pay must be $200 ($120 + $80).b. Her consumer surplus at a price of $90 would be $200 $90 = $110.c. If the price of an iPod was $250, Melissa would not have purchased one because the price is greater than her willingness to pay. Therefore, she would receive no consumer surplus.2. If an early freeze in California sours the lemon crop, the supply curve for lemons shifts to the left, as shown in Figure 5. The result is a rise in the price of lemons and a decline in consumer surplus from A + B + C to just A. So consumer surplus declines by the amount B + C.Figure 5 Figure 6In the market for lemonade, the higher cost of lemons reduces the supply of lemonade, as shown in Figure 6. The result is a rise in the price of lemonade and a decline in consumer surplus from D + E + F to just D, a loss of E + F. Note that an event that affects consumer surplus in one market oftenhas effects on consumer surplus in other markets.3. A rise in the demand for French bread leads to an increase in producer surplus in the market for French bread, as shown in Figure 7. The shift of the demand curve leads to an increased price, which increases producer surplusfrom area A to area A + B + C.Figure 7The increased quantity of French bread being sold increases the demandfor flour, as shown in Figure 8. As a result, the price of flour rises, increasing producer surplus from area D to D + E + F. Note that an event that affects producer surplus in one market leads to effects on producer surplus in related markets.Figure 84. a.Figure 9b. When the price of a bottle of water is $4, Bert buys two bottles of water. His consumer surplus is shown as area A in the figure. He values hisfirst bottle of water at $7, but pays only $4 for it, so has consumer surplus of $3. He values his second bottle of water at $5, but pays only $4 for it, so has consumer surplus of $1. Thus Bert’s total consumer surplus is $3 + $1 = $4, which is the area of A in the figure.c. When the price of a bottle of water falls from $4 to $2, Bert buys three bottles of water, an increase of one. His consumer surplus consists of both areas A and B in the figure, an increase in the amount of area B. He gets consumer surplus of $5 from the first bottle ($7 value minus $2 price), $3from the second bottle ($5 value minus $2 price), and $1 from the third bottle ($3 value minus $2 price), for a total consumer surplus of $9. Thus consumer surplus rises by $5 (which is the size of area B) when the price of a bottle of water falls from $4 to $2.5. a.Figure 10b. When the price of a bottle of water is $4, Ernie sells two bottles of water. His producer surplus is shown as area A in the figure. He receives $4 for his first bottle of water, but it costs only $1 to produce, so Ernie has producer surplus of $3. He also receives $4 for his second bottle of water, which costs $3 to produce, so he has producer surplus of $1. Thus Ernie’s total producer surplus is $3 + $1 = $4, which is the area of A in the figure.c. When the price of a bottle of water rises from $4 to $6, Ernie sells three bottles of water, an increase of one. His producer surplus consists of both areas A and B in the figure, an increase by the amount of area B. He gets producer surplus of $5 from the first bottle ($6 price minus $1 cost), $3 from the second bottle ($6 price minus $3 cost), and $1 from the third bottle ($6 price minus $5 price), for a total producer surplus of $9. Thus producer surplus rises by $5 (which is the size of area B) when the price of a bottle of water rises from $4 to $6.6. a. From Ernie’s supply schedule and Bert’s demand schedule, thean equilibrium quantity of two.b. At a price of $4, consumer surplus is $4 and producer surplus is $4, as shown in Problems 3 and 4 above. Total surplus is $4 + $4 = $8.c. If Ernie produced one less bottle, his producer surplus would decline to $3, as shown in Problem 4 above. If Bert consumed one less bottle, hisconsumer surplus would decline to $3, as shown in Problem 3 above. So total surplus would decline to $3 + $3 = $6.d. If Ernie produced one additional bottle of water, his cost would be $5, but the price is only $4, so his producer surplus would decline by $1. If Bert consumed one additional bottle of water, his value would be $3, but the price is $4, so his consumer surplus would decline by $1. So total surplus declines by $1 + $1 = $2.7. a. The effect of falling production costs in the market for stereos results in a shift to the right in the supply curve, as shown in Figure 11. As a result, the equilibrium price of stereos declines and the equilibriumquantity increases.Figure 11b. The decline in the price of stereos increases consumer surplus from area A to A + B + C + D, an increase in the amount B + C + D. Prior to the shift in supply, producer surplus was areas B + E (the area above the supply curve and below the price). After the shift in supply, producer surplus is areas E + F + G. So producer surplus changes by the amount F + G – B, which may be positive or negative. The increase in quantity increases producer surplus, while the decline in the price reduces producer surplus. Because consumer surplus rises by B + C + D and producer surplus rises by F + G – B, total surplus rises by C + D + F + G.c. If the supply of stereos is very elastic, then the shift of the supply curve benefits consumers most. To take the most dramatic case, suppose the supply curve were horizontal, as shown in Figure 12. Then there is no producer surplus at all. Consumers capture all the benefits of falling production costs, with consumer surplus rising from area A to area A + B.Figure 128. Figure 13 shows supply and demand curves for haircuts. Supply equals demand at a quantity of three haircuts and a price between $4 and $5. Firms A, C, and D should cut the hair of Ellen, Jerry, and Phil. Oprah’s willingnessto pay is too low and firm B’s costs are too high, so they do not participate. The maximum total surplus is the area between the demand and supply curves, which totals $11 ($8 value minus $2 cost for the first haircut, plus $7 value minus $3 cost for the second, plus $5 value minus $4 cost for the third).Figure 139. a. The effect of falling production costs in the market for computers results in a shift to the right in the supply curve, as shown in Figure 14. As a result, the equilibrium price of computers declines and the equilibrium quantity increases. The decline in the price of computers increases consumer surplus from area A to A + B + C + D, an increase in the amount B + C + D.Figure 14 Figure 15Prior to the shift in supply, producer surplus was areas B + E(the area above the supply curve and below the price). After theshift in supply, producer surplus is areas E + F + G. So producersurplus changes by the amount F + G – B, which may be positive ornegative. The increase in quantity increases producer surplus,while the decline in the price reduces producer surplus. Becauseconsumer surplus rises by B + C + D and producer surplus rises byF +G – B, total surplus rises by C + D + F + G.b. Because typewriters are substitutes for computers, the decline in the price of computers means that people substitute computers for typewriters, shifting the demand for typewriters to the left, as shown in Figure 15. The result is a decline in both the equilibrium price and equilibrium quantity of typewriters. Consumer surplus in the typewriter market changes from area A + B to A + C, a net change of C – B. Producer surplus changes from area C + D + E to area E, a net loss of C + D. Typewriter producers are sad about technological advances in computers because their producer surplus declines.c. Because software and computers are complements, the decline in the price and increase in the quantity of computers means that the demand for software increases, shifting the demand for software to the right, as shown in Figure 16. The result is an increase in both the price and quantity of software. Consumer surplus in the software market changes from B + C to A + B, a net change of A – C. Producer surplus changes from E to C + D + E, an increase of C + D, so software producers should be happy about the technological progress in computers.Figure 16d. Yes, this analysis helps explain why Bill Gates is one the world’s richest people, because his company produces a lot of software that is a complement with computers and there has been tremendous technological advance in computers.10. a. With Provider A, the cost of an extra minute is $0. WithProvider B, the cost of an extra minute is $1.b. With Provider A, my friend will purchase 150 minutes [= 150 –(50)(0)]. With Provider B, my friend would purchase 100 minutes [=150 – (50)(1)].c. With Provider A, he would pay $120. The cost would be $100 with Provider B.Figure 17d. Figure 17 shows the friend’s demand. With Provider A, he buys 150minutes and his consumer surplus is equal to (1/2)(3)(150) – 120= 105. With Provider B, his consumer surplus is equal to(1/2)(2)(100) = 100.e. I would recommend Provider A because he receives greater consumer surplus.11. a. Figure 18 illustrates the demand for medical care. If each procedure has a price of $100, quantity demanded will be Q1 procedures.Figure 18b. If consumers pay only $20 per procedure, the quantity demanded will be Qprocedures. Because the cost to society is $100, the number of procedures 2performed is too large to maximize total surplus. The quantity that maximizes total surplus is Q1 procedures, which is less than Q2.c. The use of medical care is excessive in the sense that consumers get procedures whose value is less than the cost of producing them. As a result, the economy’s total surplus is reduced.d. To prevent this excessive use, the consumer must bear the marginal cost of the procedure. But this would require eliminating insurance. Another possibility would be that the insurance company, which pays most of the marginal cost of the procedure ($80, in this case) could decide whether the procedure should be performed. But the insurance company does not get the benefits of the procedure, so its decisions may not reflect the value to the consumer.。

Chapter 1Problems and Applications1. a. A family deciding whether to buy a new car faces a tradeoff between the cost of thecar and other things they might want to buy. For example, buying the car mightmean they must give up going on vacation for the next two years. So the real costof the car is the family's opportunity cost in terms of what they must give up.b. For a member of Congress deciding whether to increase spending on national parks,the tradeoff is between parks and other spending items or tax cuts. If more moneygoes into the park system, that may mean less spending on national defense or on thepolice force. Or, instead of spending more money on the park system, taxes couldbe reduced.c. When a company president decides whether to open a new factory, the decision isbased on whether the new factory will increase the firm's profits compared to otheralternatives. For example, the company could upgrade existing equipment orexpand existing factories. The bottom line is: Which method of expandingproduction will increase profit the most?d. In deciding how much to prepare for class, a professor faces a tradeoff between thevalue of improving the quality of the lecture compared to other things she could dowith her time, such as working on additional research.2. When the benefits of something are psychological, such as going on a vacation, it isn't easy tocompare benefits to costs to determine if it's worth doing. But there are two ways to think about the benefits. One is to compare the vacation with what you would do in its place. If you didn't go on vacation, would you buy something like a new set of golf clubs? Then you can decide if you'd rather have the new clubs or the vacation. A second way is to think about how much work you had to do to earn the money to pay for the vacation; then you can decide if the psychological benefits of the vacation were worth the psychological cost of working.3. If you are thinking of going skiing instead of working at your part-time job, the cost of skiingincludes its monetary and time costs, plus the opportunity cost of the wages you're giving up by not working. If the choice is between skiing and going to the library to study, then the cost of skiing is its monetary and time costs plus the cost to you of getting a lower grade in your course.4. If you spend $100 now instead of investing it for a year and earning 5 percent interest, youare giving up the opportunity to spend $105 a year from now. The idea that money has a time value is the basis for the field of finance, the subfield of economics that has to do with prices of financial instruments like stocks and bonds.5. The fact that you've already sunk $5 million isn't relevant to your decision anymore, sincethat money is gone. What matters now is the chance to earn profits at the margin. If you spend another $1 million and can generate sales of $3 million, you'll earn $2 million in marginal profit, so you should do so. You are right to think that the project has lost a total of $3 million ($6 million in costs and only $3 million in revenue) and you shouldn't have started it. That's true, but if you don't spend the additional $1 million, you won't have any sales and your losses will be $5 million. So what matters is not the total profit, but the profit you can earn at the margin. In fact, you'd pay up to $3 million to complete development; any more than that, and you won't be increasing profit at the margin.6. Harry suggests looking at whether productivity would rise or fall. Productivity is certainlyimportant, since the more productive workers are, the lower the cost per gallon of potion.Harry wants to look at average cost. But both Harry and Ron are missing the other side of the equation−revenue. A firm wants to maximize its profits, so it needs to examine both costs and revenues. Thus, Hermione is right−it’s best to examine whether the extra revenue would exceed the extra costs. In addition, Hermione is the only one who’s thinking at the margin.7. a. Since a person gets fewer after-tax Social Security benefits the greater is his or herincome, there's an incentive not to save for retirement. If you save a lot, yourincome will be higher, and you won't get as much after-tax Social Security income assomeone who didn't save as much. The unintended consequence of the taxation ofSocial Security benefits is to reduce saving; yet the Social Security system arosebecause of worries that people wouldn’t save enough for retirement.b. For the same reason, you'll tend not to work (or not work as much) after age 65.The more you work, the lower your after-tax Social Security benefits will be. Thusthe taxation of Social Security benefits discourages work effort after age 65.8. a. When welfare recipients who are able to work have their benefits cut off after twoyears, they have greater incentive to find jobs than if their benefits were to lastforever.b. The loss of benefits means that someone who can't find a job will get no income atall, so the distribution of income will become less equal. But the economy will bemore efficient, since welfare recipients have a greater incentive to find jobs. Thusthe change in the law is one that increases efficiency but reduces equity.9. By specializing in each task, you and your roommate can finish the chores more quickly. Ifyou divided each task equally, it would take you more time to cook than it would take your roommate, and it would take him more time to clean than it would take you. By specializing, you reduce the total time spent on chores.Similarly, countries can specialize and trade, making both better off. For example, suppose it takes Spanish workers less time to make clothes than French workers, and French workers can make wine more efficiently than Spanish workers. Then Spain and France can both benefit if Spanish workers produce all the clothes and French workers produce all the wine, and they exchange some wine for some clothes.10. a. Being a central planner is tough! To produce the right number of CDs by the rightartists and deliver them to the right people requires an enormous amount ofinformation. You need to know about production techniques and costs in the CDindustry. You need to know each person's musical tastes and which artists theywant to hear. If you make the wrong decisions, you'll be producing too many CDsby artists that people don't want to hear, and not enough by others.b. Your decisions about how many CDs to produce carry over to other decisions. Youhave to make the right number of CD players for people to use. If you make toomany CDs and not enough cassette tapes, people with cassette players will be stuckwith CDs they can't play. The probability of making mistakes is very high. Youwill also be faced with tough choices about the music industry compared to otherparts of the economy. If you produce more sports equipment, you'll have fewerresources for making CDs. So all decisions about the economy influence yourdecisions about CD production.11. a. Efficiency: The market failure comes from the monopoly by the cable TV firm.b. Equityc. Efficiency: An externality arises because secondhand smoke harms nonsmokers.d. Efficiency: The market failure occurs because of Standard Oil's monopoly power.e. Equityf. Efficiency: There's an externality because of accidents caused by drunk drivers.12. a. If everyone were guaranteed the best health care possible, much more of our nation'soutput would be devoted to medical care than is now the case. Would that beefficient? If you think that currently doctors form a monopoly and restrict healthcare to keep their incomes high, you might think efficiency would increase byproviding more health care. But more likely, if the government mandated increasedspending on health care, the economy would be less efficient because it would givepeople more health care than they would choose to pay for. From the point of viewof equity, if poor people are less likely to have adequate health care, providing morehealth care would represent an improvement. Each person would have a more evenslice of the economic pie, though the pie would consist of more health care and lessof other goods.b. When workers are laid off, equity considerations argue for the unemploymentbenefits system to provide them with some income until they can find new jobs.After all, no one plans to be laid off, so unemployment benefits are a form ofinsurance. But there’s an efficiency problem why work if you can get income fordoing nothing? The economy isn’t o perating efficiently if people remainunemployed for a long time, and unemployment benefits encourage unemployment.Thus, there’s a tradeoff between equity and efficiency. The more generous areunemployment benefits, the less income is lost by an unemployed person, but themore that person is encouraged to remain unemployed. So greater equity reducesefficiency.13. Since average income in the United States has roughly doubled every 35 years, we are likelyto have a better standard of living than our parents, and a much better standard of living than our grandparents. This is mainly the result of increased productivity, so that an hour of work produces more goods and services than it used to. Thus incomes have continuously risen over time, as has the standard of living.14. If Americans save more and it leads to more spending on factories, there will be an increasein production and productivity, since the same number of workers will have more equipment to work with. The benefits from higher productivity will go to both the workers, who will get paid more since they're producing more, and the factory owners, who will get a return on their investments. There's no such thing as a free lunch, though, because when people save more, they're giving up spending. They get higher incomes at the cost of buying fewer goods.15. a. If people have more money, they're probably going to spend more on goods andservices.b. If prices are sticky, and people spend more on goods and services, then output mayincrease, as producers increase output to meet the higher demand rather than raisingprices.c. If prices can adjust, then people's higher spending will be matched with increasedprices, and output won't rise.16. To make an intelligent decision about whether to reduce inflation, a policymaker would needto know what causes inflation and unemployment, as well as what determines the tradeoff between them. Because prices are sticky, an attempt to reduce inflation will lead to higher unemployment. A policymaker thus faces a tradeoff between the benefits of lower inflation compared to the cost of higher unemployment.Chapter 2Problems and Applications1. Many answers are possible.2. a. Steel is a fairly uniform commodity, though some firms produce steel of inferiorquality.b. Novels are each unique, so they are quite distinguishable.c. Wheat produced by one farmer is completely indistinguishable from wheat producedby another.d. Fast food is more distinguishable than steel or wheat, but certainly not as much asnovels.3. See Figure 2-5; the four transactions are shown.Figure 2-54. a. Figure 2-6 shows a production possibilities frontier between guns and butter. It isbowed out because when most of the economy’s resources are being used to pr oducebutter, the frontier is steep and when most of the economy’s resources are being usedto produce guns, the frontier is very flat. When the economy is producing a lot ofguns, workers and machines best suited to making butter are being used to makeguns, so each unit of guns given up yields a large increase in the production of butter;thus the production possibilities frontier is flat. When the economy is producing alot of butter, workers and machines best suited to making guns are being used tomake butter, so each unit of guns given up yields a small increase in the productionof butter; thus the production possibilities frontier is steep.b. Point A is impossible for the economy to achieve; it is outside the productionpossibilities frontier. Point B is feasible but inefficient because it’s inside theproduction possibilities frontier.Figure 2-6c. The Hawks might choose a point like H, with many guns and not much butter. TheDoves might choose a point like D, with a lot of butter and few guns.d. If both Hawks and Doves reduced their desired quantity of guns by the same amount,the Hawks would get a bigger peace dividend because the production possibilitiesfrontier is much steeper at point H than at point D. As a result, the reduction of agiven number of guns, starting at point H, leads to a much larger increase in thequantity of butter produced than when starting at point D.5. See Figure 2-7. The shape and position of the frontier depend on how costly it is to maintaina clean environment the productivity of the environmental industry. Gains inenvironmental productivity, such as the development of a no-emission auto engine, lead to shifts of the production-possibilities frontier, like the shift from PPF1 to PPF2 shown in the figure.Figure 2-76. a. A family’s decision about how much income to save is microeconomics.b. The effect of government regulations on auto emissions is microeconomics.c. The impact of higher saving on economic growth is macroeconomics.d. A f irm’s decision about how many workers to hire is microeconomics.e. The relationship between the inflation rate and changes in the quantity of money ismacroeconomics.7. a. The statement that society faces a short-run tradeoff between inflation andunemployment is a positive statement. It deals with how the economy is, not how itshould be. Since economists have examined data and found that there’s a short-runnegative relationship between inflation and unemployment, the statement is a fact,thus it’s a positive statement.b. The statement that a reduction in the rate of growth of money will reduce the rate ofinflation is a positive statement. Economists have found that money growth andinflation are very closely related. The statement thus tells how the world is, and soit is a positive statement.c. The statement that the Federal Reserve should reduce the rate of growth of money isa normative statement. It states an opinion about something that should be done,not how the world is.d. The statement that society ought to require welfare recipients to look for jobs is anormative statement. It doesn’t state a fact about how the world is. Instead, it is astatement of how the world should be and is thus a normative statement.e. The statement that lower tax rates encourage more work and more saving is apositive statement. Economists have studied the relationship between tax rates andwork, as well as the relationship between tax rates and saving. They’ve found anegative relationship in both cases. So the statement reflects how the world is, andis thus a positive statement.8. Two of the statements in Table 2-2 are clearly normative. They are: “5. If the federalbudget is to be balanced, it should be done over the business cycle rather th an yearly” and “9.The government should restructure the welfare system along the lines of a ‘negative income tax.’” Both are suggestions of changes that should be made, rather than statements of fact, so they are clearly normative statements.The other statements in the table are positive. All the statements concern how the world is, not how the world should be. Note that in all cases, even though they’re statements of fact, fewer than 100 percent of economists agree with them. You could say that positive statements are statements of fact about how the world is, but not everyone agrees about what the facts are.9. As the president, you’d be interested in both the positive and normative views of economists,but you’d probably be most interested in their positive views. Economists are on your staff to provide their expertise about how the economy works. They know many facts about the economy and the interaction of different sectors. So you’d be most likely to call on them about questions of fact posit ive analysis. Since you’re the president, you’re the one who has the make the normative statements as to what should be done, with an eye to the political consequences. The normative statements made by economists represent their views, not necessarily ei ther your’s or the electorate’s.10. There are many possible answers.11. As of this writing, the chairman of the Federal Reserve is Alan Greenspan, the chair of theCouncil of Economic Advisers is Martin N. Baily, and the secretary of the treasury is Larry Summers.12. There are many possible answers.13. As time goes on, you might expect economists to disagree less about public policy becausethey’ll have opportunities to observe different policies that are put into place. As new policies are tried, their results will become known, and they can be evaluated better. It’s likely that the disagreement about them will be reduced after they’ve been tried in practice.For example, many economists thought that wage and price controls would be a good idea for keeping inflation under control, while others thought it was a bad idea. But when the controls were tried in the early 1970s, the results were disastrous. The controls interfered with the invisible hand of the marketplace and shortages developed in many products. As a result, most economists are now convinced that wage and price controls are a bad idea for controlling inflation.But it’s unlikely that the differences between economists will ever be completely eliminated.Economists differ on too many aspects of how the world works. Plus, even as some policies get tried out and are either accepted or rejected, creative economists keep coming up with new ideas.Chapter 3Problems and Applications1. In the text example of the farmer and the rancher, the farmer’s opportunity cost of producingone pound of meat is two pounds of potatoes because for every 20 hours of work, he can produce one pound of meat or two pounds of potatoes. With limited time at his disposal, producing a pound of meat means he gives up the opportunity to produce two pounds of potatoes. Similarly, the rancher’s opportunity cost of producing one pound of meat is 1/8 pound of potatoes because for every hour of work, she can produce one pound of meat or 1/8 pound of potatoes. With limited time at her disposal, producing a pound of meat means she gives up the opportunity to produce 1/8 pound of potatoes.2. a. See Figure 3-2. If Maria spends all five hours studying economics, she can read100 pages, so that is the vertical intercept of the production possibilities frontier. Ifshe spends all five hours studying sociology, she can read 250 pages, so that is thehorizontal intercept. The time costs are constant, so the production possibilitiesfrontier is a straight line.Figure 3-2b. It takes Maria two hours to read 100 pages of sociology. In that time, she couldread 40 pages of economics. So the opportunity cost of 100 pages of sociology is40 pages of economics.3. a.Workers needed to make:One Car One Ton of GrainU.S. 1/4 1/10Japan 1/4 1/5b. See Figure 3-3. With 100 million workers and four cars per worker, if eithereconomy were devoted completely to cars, it could make 400 million cars. Since aU.S. worker can produce 10 tons of grain, if the U.S. produced only grain it wouldproduce 1,000 million tons. Since a Japanese worker can produce 5 tons of grain, ifJapan produced only grain it would produce 500 million tons. These are theintercepts of the production possibilities frontiers shown in the figure. Note thatsince the tradeoff between cars and grain is constant, the production possibilitiesfrontier is a straight line.Figure 3-3c. Since a U.S. worker produces either 4 cars or 10 tons of grain, the opportunity cost of1 car is 2½ tons of grain, which is 10 divided by 4. Since a Japanese workerproduces either 4 cars or 5 tons of grain, the opportunity cost of 1 car is1 1/4 tons of grain, which is 5 divided by 4. Similarly, the U.S. opportunity cost of1 ton of grain is 2/5 cars (4 divided by 10) and the Japanese opportunity cost of 1 tonof grain is 4/5 cars (4 divided by 5). This gives the following table:Opportunity Cost of:1 Car (in terms of tons ofgrain given up) 1 Ton of Grain (in terms ofcars given up)U.S. 2 1/2 2/5Japan 1 1/4 4/5d. Neither country has an absolute advantage in producing cars, since they’re equallyproductive (the same output per worker); the U.S. has an absolute advantage in producing grain, since it’s more productive (greater output per worker).e. Japan has a comparative advantage in producing cars, since it has a loweropportunity cost in terms of grain given up. The U.S. has a comparative advantage in producing grain, since it has a lower opportunity cost in terms of cars given up. f. With half the workers in each country producing each of the goods, the U.S. wouldproduce 200 million cars (that’s 50 million workers times 4 cars each) and 500 million tons of grain (50 million workers times 10 tons each). Japan would produce 200 million cars (50 million workers times 4 cars each) and 250 million tons of grain(50 million workers times 5 tons each).g. From any situation with no trade, in which each country is producing some cars andsome grain, suppose the U.S. changed 1 worker from producing cars to producinggrain. That worker would produce 4 fewer cars and 10 additional tons of grain.Then suppose the U.S. offers to trade 7 tons of grain to Japan for 4 cars. The U.S.will do this because it values 4 cars at 10 tons of grain, so it will be better off if thetrade goes through. Suppose Japan changes 1 worker from producing grain toproducing cars. That worker would produce 4 more cars and 5 fewer tons of grain.Japan will take the trade because it values 4 cars at 5 tons of grain, so it will be betteroff. With the trade and the change of 1 worker in both the U.S. and Japan, eachcountry gets the same amount of cars as before and both get additional tons of grain(3 for the U.S. and 2 for Japan). Thus by trading and changing their production,both countries are better off.4. a. Pat’s opportunity cost of making a pizza is 1/2 gallon of root beer, since she couldbrew 1/2 gallon in the time (2 hours) it takes her to make a pizza. Pat has anabsolute advantage in making pizza since she can make one in two hours, while ittakes Kris four hours. Kris’s opportunity cost of making a pizza is 2/3 gallons ofroot beer, since she could brew 2/3 of a gallon in the time (4 hours) it takes her tomake a pizza. Since Pa t’s opportunity cost of making pizza is less than Kris’s, Pathas a comparative advantage in making pizza.b. Since Pat has a comparative advantage in making pizza, she will make pizza andexchange it for root beer that Kris makes.c. The highest price of pizza in terms of root beer that will make both roommates betteroff is 2/3 gallons of root beer. If the price were higher than that, then Kris wouldprefer making her own pizza (at an opportunity cost of 2/3 gallons of root beer)rather than trading for pizza that Pat makes. The lowest price of pizza in terms ofroot beer that will make both roommates better off is 1/2 gallon of root beer. If theprice were lower than that, then Pat would prefer making her own root beer (she canmake 1/2 gallon of root beer instead of making a pizza) rather than trading for rootbeer that Kris makes.5. a. Since a Canadian worker can make either two cars a year or 30 bushels of wheat, theopportunity cost of a car is 15 bushels of wheat. Similarly, the opportunity cost of abushel of wheat is 1/15 of a car. The opportunity costs are the reciprocals of eachother.b. See Figure 3-4. If all 10 million workers produce two cars each, they produce atotal of 20 million cars, which is the vertical intercept of the production possibilitiesfrontier. If all 10 million workers produce 30 bushels of wheat each, they produce atotal of 300 million bushels, which is the horizontal intercept of the productionpossibilities frontier. Since the tradeoff between cars and wheat is always the same,the production possibilities frontier is a straight line.If Canada chooses to consume 10 million cars, it will need 5 million workers devotedto car production. That leaves 5 million workers to produce wheat, who willproduce a total of 150 million bushels (5 million workers times 30 bushels perworker). This is shown as point A on Figure 3-4.c. If the United States buys 10 million cars from Canada and Canada continues toconsume 10 million cars, then Canada will need to produce a total of 20 million cars.So Canada will be producing at the vertical intercept of the production possibilitiesfrontier. But if Canada gets 20 bushels of wheat per car, it will be able to consume200 million bushels of wheat, along with the 10 million cars. This is shown as pointB in the figure. Canada should accept the deal because it gets the same number ofcars and 50 million more bushes of wheat.Figure 3-46. Though the professor could do both writing and data collection faster than the student (that is,he has an absolute advantage in both), his time is limited. If the professor’s comparative advantage is in writing, it makes sense for him to pay a student to collect the data, since that’s the student’s comparative advantage.7. a. English workers have an absolute advantage over Scottish workers in producingscones, since English workers produce more scones per hour (50 vs. 40). Scottishworkers have an absolute advantage over English workers in producing sweaters,since Scottish workers produce more sweaters per hour (2 vs. 1). Comparativeadvantage runs the same way. English workers, who have an opportunity cost of1/50 sweaters per scone (1 sweater per hour divided by 50 scones per hour), have acomparative advantage in scone production over Scottish workers, who have anopportunity cost of 1/20 sweater per scone (2 sweaters per hour divided by 40 sconesper hour). Scottish workers, who have an opportunity cost of 20 scones per sweater(40 scones per hour divided by 2 sweaters per hour), have a comparative advantagein sweater production over English workers, who have an opportunity cost of 50scones per sweater (50 scones per hour divided by 1 sweater per hour).b. If England and Scotland decide to trade, Scotland will produce sweaters and tradethem for scones produced in England. A trade with a price between 20 and 50scones per sweater will benefit both countries, as they’ll be getting the traded good ata lower price than their opportunity cost of producing the good in their own country.c. Even if a Scottish worker produced just one sweater per hour, the countries wouldstill gain from trade, because Scotland would still have a comparative advantage inproducing sweaters. Its opportunity cost for sweaters would be higher than before(40 scones per sweater, instead of 20 scones per sweater before). But there are stillgains from trade since England has a higher opportunity cost (50 scones per sweater).。

Chapter 8 Application: The Cost of Taxation1. Deadweight loss is the ( )a.reduction in total surplus that results from a tax.b.loss of profit to businesses when a tax is imposed.c.reduction in consumer surplus when a tax is placed on buyers.d.decline in government revenue when taxes are reduced in a market.2. Deadweight loss ( )a.means that there is a loss to some individuals without a corresponding gain toothers.b.is not really a loss to society because what one individual loses anotherindividual gains.c.can be eliminated by sales taxes.d.can occur even if output is at the efficient level.3. Deadweight loss measures ( )a.the amount people would pay to gain an additional unit of a good.b.the loss from economic inefficiency.c.the difference between two efficient situations.d.the amount required to compensate producers for lost surplus due to theimposition of a sales tax.4. A per-unit tax on a good creates deadweight loss because ( )a.it makes demand more inelastic.b.it makes supply more elastic.c.by increasing the price consumers pay, and reducing the price sellers receive,it prevents some mutually beneficial trades.d.the government wastes the tax revenues it receives.5. If the supply curve is perfectly elastic, a per-unit tax ( )a.does not create deadweight loss.b.does not reduce consumer surplus.c.does not reduce producer surplus.d.reduces consumer surplus but increases producer surplus.6. Suppose demand for electricity is perfectly inelastic. A tax on electricity will be ( )a.split between producers and consumers in equal shares.b.paid only by producers.c.paid only by consumers.d.split between producers and consumers in unequal shares.7. A per-unit tax on a good will ( )a.result in a decrease in total surplus.b.generally hurt only consumer surplus.c.generally hurt only producer surplus.d.result in an increase in total surplus.8. To fully understand how taxes affect economic well-being, we must ( )a.assume that economic well-being is not affected if all tax revenue is spent ongoods and services for the American public.b.know the dollar amount of all taxes raised in the country each year.pare the reduced welfare of buyers and sellers to the amount ofgovernment revenue raised.pare the expenditures of the 50 state governments with that of the federalgovernment.9. When a tax is imposed on a good we know that the losses to buyers and sellers ( )a.are equal to the revenue raised by the government.b.are less than the revenue raised by the government.c.exceed the revenue raised by the government.d.cannot be compared to the tax revenue raised by the government since theamount of the tax will vary from good to good.10. When evaluating the size of the deadweight loss due to a tax we know that the ( )a.greater the elasticities of supply and demand, the greater the deadweight loss.b.smaller the elasticities of supply and demand, the greater the deadweight loss.c.smaller the decrease in both quantity demanded and quantity supplied, thegreater the deadweight loss.d.primary factor that determines the size of the deadweight loss in thepercentage the tax is of price.11. Assume that the demand for pretzels is relatively inelastic and that the demand for potato chips is relatively elastic. If the same percentage tax were placed on both goods, the tax on which product would create a larger deadweight loss? ( )a.the tax on pretzels.b.the tax on potato chips.c.The taxes would create the same amount of deadweight loss.d.This question is impossible to answer without knowing the price of bothpretzels and potato chips.12. The deadweight economic loss from taxes ( )a.does not depend on tax rates.b.is higher when tax rates are higher than when tax rates are lower.c.is lower when tax rates are higher than when tax rates are lower.d.does not depend on the slope of the demand curve.13. The greater the elasticities of demand and supply the ( )a.smaller the deadweight loss from a tax.b.less intrusive a tax will be on a market.c.greater the deadweight loss from a tax.d.more equitable the distribution of a tax between buyers and sellers.14. When the size of a tax is doubled, the deadweight loss from the tax ( )a.increases by the size of the tax.b.doubles.c.remains constant.d.increases by a factor of four.15. If the size of a tax increases, tax revenue will ( )a.increase.b.decrease.c.remain the same.d.increase, then decrease.。

CHAPTER 2THE BASICS OF SUPPLY AND DEMANDREVIEW QUESTIONS1. Suppose that unusually hot weather causes the demand curve for ice cream to shift to the right。

Why will the price of ice cream rise to a new market—clearing level?Assume the supply curve is fixed。

The unusually hot weather will cause a rightwardshift in the demand curve，creating short—run excess demand at the current price。

Consumers will begin to bid against each other for the ice cream，putting upwardpressure on the price。

The price of ice cream will rise until the quantity demandedand the quantity supplied are equal.Figure 2.110.In a discussion of tuition rates，a university official argues that the demand for admission is completely price inelastic。

As evidence she notes that while the university has doubled its tuition (in real terms）over the past 15 years, neither the number nor quality of students applying has decreased. Would you accept this argument? Explain briefly. （Hint：The official makes an assertion about the demand for admission，but does she actually observe a demand curve? What else could be going on？）If demand is fixed，the individual firm (a university) may determine the shape of thedemand curve it faces by raising the price and observing the change in quantity sold。