微观经济学试题英文版

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 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). The cost-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 became a 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 or under-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 thecost-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。

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.。

精品文档Managerial EconomicsPart 1:1. The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that:a. good A is a normal good.b. good B is an inferior good.c. goods A and B are substitutes.d. goods A and B are complements.e. none of the above.Choose: d) the definition os complements2. Joe's budget line is 15F + 45C = 900. When Joe chooses his most preferred market basket, he buys 10 units of C. therefore, he also buys :a. 10 units of Fb. 30 units of Fc. 50 units of Fd. 60 units of Fe. None of the aboveChoose: b) We assume that Joe will spend all his income. If C = 10, then 15F =900 – 45(10) =450, so F = 450/15 =30.3. Kim only buys coffee and compact discs. Coffee costs $0.60 per cup, and CDs cost $12.00 each. She has $18 per week to spend on these two goods. If Kim is maximizing her utility, her marginal rate of substitution of coffee for CDs is:a. 0.05b. 20c. 18d. 1.50e. None of the aboveChoose: a) At Kim's most preferred market basket, her MRS equals the price ratio (Pcoffee/PCD), which equals 0.6/12 or 0.05.4. The bandwagon effect corresponds best to which of the following?a. snob effect.b. external economy.c. negative network externality.d. positive network externality.Choose: d)5. A Giffen gooda. is always the same as an inferior good.b. is the special subset of inferior goods in which the substitution effect dominates the income effect.c. is the special subset of inferior goods in which the income effect dominates the substitution effect.d. must have a downward sloping demand curve.Choose: c) the definition of Giffen good6. An Engel curve for a good has a positive slope if the good is :a. an inferior good.b. a Giffen good.c. a normal good. d. a, b, and c are true.e. None of the above is true.Choose: c) Inferior and Giffen goods have negatively sloped Engel curves.7. The price of beef and quantity of beef traded are P* and Q*, respectively. Given this information, consumer surplus is the area:a. 0BCQ*b. ABCc. ACP*d. CBP*e. 0ACQ*Choose: d)Consumer surplus is the area between the demand line and the price.8. In Figure 1, holding income constant, what change must have occurred to rotate the budget line from the old line(1) to the new line(2)?Figure 1a. The price of Coke fellb. The price of pizza fellc. The price of pizza rosed. The price of Coke went upe. b and cChoose: b) The horizontal intercept, I/PC, is unchanged, which implies that PC could not have changed (holding income constant). Since the slope is PP/PC, the slope change means that the price of pizza must have fallen. This can also be seen intuitively from Figure 1, since the consumer can now buy more pizza than before if he spends all his income on pizza.9. Andy buys 10 pounds of onions per month when the price is $0.75 per pound. If the price falls to $0.50 per pound, he buys 30 pounds of onions. What is his arc elasticity of demand over this price range?a. - 1.33b.–2c.–2.5d. - 6e. None of the above is correct. Choose: c) Using the arc elasticity formula,5.22)1030(2)75.050.0()75.050.0()1030(-=÷+÷⨯⨯--=⨯∆∆=Q P P Q EP The next two questions refer to the following information: Opie and Gomer are theonly two consumers in the video cassette rental market in the Mayberry. Their demand curves per week are pictured in Figure 2.10. If rentals cost $2.50 each, the total quantity demanded each week in the market is :a. 3b. 6c. 15d. 10e. None of the above is correct.Choose: b) Add horizontally to get the market demand curve. At P = $2.50, QO = 3 and QG = 3 for a total of 6 units demanded.11. For a decrease in price from $2.50 to $1.50, market demand is :a. elastic.b. unit elastic. c. inelastic.d. perfectly inelastic.e. More information is needed. Choose: a) Demand is price elastic:EP = %ΔQ/%Δ(a)12. As president and CEO of MegaWorld industries, you must decide on some very risky alternative investments:a. A.b. B.c. C.d. D.e. EChoose: b) Ea=2 Eb=6.8 Ec=0 Ed=6 Ee=613. An individual with a constant marginal utility of income will bea. risk averse.b. risk neutral.c. risk loving.d. insufficient information for a decision.Choose: b)An individual with a constant marginal utility of income is risk neutral.14. In the figure below, what is true about the two jobs?a.Job 1 has a lower standard deviation than Job 2.b.All outcomes in both jobs have the same probability of occurrence.c. A risk-averse person would prefer Job 2.d. A risk-neutral person would prefer Job 1.e.Job 1 has a higher expected income than Job 2.Choose: a) Job 1 has a lower standard deviation than Job 2. Expected income of Job 1 equals to Job 2.Part 2:The demand curves for steak, eggs, and hot dogs are given in the table below. The current price of steak is $5. The price of eggs is $2.50, and the price of hot dogs is $0.75. Fill in the remaining columns of the table using this information.Solution:Steak and eggs are complements. Steak and hotdogs and eggs and hotdogs are substitutes.Part 3:Draw indifference curves to represent the following descriptions of consumer preferences:a. I can’t taste the difference between ap ple and grape jelly, but I likethem both.b. I only like grape jelly and never eat apple jelly.c. Apple and grape jelly are better mixed, although I don’t care too much about theproportions.Answer:a) See Figure 7(a). Since the consumer can not tell the difference between the two flavors, all he would care about is the total amount of jelly he has.b) See Figure 7(b). An increase in the amount of apple jelly does not affect the consumer since he never eats it.c) See Figure 7(c). Here, a mixed bundle is better than an extreme one, but the consumer is willing to trade off the different flavors.Figure 7Part 4:There are reasons other than fads, fashions, and consumer insecurity for bandwagon and snob effects. Various types of externalities in the consumption of certain goods also exist. Explain which these effects (bandwagon or snob) might be present in the following cases:a. A restaurant that is often crowdedb. A personal computer software productc. A rock concertAnswer:Ounces of Grape Jelly Ounces of Apple Jelly (a) Ounces of Grape Jelly Ounces of Apple Jelly(b) (c) Ounces of Grape Jelly Ounces ofApple Jellya) A price decrease will attract more customers, but the crowding(longer lines,poorer service) will discourage others. This would resemble a snob effect. b) The more people you expect to buy a software product, the more likely you canfind another experienced user to ask questions about it. Also, the more likely it is that a computer bookstore will carry publications about how to use the software. Thus, we would expect to see a bandwagon effect.c) Here, crowding might discourage some customers. But, since part of the enjoyment of a concert is seeing the band with other fans, we might observe a bandwagon effect.Part 5:Tom Wilson is the operations manager for Bi-Corp, a real estate investment firm. Tom must decide if Bi-Corp is to invest in a strip mall in a northeast metropolitan area. If the shopping center is highly successful, after tax profits will be $100,000 per year. Moderate success would yield an annual profit of $50,000, while the project will lose $10,000 per year if it is unsuccessful. Past experience suggests that there is a 40% chance that the project will be highly successful, a 40% chance of moderate success, and a 20% probability that the project will be unsuccessful. a. Calculate the expected value and standard deviation of profit. b. The project requires an $800,000 investment. If Bi-Corp has an 8% opportunity coston invested funds of similar riskiness, should the project be undertaken? Solution:a.Expected Value∑==n1i ^i ^i P ππ50,000 .4 20,000 -10,000 .2 -2,000Standard deviation100,000 42,000, 764,000,000 705,600,00050,000 -8,000 64,000,000 25,600,000 -10,000 -68,000 4,624,000,000 924,800,000b.Bio-Corp's opportunity cost is 8% of 800,000 or 0.08 x 800,000 = 64,000.The expected value of the project is less than the opportunity cost. Bi-Corp should not undertake the project.。

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。

精品文档-可编辑内蒙古农业大学微观经济学课程测试试卷（A ）P l e a s e p r i n t . I f t h e a n s w e r i s u n r e c o g n i z a b l e , i t w i l l b e c o u n t e d a s w r o n g a n s w e r .Y o u s h o u l d a n s w e r i n E n g l i s h o r C h i n e s e , n u m b e r s , o r g r a p h s .Ⅰ. C o n c e p t s （3 p o i n t s e a c h , t o t a l 15 p o i n t s ）1. O p p o r t u n i t y c o s t2. E x t e r n a l i t y3. D e a d w e i g h t l o s s4. C o m p e t i t i v e m a r k e t5. D i m i n i s h i n g m a r g i n a l p r o d u c tⅡ. T r u e o r F a l s e Q u e s t i o n s (2 p o i n t s e a c h ，t o t a l 20 p o i n t s )( f ) 1.I f a p p l e a n d o r a n g e a r e s u b s t i t u t e s , w h e n p r i c e o f a p p l e i n c r e a s e s , t h e n t h e d e m a n d f o r o r a n g e d e c r e a s e s .(f)2.T h e p r i c e e l a s t i c i t y o f d e m a n d r e m a i n s c o n s t a n t a l o n g a l i n e a r d e m a n d c u r v e.(t)3.W h e n p r i c e c e i l i n g i s b e l o w e q u i l i b r i u m p r i c e i n a c o m p e t i t i v e m a r k e t,t h e p r i c e c e i l i n g i s b i n d i n g,a n d t h e r e i s s h o r t a g e i n t h e m a r k e t.(t)4.T o t a l s u r p l u s i s t h e v a l u e s t o b u y e r s m i n u s t h e c o s t t o s e l l e r s.(f)5.W h e n t a x e d i s l e v i e d o n t h e g o o d i n a c o m p e t i t i v e m a r k e t, t h e t a x r e v e n u e g o t b y t h e g o v e r n m e n t e q u a l s t h e f a l l i n p r o d u c e r a n d c o n s u m e r s u r p l u s.(f)6.I f t h e w o r l d p r i c e o f a g o o d e x c e e d s t h e d o m e s t i c p r i c e, t h e c o u n t r y s h o u l d i m p o r t t h e g o o d i n s t e a d t o e x p o r t i t. (t)7.I n t h e p r e s e n c e o f a n e g a t i v e e x t e r n a l i t y,Qi so p t i m u m.t h e r e f o r e l a r g e r t h a n t h e Qm a r k e t(f)8.P r i c e a l w a y s e q u a l s t o m a r g i n a l r e v e n u e f o r a l l k i n d s o f f i r m s.(t)9.D e m a n d c u r v e f o r a m o n o p o l y f i r m i s t h e m a r k e t d e m a n d c u r v e.(f)10.I n t h e l o n g r u n,m o n o p o l i s t i c c o m p e t i t i v e f i r m s p r o d u c e a t t h e i r l o w e s t a v e r a g e t o t a l c o s t.Ⅲ.S i n g l e C h o i c e Q u e s t i o n s(2p o i n t s e a c h，t o t a l20p o i n t s)(d)1.I f t h e c r o s s-p r i c e e l a s t i c i t y o f d e m a n d f o r t w o g o o d s i s n e g a t i v e,t h e s e t w o g o o d a r e?A.L u x u r y g o o d s.B.N e c e s s i t i e s.C.S u b s t i t u t e s.D.C o m p l e m e n t s.(a)2.A l t h o u g h b u y e r s a n d s e l l e r s s h a r e t h e b u r d e n o f t a x t o g e t h e r,s e l l e r s s h a r e m o r e i f t h e g o o d i s________A.F o o d.B.C l o t h e s.C.H o u s i n g.D.E n t e r t a i n m e n t g o o d.(c)3.C o n s u m e r s u r p l u s i s t h e a r e a＿＿＿＿A.A b o v e t h e s u p p l y c u r v e a n d b e l o w t h e p r i c e.B.B e l o w t h e s u p p l y c u r v e a n d b e l o w t h e p r i c eC.B e l o w t h e d e m a n d c u r v e a n d a b o v e t h e p r i c eD.B e l o w t h e d e m a n d c u r v e a n d b e l o w t h e p r i c e(a)4.I f w e d o u b l e t h e s i z e o f t a x u n d e r t h e p e r f e c t l y c o m p e t i t i v e m a r k e t,s o t h e d e a d w e i g h t l o s s_____________A.I s f o u r t i m e s a s t h e o r i g i n a l o n e.B.I s t w i c e a s t h e o r i g i n a l o n e.C.R e m a i n t h e s a m eD.M a y i n c r e a s e o r d e c r e a s e.(b)5.W h i c h o f t h e f o l l o w i n g i t e m s i s a n e x a m p l e o f p u b l i c g o o d s?A.F i s h e s i n t h e o c e a n.B.N a t i o n a l d e f e n s e.C.A p p l e s o n a h o u s e h o l d’s a p p l e t r e e.D.H o t d o g s i n a p i c n i c.()6.I f t h e p r o d u c t i o n f u n c t i o n h a s t h e a t t r i b u t e o fd i m i n i s h i n g m a r g i n a l re t u r n s,t h e s l o p e of t h e t o t a l c o s t c u r v e w h i c h i s a s s o c i a t e d w i t h t h e p r o d u c t i o n f u n c t i o nA.I n c r e a s e s w h e n p r o d u c e d q u a n t i t y i n c r e a s eB.D e c r e a s e s w h e n p r o d u c e d q u a n t i t y i n c r e a s e.C.R e m a i n s t h e s a m e.D.M a y b e a n y o n e m e n t i o n e d a b o v e.(d)7.I f t h e m a r g i n a l c o s t c u r v e i s b e l o w t h e a v e r a g e t o t a l c o s t c u r v e,_________.A.A v e r a g e t o t a l c o s t i n c r e a s e s.B.A v e r a g e f i x e d c o s t i n c r e a s e s.C.A v e r a g e t o t a l c o s t a c h i e v e s i t s m i n i m u m.D.A v e r a g e t o t a l c o s t d e c r e a s e s.( b ) 8. I f a c o m p e t i t i v e f i r m a c h i e v e i t s l o n g -r u ne q u i l i b r i u m s t a t e ,A. I t s a v e r a g e t o t a l c o s t a c h i e v e s i t s m i n i m u m .B. M a r g i n a l c o s t e q u a l s m a r g i n a l r e v e n u e .C. I t g e t s z e r o e c o n o m i c p r o f i t .D. A l l t h e i t e m s m e n t i o n e d a b o v e a r e c o r r e c t .( a ) 9. T h e i n e f f i c i e n c y o f m o n o p o l y i s c a u s e d b y _______A. D e f i c i e n t p r o d u c t i o n o f m o n o p o l y .B. O v e r p r o d u c t i o n o f m o n o p o l y .C. M o n o p o l i s t i c p r o f i t .D. M o n o p o l i s t i c l o s s .( a ) 10.T h e m e a n i n g o f “m o n o p o l i s t i c ” i n “m o n o p o l i s t i c c o m p e t i t i o n ” i s ______A . m o n o p o l i s t i c c o m p e t i t i v e f i r m f a c e s a d o w n w a r d s l o p i n g d e m a n d c u r v e .B . m o n o p o l i s t i c c o m p e t i t i v e f i r m c a n f r e e l y e n t e r a n d e x i t t h e m a r k e t .C . m o n o p o l i s t i c c o m p e t i t i v e f i r m c h a r g e s t h e p r i c e a si t s m a r g i n a l c o s t .D . m o n o p o l i s t i c c o m p e t i t i v e f i r m p r o d u c e a t i t se f f i c i e n t s c a l e .Ⅳ. P r o b l e m s f o r c a l c u l a t i o n (t o t a l 20 p o i n t s )1. T h e m o n o p o l y ’s c o s t i s a f u n c t i o n o f i t s o u t p u t , w h i c h i sC(Q)=Q22+12,a n d t h e m o n o p o l y f a c e s t h e l i n e a r i n v e r s e d e m a n df u n c t i o n:P=24—Q(t o t a l10p o i n t s)(1)C a l c u l a t e f o l l o w i n g i t e m s:m a r g i n a l c o s t,a v e r a g e f i x e dc o s t,a v e r a g e v a r i a b l e c o s t,a v e r a g e t o t a l c o s t,a nd m a r g i n a l re v e n u e(5p o i n t s)(2)C a l c u l a t e p r o f i t-m a x i m i z i n g o u t p u t(2p o i n t s)a n d p r o f i t-m a x i m i z i n g p r i c e(1p o i n t),d e t e r m i n e i t s e c o n o m i c p r o f i t(2p o i n t s)2.T h e f o l l o w i n g i s t h e d e m a n d s c h e d u l e f o r c o n s u m e r s o f w a t c h i n g t w o i d e n t i c a l b a s e b a l l g a m e s i n a c i t y.T h e b a s e b a l l f i e l d a n d b a s e b a l l p l a y e r s f o r t h e s e t w o t e a m s a r e f r e e l y p r o v i d e d b y t h e b a s e b a l l l e a g u e(t o t a l10p o i n t s)(1)I f i t i s a p e r f e c t l y c o m p e t i t i v e m a r k e t,d e t e r m i n e t h e p r i c e a n d q u a n t i t y.(2p o i n t s)(2)I f t h e d u o p o l y m a k e s c o l l u s i o n t o b e c o m e a c a r t e l,d e t e r m i n e t h e p r i c e,q u a n t i t y a n d p r o f i t f o r e a c h f i r m i f t h e o n l y g o a l f o r t h e m i s p r o f i t m a x i m i z i n g.(3p o i n t s)(3)I f t h e y f a i l t o m a k e c o l l u s i o n,d e t e r m i n e t h e i r i n d i v i d u a l p r o f i t i f N a s h e q u i l i b r i u m i s a c h i e v e d.(3p o i n t s)(4)D r a w o u t t w o t e a m’s s t r a t e g i e s a b o u t t h e i r o u t p u t s a n d p r o f i t s(N o t e:U s e t h e c h a r t o f p r i s o n e r’d i l e m m a s h o w n i n o u r t e x t b o o k,p l e a s e).(2p o i n t s)Ⅴ.S h o r t a n s w e r s i t e m s(t o t a l25p o i n t s)1.W h y f i r m s i n a p e r f e c t l y c o m p e t i t i v e m a r k e t p r o d u c e a t t h e i re f f i c i e n t s c a l e s w h e n t h e y a c h i e v e t h e i r l o n g r u n e q u i l i b r i u m? (5p o i n t s)完全竞争厂商在长期内对全部生产要素的调整可以表现为两个方面：一方面表现为厂商进入或退出一个行业，这也就是行业内企业数量的调整；另一方面表现为厂商对生产规模的调整。

ECON915, Seminar 3Attempt all of the following questions.1.) If you are a risk attracted person who is given a choice between Y A : a bet with an expected value of £66 or Y B : £66 for certain, which offer would you prefer and what could an observer conclude from your choice about the amount of certainty equivalent income.A risk attracted individual would choose the bet with an expected value of £66. Since you prefer uncertain income to certain income of the same amount, this must give you greater utility. The amount of certain income rendering the same utility (i.e. the certainty equivalent income level) must therefore be larger than £66.2.) Explain how the problem of Moral Hazard can render full insurance at the fair odds premium unsustainable.The moral hazard problem can for example arise if an insurance customer cansubstantially reduce an accident risk by incurring a small expenditure and contracts insurance at the full premium conditional on the accident reduction having been implemented. If compliance can't be observed, the insurance customer then has an incentive not to incur this small but non-zero expenditure and maintain a high risk which effectively insured at advantageous terms.The insurer can react by demanding an excess –such that the pay off from riskreduction provides an efficient compliance incentive—or can insure fully at the high risk premium.3.) Explain the notion of a separating equilibrium.In insurance contracts, a separating equilibrium is achieved if economic agents have an incentive to take out insurance contracts according to their true risk characteristics. The Self Selection Constraint is:Where C is the cost of a loss materialising, and IP is the compensating insurance payment and π’ and π the loss probabilities for high and low risks respectively. This constraint states that the utility from fully insuring at fair-high risk odds must be at least as large as the utility from insuring partially at the low risk premium. This constraint is an appropriate condition for an adverse selection problem.4.) Find and read the following article: George Akerlof (1970) “The Market for‘Lemons’: Quality Uncertainty and the Market Mechanism” The Quarterly Journal of Economics Vol. 84, No.3, pp. 488-500. How do the principles discussed in this article relate to our treatment of asymmetric information so far?Lectures to date have focussed on symmetric uncertainty scenarios and moral hazard. What Akerlof discusses is largely adverse selection, where qualitative characteristics are given and do not depend on unobserved actions of one party. The conclusion that under certain conditions markets may collapse is far less useful than later models ()()()()IP IP C y U IP y U C y U F F F +−−+−−≥−πππππ''1'describing possible, though sub-optimal equilibria. The importance of this article lies in the fact that it was the first contribution to address the problem of asymmetric information at all. A number of journals had rejected this article previously before it finally got accepted in QJA, years before Akerlof received the Nobel price for it.。

微观经济学练习题与答案英⽂版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). The cost-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 became a 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 or under-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 thecost-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. $450D. $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. $3559. 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。

ECON915, Seminar 4Attempt all of the following questions.1.) Assume that in a credit market with standard debt contracts, there are two groups of investors. Low risk investors (group 1) have a success probability of p 1=0.8 and a return of $150 on a successful investment of K=100, yielding an expected return of E(R 1)=0.8($150)+0.2($100)=$140. Assume further that the same amount of K=$100 is invested by either group and assuming further that 10 investors are present in either group. Based on the above, state what rate of return on successful investments, high risk investors would have to achieve in order to match the expected return of $140 if their success probability is p 2=0.6 .The expected return on a high risk investment is:E(R):= 140 = 0.6x+0.4(100), which can easily be solved for x:140=0.6x + 400.6x=140-40=100x=100/0.6=166.667=R 2, R 2/K=1.672.) Against the data provided above in Q1, what is the highest rate of return that could be achieved without violating the participation constraint for low and high risk investors respectively?The participation constraint in either case is E(Πi )>=0 which essentially implies that R S >=r. The maximum value is obtained for the point where the constraint holds with equality. So, for low risk investors we have:E(Π1)=0.8(150-100-100r) which yields 100r = 50, so r = 50/100 =0.5.This yields the following rate of return:%3535.0)7.0(5.020)10(6.0)10(8.05.0≈==+=Max ρ So the highest interest rate that can be reconciled with the low risk participation constraint is 50%. This yields a rate of return of 35% to the banking sector, because the interest rate is charged to a mixed pool of high and low risk investors.Likewise, for high risk investors we have E(Π2)=0.6(166.67-100-100r) which yields 100r = 66.67, so r = 0.67 and:()40.06.067.02,==Max ρwhich is just the expected rate of return for high risk investors.3.) Against the background of questions 1 and 2, compute which rates of return would be obtained by interest rates of r = 48%, 53% and 66% respectively.r = 48% would not yet violate low risk investors' participation constraint so:%6.33 i.e. ,34.0)7.0(48.020)10(6.0)10(8.048.0==+=A ρ For interest rates of r=53% and 66% low risk investors' participation constraint is violated, so:ρB = 0.53*0.6=0.312, i.e. 31.2%ρC = 0.66*0.6=0.396, i.e. 39.6%Note that r B >r A and yet ρB <ρA !。

微观经济学英⽂版1-8章⾃测题及答案第⼀章1. Beth’s friends want to take her to a movie or a play for her birthday. Beth chooses to attend the play. We know that:a. Beth has made an irrational decision.b. not seeing the movie is Beth’s opportunity cost of attending the play.c. Beth did not make a decision at the margin.d. seeing the play did not cost Beth anything since she did not have to pay for the ticket.2. A market economy relies ona. decentralized choices coordinated by Adam Smith’s “invisible hand.”b. centralized choices coordin ated by Adam Smith’s “invisible hand.”c. decentralized choices coordinated by the “visible hand” of authority.d. centralized choices coordinated by the “visible hand” of authority.3. Which of the following is an example of market power?a. Elaine engages in less research than she would if the government were to subsidize her research activities.b. Mark’s company charges a higher price for its product because government regulations force the company to clean-up its emissions into a local waterway.c. Because of the high cost of gasoline, Jennifer buys a smaller, more fuel-efficient car.d. The town’s only cable company charges a higher price than it would if it faced competition from other firms.4. Government regulation of the economy may be beneficial if:a. externalities exist.b. there is too much competition.c. there is no market power.d. special interest groups act to influence government policy.5. Which of the following variables is the key ingredient in improving the standard of living of the average citizen?a. low inflationb. low unemployment ratesc. productivity increasesd. population growth6. Externalities occur whena. one person’s actions affect the well-being of a bystander.b. the government imposes taxes.c. increases in the price of oil cause gasoline prices to rise.d. higher wages result in increased spending.7. Which of the following are NOT examples of market failure?b. BUU is the sole provider of long-distance for the United States.c. As a result of its production processes, REA Corporation emits two tons of air pollutants daily.d. None of the above.8. Government intervention in the marketplacea. always benefits society.b. always harms society.c. may either benefit or harm society depending on the type and extent of government intervention.d. is rarely influenced by political considerations.9. Trade between two countriesa. makes both countries better off.b. can benefit one country but not both.c. causes one country to gain and the other country to lose.d. is a zero-sum game.10. Inflation refers toa. a continuing decrease in the overall level of prices in the economy.b. an increase in the overall level of prices in the economy.c. a persistent increase in the amount of goods which can be purchased with a given amount of money.d. an increase in some individual prices in the economy.11. In most cases, high or persistent inflation is caused by:a. too rapid growth in the quantity of money.b. a reduction in the quantity of money.c. an increase in unemployment.d. an increase in productivity.12. To say that people make decisions at the margin means that theya. wait until the last minute before making a decision.b. weigh the additional costs and additional benefits of small changes.c. make decisions that determine whether or not they will live their lives on the edge of subsistence.d. make decisions on issues that are relatively unimportant for their economic well-being.13. According to the Phillips curve,a. there is no tradeoff between inflation and unemployment.b. if inflation increases, so does unemployment.c. increases in unemployment are associated with a rise in prices.14. When economists say that individuals respond to incentives, they mean thata. if the benefit of an activity increases, people will engage in more of that activity.b. once individuals have made a mistake, they will never make the same mistake again.c. individuals act very quickly when faced with a problem.d. individuals respond to positive stimuli, but not to negative stimuli.15. Economics is primarily the study ofa. how to make money in the stock market.b. how to operate a business successfully.c. how society manages its scarce resources.d. the methods that government might use to transform a scarce good into an economic good.16. What ever must be given up to obtain some item isa. an explicit cost.b. an opportunity cost.c. an historical cost.d. an accounting cost.17. Scarcity arises because ofa. limited resources.b. poverty.c. too little money in an economy.d. government inefficiencies.18. “There is no such thing as a free lunch.” This expression meansa. no decision is cost-free.b. if Jan and Jim go out to eat lunch, one of them must pay for the lunch or the restaurant will call the police.c. while some actions involve a cost, others do not.d. that scarcity exists in some situations, but does not in others.参考答案：1.b2.a3.d4.a5.c6.a7.d8.c11.a 12.b 13.d 14.a 15.c 16.b 17.a 18.a第⼆章1. Economists use assumptionsa. to make the real world easier to understand.b. to make their models more accurately reflect the real world.c. to make their models more complex.d. to make it more difficult to understand how the real world operates.2. Which of the following is an example of a normative economic statement?a. If the economy is experiencing full employment, a large tax cut will create inflation.b. An increase in the government’s budget deficit will cause an increase in interest rates.c. A decrease in the minimum wage will decrease unemployment among teens.d. The federal government should increase spending on education.3. A technological advance or an increase in the factors of production is represented asa. a shift of the production possibilities frontier in towards the origin.b. a shift of the production possibilities frontier away from the origin.c. a movement down the production possibilities frontier.d. a movement up the production possibilities frontier.4. Microeconomics is the study ofa. how households and firms make decisions and how they interact in the market.b. economy-wide phenomena.c. inflation, unemployment, and economic growth.d. the impact of government actions on the economy.5. Macroeconomics is concerned primarily witha. the way things are produced.b. the prices of particular goods and services.c. the behavior of consumers.d. the study of economy-wide phenomena.6. According to the circular flow modela. in the market for goods and services, households are buyers and firms are sellers.b. the market for goods and services, households are sellers and firms are buyers.c. in the market for factors of production, households are buyers and firms are sellers.d. firms are the owners of the factors of production.7. A production possibilities frontier showsa. the prices at which alternative goods will be produced.c. the tax revenue a government receives at various tax rates.d. the various combinations of two goods a country can produce with its factors of production and the available production technology.8. Which of the following is a statement of positive economics?a. Income taxes should be reduced in order to increase economic growth.b. A reduction in tax rates will increase the after-tax incomes of the rich.c. Tax rates ought to be reduced so that people will work more.d. All people who are on welfare for more than 24 months should be required to work.9. In the circular-flow model, households receive income in the form of:a. wages only.b. wages and rent.c. wages and rent and profit.d. rent only.10. A good economic model such as supply and demand is like a road map becausea. it omits many details to allow us to use only pertinent information.b. it accurately depicts all the details of the real-world.c. it is complex enough that only those with high intellect can understand it.d. it makes little use of assumptions.参考答案：1.a2.d3.b4.a5.d6.a7.d8.b9.c 10.a第三章1. Mary can produce housing at a lower opportunity cost than Joan. Economists would say thata. Mary has the comparative advantage in the production of housing.b. Joan has the comparative advantage in the production of housing.c. Mary has the absolute advantage in the production of housing.d. Joan has the absolute advantage in the production of housing.2. When trade takes placeb. one pa rty must gain at the other party’s expense.c. both parties can be better off.d. one party will gain and the other party will be neither better nor worse off.3. The average worker in the United States can produce 20 tons of coal or 10 tons of iron per hour. The average worker in Canada can produce either 10 tons of coal or 10 tons of iron per hour. The United States has a comparative advantage in the production ofa. iron.b. coal.c. both iron and coal.d. neither iron nor coal.4. If Brazil can produce more shoes with one hour of labor than Argentina, which of the following is necessarily true?a. Brazil has a comparative advantage in the production of shoes.b. Brazil exports shoes to Argentina if there is free trade.c. Brazil has an absolute advantage in the production of shoes.d. All of the above are true.5. Comparative advantage describes the situation wherea. one producer has more resources than another producer.b. a producer produces more output than another producer.c. the opportunity cost of producing a good is smaller for one producer than for a second producer.d. the opportunity cost of producing a good is the same for both producers.6. With trade, a country’s set of consumption opportunities liesa. inside the production possibility frontier.b. outside the production possibility frontier.c. at the same point as the production possibility frontier.d. inside the production possibilities frontier at some points and on the production possibilities frontier at other points.7. In France each unit of labor can produce 3 bottles of wine or 2 shirts. In Portugal each unit of labor can produce 2 bottles of wine or 1 shirt. Which country has a comparative advantage in producing wine?a. Franceb. Portugalc. Both France and Portugal.d. Neither France nor Portugal.8. If Argentina produces shirts with a smaller sacrifice of shoes than Brazil,a. Argentina has an absolute advantage in shirt production.b. Brazil has an absolute advantage in shirt production.9. A country should specialize in the production of those goodsa. that have the highest price.b. that use the most labor.c. for which a country has an absolute advantage.d. for which a country has a comparative advantage.10. Which of the following is true when countries specialize according to their comparative advantage?a. It is possible to increase world output of all goods.b. It is possible to increase world output of some goods only by reducing the output of others.c. One country is likely to gain from trade while others lose.d. All countries will lose from trade.参考答案：1.a2.c3.b4.c5.c6.b7.b8.d9.d 10.a第四章1. Which of the following is a characteristic of perfect competition?a. A single seller.b. A small number of buyers.c. Buyers and sellers are price setters.d. Buyers and sellers are price takers.2. A decrease in the price of pizza willa. decrease the quantity of pizza demanded.b. increase the quantity of pizza demanded.c. decrease the demand for pizza.d. increase the demand for pizza.3. When income increases, purchases of houses increase. This meansb. there has been a movement down the demand curve for housing.c. the demand curve for housing has shifted leftward.d. there has been a movement up the demand curve for housing.4. Suppose oranges are currently selling for $2.00 per pound. The equilibrium price of oranges is $1.56 per pound. We would expecta. a shortage to exist and the market price of oranges to increase.b. a shortage to exist and the market price of oranges to decrease.c. a surplus to exist and the market price of oranges to increase.d. a surplus to exist and the market price of oranges to decrease.5. Suppose the price of Coke increases. What would happen to the equilibrium price and quantity of Pepsi?a. Both the equilibrium price and quantity of Pepsi would increase.b. Both the equilibrium price and quantity of Pepsi would decrease.c. The equilibrium price of Pepsi would increase, and the equilibrium quantity of Pepsi would decrease.d. The equilibrium price of Pepsi would decrease, and the equilibrium quantity of Pepsi would increase.6. Suppose there is an advance in technology that allows the automobile industry to manufacture automobiles more cheaply. We would expecta. an increase in both the equilibrium price and the equilibrium quantity of automobiles.b. a decrease in both the equilibrium price and the equilibrium quantity of automobiles.c. an increase in the equilibrium price and a decrease in equilibrium quantity of automobiles.d. a decrease in the equilibrium price and an increase in the equilibrium quantity of automobiles.7. When both supply and demand increasea. equilibrium price rises, and so does equilibrium quantity.b. equilibrium price falls, but equilibrium quantity rises.c. equilibrium quantity rises.d. it is impossible to speculate about the results for equilibrium price or equilibrium quantity.8. Because cars and gasoline are complements, an increase in the price of gasoline willa. increase the demand for cars.b. decrease the demand for cars.c. increase the demand for gasoline.d. decrease the demand for gasoline.9. A change in which of the following will cause a movement along the supply curve?b. a change in taxesc. a change in expectations about future pricesd. a change in the price of the good10. Suppose the price of land increases. At the same time, income increases. What would happen to the equilibrium price and quantity of housing?a. Equilibrium price will decrease. We cannot predict what will happen to equilibrium quantity.b. Equilibrium price will increase. We cannot predict what will happen to equilibrium quantity.c. Equilibrium quantity will decrease. We cannot predict what will happen to equilibrium price.d. Equilibrium quantity will increase. We cannot predict what will happen to equilibrium price.参考答案：1.d2.b3.a4.d5.a6.d7.c8.b9.d 10.b第五章1. Which of the following statements is correct?a. The demand for luxuries tends to be more elastic than the demand for necessities.Correct. Demand for luxuries can be more sensitive to price changes.b. If there are no close substitutes for a good, demand will be very elastic.c. The shorter the time period, the more elastic is demand.d. Ho w a good’s market is defined has no impact on the good’s elasticity.2. If the quantity of movie tickets sold decreases by 20 percent when the price increases by 10 percent, demand over this price range is:a. inelastic.b. elastic.c. perfectly inelastic.3. Given that the demand for cocaine is inelastic, how will a reduction in supply affect totalrevenue of those selling this drug (other things equal)?a. Total revenue will rise.b. Total revenue will fall.c. Total revenue will not change.d. The effect on total revenue cannot be predicted.4. The local movie theater lowers admission prices in an attempt to increase its revenues. The managers of the theater must believe demand to bea. unit price elastic.b. perfectly price inelastic.c. price elastic.d. price inelastic.5. The income elasticity of demand for good X is estimated to be -0.5. This suggests that good X isa. a complementary good.b. a substitute good.c. a normal good.d. an inferior good.6. Suppose the cross-price elasticity of demand is a negative number. We know thata. the two goods are complements.b. the two goods are substitutes.c. the two goods are inferior goods.d. the two goods are normal goods.7. If the percentage change in the quantity supplied of a good is less than the percentage change in price, then supply of the good isa. elastic.b. inelastic.c. normal.d. inferior.8. Suppose the supply curve for a good is vertical. We know that supply isa. price elastic.b. perfectly price inelastic.d. perfectly price elastic.9. If the price of one dozen eggs increases from $1.60 to $2.00, quantity demanded will decrease from 600 to 400. The elasticity of demand for eggs (using the mid-point formula) isa. 0.8.b. 1.8.c. 11.26.d. 1.9.10. The cross-price elasticity of Toyotas and Nissans is a positive number. This would indicate that Toyotas and Nissans area. substitutes.b. complements.c. luxuries.d. necessities.参考答案：1.a2.b3.a4.c5.d6.a7.b8.b9.b 10.a第六章1. A shortage will occur ifa. a price ceiling is set above the equilibrium price.b. a price ceiling is set below the equilibrium price.c. a price floor is set above the equilibrium price.d. a price floor is set below the equilibrium price.2. If the government establishes a legal price floor for a good, the result will be a(n):a. shortage of the good, but only if the floor is equal to the equilibrium price.b. surplus of the good, but only if the floor is above the equilibrium price.c. surplus of the good, but only if the floor is below the equilibrium price.d. shortage of the good, but only if the floor is above the equilibrium price.3. If a price ceiling above the equilibrium price is imposed on gasoline, which of the following will result?a. There will be a surplus of gasoline.b. The quantity demanded will exceed the quantity supplied.c. The quantity supplied will exceed the quantity demanded.d. The quantity of gasoline demanded will equal the quantity of gasoline supplied.4. A price ceiling isa. a legal maximum price at which a good can be sold.b. a legal minimum price at which a good can be sold.c. typically equal to the equilibrium price of a good.d. a price set by government that varies with market conditions.5. A wage is the price for labor. A minimum wage set above equilibrium wage would be an example of:a. a price ceiling.b. a price floor.c. a gap in prices or wages.d. a wage settlement.6. Tax incidence deals witha. the level of taxable income.b. the level of taxation on sales.c. the dollar amount of incidental taxes.d. who bears the burden of a tax.7. Sellers pay more of a tax imposed on a good whena. the demand for the good is more inelastic.b. the supply of the good is more elastic.c. the supply of the good is less elastic.d. the supply of and the demand for the good have the same elasticity.8. Assume the government wants to impose a tax on wine. It wants to minimize the negative impact the tax has on consumers in the form of higher prices. It will achieve this goal ifa. demand is relatively elastic.b. demand is relatively inelastic.c. supply is relatively elastic.d. the supply curve and the demand curve for wine have the same elasticity.9. If the tax on bottled water were raised by $1 per bottle, we would expecta. buyers to bear the entire tax in the form of higher prices.b. sellers to bear the tax in the form of lower prices.c. part of the tax to fall on buyers in the form of higher prices, and part of the tax to fall on sellers in the form of lower prices.d. government revenues to fall.10. A law requiring sellers to pay the government a tax on cigarettes has the effect ofa. shifting the supply curve to the right.b. changing the slope of the supply curve.c. shifting the supply curve to the left.d. changing the slope of the demand curve.参考答案：1. b2.b3.d4.a5.b6.d7.c8.a9.c 10.c第七章1. The difference between the amount a seller is paid for a good and the cost of producing that good is known asa. net social cost.b. producer surplus.c. consumer surplus.d. total utility.2. Markets will NOT allocate resources efficiently ifa. there are many buyers and sellers.b. there is perfect competition.c. there are externalities.d. the market is allowed to reach equilibrium.3. Micha can provide Albert’s Services a networked computer system at a cost of $500.Albert’s manager will pay her $700 for providing the system. Micha’s producer surplus isa. $700.b. $500.c. $200.d. $0.4. An increase in the price of a good will causea. an increase in producer surplus and a decrease in consumer surplus.b. a decrease in producer surplus and an increase in consumer surplus.c. both producer and consumer surplus to increase.d. both producer and consumer surplus to decrease.5. The study of how the allocation of resources affects economic well-being is calleda. consumer economics.b. macroeconomics.c. welfare economics.d. supply-side economics.6.If a consumer is willing and able to pay $15.00 for a particular good but the price of the good is $17.00, then thea. consumer would have consumer surplus of $2.00.b. consumer would increase his/her willingness and ability to pay by earning more.c. consumer would not purchase the good and would not have any consumer surplus.d. market must not be a perfectly competitive market.7. On a graph, consumer surplus would be the areaa. between the demand and supply curves.b. below the demand curve and above price.c. below the price and above the supply curve.d. below the demand curve to the right of equilibrium price.8. Total surplus in a market is represented by the total areaa. under the demand curve and above the price.b. above the supply curve and up to the equilibrium price.c. under price and up to the point of equilibrium.d. between the demand and supply curves up to the point of equilibrium.9. When economists say that markets are efficient, they are assuming that markets area. perfectly competitive.b. not for illegal products.c. regulated by the government.d. monopolistic.10. “Laissez-faire” is a French expression which literally meansa. to make do.b. to get involved.c. whatever works.d. allow them to do.参考答案：1. b2.c3.c4.a5.c6.c7.b8.d9.a 10.d第⼋章1. A tax placed on a product causes the price the buyer paysa. and the price the seller receives to be higher.b. and the price the seller receives to be lower.c. to be lower and the price the seller receives to be higher.d. to be higher and the price the seller receives to be lower.2. Suppose a tax is imposed on the buyers of a product. The burden of the tax will falla. entirely on the buyers.b. entirely on the sellers.c. entirely on the government.d. on both the buyers and the sellers.3. Total tax revenue received by government can be expressed asa. T/Q.b. T＋Q.c. T×Q.d. T－Q.4. When the government places a tax on a producta. the cost of the tax to buyers and sellers will be less than the revenue raised from the tax by the government.b. the cost of the tax to buyers and sellers will equal the revenue raised from the tax by the government.c. the cost of the tax to buyers and sellers exceeds the revenue raised from the tax by the government.d. without additional information, such as the elasticity of demand for this product, it is impossible to compare tax cost with tax revenue.5. Deadweight loss is thea. 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.6. A tax has a deadweight loss becausea. it induces the government to spend more.b. it induces buyers to consume less and sellers to produce less.c. it causes a disequilibrium in the market.d. the loss to buyers is greater than the loss to sellers.7. The amount of deadweight loss that will result from a tax is determined by thea. price elasticity of demand and supply.b. number of buyers of the product in the market.c. number of suppliers of the product in the market.d. percentage of the purchase price the tax amounts to.8. The size of the tax and the deadweight loss of a tax area. positively related.b. negatively related.c. independent of each other.d. equal to each other.9. The greater the elasticities of demand and supply thea. 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.10. If the size of a tax increases, tax revenue willa. increase.b. decrease.c. remain the same.d. increase, then decrease.参考答案：1.d2.d3.c4.c5.a6.b7.a8.a9.c 10.d。

ECON915 Financial Economics Seminar 21. As an investor, you consider investing in a recently liberalized emerging market economy. From past post liberalization performance data for this economy you know that investment projects tend to have a pay-off of 11.57% per annum. What assumption would you have to make to conclude that this figure is a good guide to future investment returns.One assumption for past sample data to give a guide to the future is that the remaining investment opportunities are of equal quality as the ones earlier exploited. If one assumes that there is a limited pool of such opportunities (not an entirely realistic assumption) it would appear that the more profitable ones get taken first. So, later investment projects may well earn a lower return.A second reason has to do with diminishing marginal returns to individual production factors and capital saturation in the production process. We will address this in more detail in the context of growth theory next semester. The basic lesson here is that in an applied context one needs to be aware about the factors that influence the probabilities underlying past decision making.2. How would a change in the market rate of interest affect the allocation of consumption over time?A rise in the rate of interest would lead to an increase in future consumption and a fall in present consumption. A fall in the rate of interest would likewise lead to a rise in present consumption relative to future consumption. In either case, the market rate of interest is equal to the consumer’s rate of time preference at the new equilibrium point.3. Assume you and a business partner attempt to agree on an investment project. You have a strong preference for saving while you know your business partner’s preference to be weighted in favour of present consumption. How, if at all, could you agree on the optimum amount to invest in your firm?Microeconomic theory tells us that you should invest in your firm until the internal rate of return to your investment project has fallen to the market rate of interest. Once this point is achieved, your ‘hedonistic’ business partner can borrow at the market rate of interest to fund his present consumption. You can likewise invest your remaining assets in a bank account. Both of you benefit from this arrangement. Even your business partner does, since the investment project earns a higher rate of return than the market rate of interest, enabling him to consume more over both periods, and re-allocate this higher income at a cost determined by the market interest rate.4. Consider an income prospect of £749 with a certainty equivalent income level of £1024. Would an economic agent with risk preferences corresponding to this scenario be risk averse or risk loving?He would be risk loving, since the amount of certain income creating the equivalent amount of utility (hence certainty equivalent) to a given prospect, is higher than the expected value of this income prospect.5. Assume that at the end of the course you join the other MSc Finance students for a drink in a local pub. By the end of the evening you have reached a state of intoxication that makes you feel generous so you volunteer to pay for the drinks of all MSc students who have not yet paid for their drink. Do you pay for your own drink?The operative concepts here are membership of the set of MSc students and ownership of the drinks to be paid for. By the statement above, you should strictly speaking not have paid for your own drink, since you only pay for the drinks of those MSc students who do not pay for their own drinks and you are one of the MSc students. If however you don’t pay for your own drink, then you belong to the subset of those MSc students who have not paid for their drinks so that you would have to pay for it if it were not for the fact that you only pay for the drinks of those who don’t pay for their own drink and this is your own drink after all ….As should be clear by now the above statement is –in good logic- paradoxical. In general terms, it is not possible in set logic to define a set of all sets that do not contain themselves since such a set would have to contain itself while it would be simultaneously required that it can’t do so.This is also known Russel’s paradox. If you go further into this you will find that it closely ties in with the impossibility of creating self contained logical systems. Many of the assumptions made in economic theory are introduced to simplify things. Even if they were not, some assumptions would have to be made as a basis for any theory (and this includes theoretical physics).。

Managerial EconomicsPart 1:1. The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that:a. good A is a normal good.b. good B is an inferior good.c. goods A and B are substitutes.d. goods A and B are complements.e. none of the above.Choose: d) the definition os complements2. Joe's budget line is 15F + 45C = 900. When Joe chooses his most preferred market basket, he buys 10 units of C. therefore, he also buys :a. 10 units of Fb. 30 units of Fc. 50 units of Fd. 60 units of Fe. None of the aboveChoose: b) We assume that Joe will spend all his income. If C = 10, then 15F =900 – 45(10) =450, so F = 450/15 =30.3. Kim only buys coffee and compact discs. Coffee costs $0.60 per cup, and CDs cost $12.00 each. She has $18 per week to spend on these two goods. If Kim is maximizing her utility, her marginal rate of substitution of coffee for CDs is:a. 0.05b. 20c. 18d. 1.50e. None of the aboveChoose: a) At Kim's most preferred market basket, her MRS equals the price ratio (Pcoffee/PCD), which equals 0.6/12 or 0.05.4. The bandwagon effect corresponds best to which of the following?a. snob effect.b. external economy.c. negative network externality.d. positive network externality.Choose: d)5. A Giffen gooda. is always the same as an inferior good.b. is the special subset of inferior goods in which the substitution effect dominates the income effect.c. is the special subset of inferior goods in which the income effect dominates the substitution effect.d. must have a downward sloping demand curve.Choose: c) the definition of Giffen good6. An Engel curve for a good has a positive slope if the good is :a. an inferior good.b. a Giffen good.c. a normal good. d. a, b, and c are true.e. None of the above is true.Choose: c) Inferior and Giffen goods have negatively sloped Engel curves.7. The price of beef and quantity of beef traded are P* and Q*, respectively. Given this information, consumer surplus is the area:a. 0BCQ*b. ABCc. ACP*d. CBP*e. 0ACQ*Choose: d)Consumer surplus is the area between the demand line and the price.8. In Figure 1, holding income constant, what change must have occurred to rotate the budget line from the old line(1) to the new line(2)?Figure 1a. The price of Coke fellb. The price of pizza fellc. The price of pizza rosed. The price of Coke went upe. b and cChoose: b) The horizontal intercept, I/PC, is unchanged, which implies that PC could not have changed (holding income constant). Since the slope is PP/PC, the slope change means that the price of pizza must have fallen. This can also be seen intuitively from Figure 1, since the consumer can now buy more pizza than before if he spends all his income on pizza.9. Andy buys 10 pounds of onions per month when the price is $0.75 per pound. If the price falls to $0.50 per pound, he buys 30 pounds of onions. What is his arc elasticity of demand over this price range?a. - 1.33b.–2c.–2.5d. - 6e. None of the above is correct. Choose: c) Using the arc elasticity formula,5.22)1030(2)75.050.0()75.050.0()1030(-=÷+÷⨯⨯--=⨯∆∆=Q P P Q EP The next two questions refer to the following information: Opie and Gomer are theonly two consumers in the video cassette rental market in the Mayberry. Their demand curves per week are pictured in Figure 2.10. If rentals cost $2.50 each, the total quantity demanded each week in the market is :a. 3b. 6c. 15d. 10e. None of the above is correct.Choose: b) Add horizontally to get the market demand curve. At P = $2.50, QO = 3 and QG = 3 for a total of 6 units demanded.11. For a decrease in price from $2.50 to $1.50, market demand is :a. elastic.b. unit elastic. c. inelastic.d. perfectly inelastic.e. More information is needed. Choose: a) Demand is price elastic:EP = %ΔQ/%ΔP = [(15(a)12. As president and CEO of MegaWorld industries, you must decide on some very risky alternative investments:a. A.b. B.c. C.d. D.e. EChoose: b) Ea=2 Eb=6.8 Ec=0 Ed=6 Ee=613. An individual with a constant marginal utility of income will bea. risk averse.b. risk neutral.c. risk loving.d. insufficient information for a decision.Choose: b)An individual with a constant marginal utility of income is risk neutral.14. In the figure below, what is true about the two jobs?a.Job 1 has a lower standard deviation than Job 2.b.All outcomes in both jobs have the same probability of occurrence.c. A risk-averse person would prefer Job 2.d. A risk-neutral person would prefer Job 1.e.Job 1 has a higher expected income than Job 2.Choose: a) Job 1 has a lower standard deviation than Job 2. Expected income of Job 1 equals to Job 2.Part 2:The demand curves for steak, eggs, and hot dogs are given in the table below. The current price of steak is $5. The price of eggs is $2.50, and the price of hot dogsis $0.75. Fill in the remaining columns of the table using this information.Solution:Steak and eggs are complements. Steak and hotdogs and eggs and hotdogs are substitutes.Part 3:Draw indifference curves to represent the following descriptions of consumer preferences:a. I can’t taste the difference between apple and grape jelly, but I likethem both.b. I only like grape jelly and never eat apple jelly.c. Apple and grape jelly are better mixed, although I don’t care to o much about the proportions.Answer:a) See Figure 7(a). Since the consumer can not tell the difference between the twoflavors, all he would care about is the total amount of jelly he has.b) See Figure 7(b). An increase in the amount of apple jelly does not affect the consumer since he never eats it.c) See Figure 7(c). Here, a mixed bundle is better than an extreme one, but the consumer is willing to trade off the different flavors.Figure 7Part 4:There are reasons other than fads, fashions, and consumer insecurity for bandwagon and snob effects. Various types of externalities in the consumption of certain goods also exist. Explain which these effects (bandwagon or snob) might be present in the following cases:a. A restaurant that is often crowdedb. A personal computer software productc. A rock concertAnswer:a) A price decrease will attract more customers, but the crowding(longer lines,poorer service) will discourage others. This would resemble a snob effect. b) The more people you expect to buy a software product, the more likely you canfind another experienced user to ask questions about it. Also, the more likely it is that a computer bookstore will carry publications about how to use the software. Thus, we would expect to see a bandwagon effect.Ounces of Grape Jelly Ounces of Apple Jelly (a) Ounces of Grape Jelly Ounces of Apple Jelly(b) (c) Ounces of Grape Jelly Ounces ofApple Jellyc) Here, crowding might discourage some customers. But, since part of the enjoyment of a concert is seeing the band with other fans, we might observe a bandwagon effect.Part 5:Tom Wilson is the operations manager for Bi-Corp, a real estate investment firm. Tom must decide if Bi-Corp is to invest in a strip mall in a northeast metropolitan area. If the shopping center is highly successful, after tax profits will be $100,000 per year. Moderate success would yield an annual profit of $50,000, while the project will lose $10,000 per year if it is unsuccessful. Past experience suggests that there is a 40% chance that the project will be highly successful, a 40% chance of moderate success, and a 20% probability that the project will be unsuccessful. a. Calculate the expected value and standard deviation of profit. b. The project requires an $800,000 investment. If Bi-Corp has an 8% opportunity coston invested funds of similar riskiness, should the project be undertaken? Solution:a.Expected Valueππ==∑i ^i^i 1nPπi ^P i ^ πi ^P i ^100,000 .4 40,00050,000 .4 20,000 -10,000 .2 -2,000π = 58,000Standard deviation σππ=-=∑i 2i ^i 1nPπi ^ ππi -ππi 2-ππi 2P -100,000 42,000, 764,000,000 705,600,00050,000 -8,000 64,000,000 25,600,000 -10,000 -68,000 4,624,000,000 924,800,000σ2 = 1,656,000,000σ = 40,693.98 b.Bio-Corp's opportunity cost is 8% of 800,000 or 0.08 x 800,000 = 64,000.The expected value of the project is less than the opportunity cost. Bi-Corp should not undertake the project.。

微观经济学试题及答案英文版Microeconomics Exam Questions and Answers (English Version)Question 1:Define the law of demand and explain how it relates to the concept of elasticity.Answer 1:The law of demand states that, all else being equal, the quantity demanded of a good or service will decrease as its price increases, and vice versa. Elasticity, specifically price elasticity of demand, measures the responsiveness of the quantity demanded to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. If the absolute value of the elasticity coefficient is greater than one, the demand is elastic; if it is less than one, the demand is inelastic; and if it equals one, the demand is unit elastic.Question 2:Explain the concept of marginal utility and how it relates to consumer behavior.Answer 2:Marginal utility is the additional satisfaction or utility derived from consuming one more unit of a good or service. It is the first derivative of the total utility function with respect to the quantity consumed. As consumers consume moreof a good, the marginal utility typically decreases, a phenomenon known as the law of diminishing marginal utility. This concept is fundamental to understanding consumer behavior and the decision-making process when allocating a limited budget among various goods and services.Question 3:What is the difference between a perfectly competitive market and a monopoly?Answer 3:A perfectly competitive market is characterized by a large number of buyers and sellers, homogeneous products, free entry and exit, and the absence of barriers to entry. Prices are determined by the market and individual firms are price takers. In contrast, a monopoly is a market structure where there is only one seller of a unique product with no close substitutes. The monopolist has market power and can set prices above marginal cost, leading to deadweight loss and inefficiency.Question 4:Explain the concept of opportunity cost and give an example.Answer 4:Opportunity cost is the value of the next best alternative that is forgone when making a choice. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another. For example, if a farmer has a choice between growing wheat or corn on a piece of land, the opportunity cost of choosing to grow wheat isthe profit that could have been earned from growing corn.Question 5:What are the factors that determine the shape of a firm's supply curve?Answer 5:The shape of a firm's supply curve is determined by the relationship between the cost of production and the quantity supplied. If the marginal cost of production is constant, the supply curve will be perfectly elastic (horizontal). If the marginal cost increases as production increases, the supply curve will be upward sloping. Factors such as technology, input costs, and the availability of resources can influence the shape of the supply curve.End of ExamPlease note that this is a sample exam and the questions and answers provided are for illustrative purposes only.。

Chapter 11. Economic analysis:A) involves some simplifications of reality.B) is only vaguely related to reality because if it did so coincide, it would not still be theory.C) is impossible, because of the impossibility of a controlled experiment.D) if it is good theory, involves no simplification of reality.E) involves so much distortion of reality as to be worthless.Ans: A2. What are economic goods?A) Goods that are very expensive.B) Goods that are in scarce or limited supply.C) Goods that a country produces and then trades to another county.D) Goods that are vital to an individual's welfare.E) All of the above.Ans: B3. "Scarcity" in economics refers basically to:A) periods of famine.B) monopolization of existing supplies of goods.C) monopolization of resources to provide goods.D) monopolization of outlets to sell goods.E) none of the above.Ans: E4. "Distribution" in economics refers to:A) retailing, wholesaling, and transportation.B) what.C) how.D) for whom.E) none of the above.Ans: D5. The three questions of what, how, and for whom:A) relate to the three factors of production.B) exist because of scarcity.C) are more of a problem in a market economy.D) are more of a problem in a command economy.E) are no longer relevant.Ans: B6.The description of economics as, "cool heads in the service of warm hearts", means that:A) allocating scarce resources may require painful decisions.B) costs and benefits need to be weighed objectively.C) the proper balance must be struck between the discipline of the market and the generosity of the welfare state.D) all of the above.E) none of the above.Ans: D7. When moving along a production possibilities frontier, the opportunity cost to society of obtaining more of one of the two goods:A) is measured in dollar terms.B) usually decreases as more of the good is produced.C) is measured by the amount of the other good that must be given up.D) is measured by the additional resources that must be used to produce the good.E) is usually constant.Ans: C8.These data reflect three possible combinations of food and nothing that can be produced from a given set of resources.Food 10 5 0Clothing O X 50Refer to the above data. If both clothing and food always use all inputs in the same proportion, then X must be:A) 25.B) more than 25.C) less than 25.D) 50.E) cannot not be determined from the dataAns: A9. Being on the production-possibility frontier between guns and butter means that:A) it is impossible to produce any more guns.B) it is impossible to produce any more butter.C) more guns can be produced only by doing without some butter.D) population is in equilibrium.E) if society becomes more productive in producing butter, then we can have morebutter but not more guns.Ans: C10. A shift in a production-possibility frontier can result from:A) unemployment.B) inflation.C) changes in production techniques.D) changes in the combination of goods produced.E) changes in consumers' tastes.Ans: C11Figure 1-1Which point on the production-possibility frontiers drawn in Figure 1 indicates no consumption goods being produced?A) A.B) B.C) C.D) D.E) E.Ans: E12. Of the following points, which point reflects the most efficient use of available resources in relation to frontier AE in Figure 1-1?A) F.B) G.C) C.D) H.E) Cannot tell from the information provided.Ans: C13.Relative to frontier A'E' in Figure 1-1, which of the following points is least efficient?A) B'.B) C'.C) B.D) C.E) F.Ans: E14. Point A on which panel in Figure 1-2 represents an inefficient use of resources?A) Panel A.B) Panel B.C) Panel C.D) Panel D.E) Panel E.Ans: D15. For a theory to be useful, it must be confirmed in each test case.Ans: FalseCHAPTER 21. In a market system, the what decision is made most basically byA) representative government.B) national planning.C) bankers.D) advertisers and their ability to persuade buyers.E) spending decisions of those with money.Ans: E2. In a market economy, the presumed harmony between individual and public interest depends upon:A) the good will of private business people.B) careful planning and coordination of economic activity.C) altruism on the part of consumers.D) competitive markets and the pursuit of self-interest by individuals.E) the wisdom of government decisions.Ans: D3. Pollution control policy is directed first and foremost at improving:A) equity.B) efficiency.C) stability.D) all of the above.E) none of the aboveAns: B4. Who is in charge of a market economy? That is, what agents and factors are the most important in determining market outcomes?A) Large companies.B) Congress and the president.C) Consumers alone.D) All producers.E) Consumers and technology.Ans: E5. The principle of the "invisible hand" claims that:A) the selfish pursuits of everyone's own interest will lead to the best good for all under market competition.B) government must gently guide economic activity so that the best for all will be attained.C) government policies work like an invisible hand, steering resources to their best use.D) producers must quietly cooperate so that prices are not so low as to cause losses.E) none of the above.Ans: A6. Consumers vote their dollars primarily in:A) labor markets.B) land markets.C) capital markets.D) goods markets .E) none of the above.Ans: D7. Which of the following statements is true of specialization?A) Specialization is inconsistent with the idea of individual freedom.B) Economies that practice a division of labor are morally superior to those that do not.C) In accepting specialization, a person sacrifices his or her own interests for the sake of society's interest.D) While specialization has enormous advantages, the costs outweigh them.E) Increased productivity is more likely to be achieved through specialization.Ans: E8. Which of the following is not an example of government regulation designed to curb a negative externality?A) Anti-child labor laws.B) Anti-pollution laws.C) A national sales tax.D) Legislation against strip mining.E) The Clean Air Act.Ans: C9. Prices in factor markets are primarily determined byA) government regulation.B) big business collusion.C) the interaction of business supply without household demand.D) the interaction of household supply with business demand.E) none of the above.Ans: D10. An economy dominated by imperfect competition is characterized byA) too much output, and low prices compared to perfect competition.B) same amount of output, and low prices compared to perfect competition.C) too little output, and low prices compared to perfect competition.D) too little output, and high prices compared to perfect competition.E) too much output, and high prices compared to perfect competition.Ans: D11. Which of the following is the key requirement for imperfect competition?A) Advertising.B) Many buyers.C) Many sellers.D) Ability of a buyer or seller to affect a good's price.E) Government policies.Ans: D12. Of the three basic problems in our modern economy, prices in a market system solve:A) what and for whom, but physical scientists solve how.B) what and how, but for whom is determined by social scientists.C) how and for whom, but Congress solves the what.D) each of the above, and no two are contradictory.E) none of the above is accurate.Ans: E13. Which of the following would best determine, in a market economy, the answer to the for whom question?A) Fairness.B) International trade patterns.C) Pricing of factors of production that people own.D) Cost minimization.E) Consumers' tastes and needs.Ans: C14. How goods are produced is determined by:A) consumer demand.B) government intervention to force businesses to produce goods cheaply.C) big business activity.D) business competition to buy factor inputs and sell goods most cheaply.E) none of the above.Ans: D15. A "mixed economy may involve both perfect and imperfect competition.Ans: TrueCHAPTER 31.If E were the old equilibrium in the market for wheat in the figure below, and E' the new one, which of the following could have caused the change?A) Consumer income rose, causing a supply shift.B) Bad weather caused a supply shift.C) Consumer income rose, causing a demand shift.D) Supply and demand both shifted.E) None of the above are plausible descriptions.Ans: C2. The demand curve for a normal good will shift to the left if:A) income increases.B) population increasesC) the price of a substitute good decreases.D) all the above.E) none of the above.Ans: C3. A price at which the amount people wish to buy exceeds the amount that people wish to produce (given upward-sloping supply curves):A) lies above the equilibrium, market clearing price.B) lies below the market clearing price.C) will induce a shift in the demand schedule to achieve equilibrium.D) is impossible.E) is none of the above.Ans: B4. An increase in the supply of commodity X for any given price of X could be expected to be caused byA) an increase in the prices of other commodities.B) an increase in the prices of factors of production important to this commodity.C) a reduction in the prices of factors of production important to this commodity.D) an increase in consumer income.E) none of the above.Ans: C5. Given the supply and demand curves drawn for a normal good in Figure 3-2, an increase in income can be expected to cause:A) equilibrium price and quantity to increase.B) equilibrium price to increase and equilibrium quantity to fall.C) equilibrium price to increase while equilibrium quantity holds steady.D) equilibrium price and quantity to fall.E) equilibrium price to fall and equilibrium quantity to climb.Ans: A6. Let P* and Q* represent market clearing price and quantity, respectively. Given the supply and demand curves drawn in Figure 3-2, an increase in the price of an input employed in the production of Q can be expected to cause:A) P* and Q* to climb.B) P* to climb while Q* falls.C) P* to climb while Q* holds steady.D) P* to fall while Q* climbs.E) P* and Q* to fall.Ans: B7. An increase in price will lead to a lower quantity demanded because:A) suppliers will supply only the smaller amount.B) quality deteriorates.C) people will purchase less of the good.D) all of the above.E) none of the above.Ans: C8. Upward-sloping supply curves are the result of:A) increasing returns to scale.B) increasing costs of production.C) changes in government policies.D) changes in technology.E) none of the aboveAns: E9. Suppose that at the current market price, the amount which producers wish to produce and sell exceeds the amount that consumers wish to purchase. This price:A) lies above the market clearing price.B) lies below the market clearing price.C) is impossible.D) will induce a shift in the demand schedule.E) none of the above.Ans: A10. In a competitive market, the market clearing quantity is determined primarily by:A) the supply of the good.B) the cost of producing the good in question.C) the interaction of supply and demand.D) the decisions of the buyers as to how much they are willing to pay.E) all of the above.Ans: E11.Let P* and Q* in Figure 3-4 represent market clearing price and quantity, respectively. Given the supply and demand curves drawn in Figure 3-4, a reduction in the price of a substitute good for Q can be expected to cause:A) P* and Q* to climb.B) P* to climb while Q* declines.C) P* to climb while Q* holds fixed.D) P* to fall while Q* climbs.E) P* and Q* to fall.Ans: E12. Let P* and Q* represent market clearing price and quantity, respectively. Given the supply and demand curves drawn in Figure 3-4, a reduction in the price of an input used in the production of Q can be expected to cause:A) P* and Q* to climb.B) P* to climb while Q* falls.C) P* to climb while Q* holds steady.D) P* to fall while Q* climbs.E) P* and Q* to fall.Ans: D13. Assume that automotive workers go on strike, so that the production of cars falls. Given the supply and demand curves in Figure 3-5, which of the following would result in comparison to the initial equilibrium position?A) Prices fall, Quantity fallsB) Prices rise, Quantity fallsC) Prices rise, Quantity risesD) Prices and Quantity do not change.E) None of the above.Ans: B14. Assume that A represents demand for cars and B represents supply of cars. If A: P = 10,000 - 2Q and B: P = 6000 + 2Q, the equilibrium price and quantity are:A) P = 1000, Q = 8000B) P = 800, Q = 100C) P = 8000, Q = 1000D) P = 100, Q = 800E) None of the above.Ans: C15. An increase in demand means a movement to a higher price along a given demand curve.Ans: FalseCHPATER 41. Rank the points A, B and C on the demand curve in the figure below in order of greatest to least elasticity of demand.A) C, A, B.B) B, A, C.C) A, B, C.D) They are of equal elasticity.E) More information is needed.Ans: C2. An increase in supply will lower price unless:A) supply is perfectly price inelastic.B) demand is perfectly price elastic.C) it is followed by a reduction in quantity demanded.D) demand is highly price inelastic.E) both demand and supply are highly price inelastic.Ans: B3. A straight-line demand curve has which of the following properties?A) Constant slope and varying price elasticity.B) Constant income elasticity with varying slope.C) Varying slope and varying cross elasticity.D) Constant slope and constant price elasticity.E) None of the above may be asserted in general.Ans: A4. If the burden of an excise tax is shifted forward completely onto the consumer, we can say that:A) supply is perfectly price elastic.B) demand is perfectly price elastic.C) demand is more price elastic than supply.D) supply is price inelastic and demand is price elastic.E) none of the above.Ans: A5. In "tight" housing markets, rent controls are often applied to hold the price of housing toa "reasonable" level. What is the immediate effect of this price policy with respect to the allocative functions of prices, and the relative incomes of tenants and landlords?A) The allocative function of prices is impaired, but the tenants are prevented from gaining at the expense of the landlords.B) The allocative function of prices is not impaired, and the tenants are prevented from gaining at the expense of landlords.C) The allocative function of prices is impaired, and the tenants who find housing gain at the expense of landlords.D) The allocative function of prices is not impaired, but the landlords gain at the expense of tenants who do not find housing.E) None of the above.Ans: C6. The price elasticity of supply shown in Figure 4-8 between points A and B is:A) .1.B) .5.C) 1.D) 5.E) none of the above.Ans: C7. Suppose that successive price reductions reduce total revenue. The supplier faces a demand curve that is, in this region:A) price elastic.B) unitary elastic.C) infinitely price elastic.D) indeterminate.E) price inelastic.Ans: E8. "If its advocates are correct, the minimum-wage bill passed by the House of Representatives would raise wages for nearly 7 million underpaid workers, but would have no noticeable effect on employment." The quotation implies that the demand for the labor services of the 7 million workers mentioned, with respect to the price of labor services, has elasticity equal to:A) 2.B) 5.C) 1.D) 0.E) .5Ans: D9. A horizontal demand curve may be described as:A) relatively price elastic.B) perfectly price inelastic.C) relatively price inelastic.D) perfectly price elastic.E) unit elastic.Ans: D10. f a good is in fixed supply, then the incidence of a taxA) falls entirely on the consumers.B) falls mostly on the producers and partly on consumers.C) falls entirely on the producers.D) depends on the elasticity of demand.E) none of the above.Ans: C11. Refer to the Figure 4-13. What is the elasticity of the demand curve DD between pointsA and B?A) 3.67B) 1.8C) 1.0D) 0.56E) None of the aboveAns: A12. Refer to Figure 4-13. What is the elasticity of the demand curve DD between points B and C?A) 3.33B) 1.8C) 1.0D) 0.56E) None of the aboveAns: B13. Refer to Figure 4-13. What is the elasticity of the demand curve DD between points C and D?A) 3.33B) 1.8C) 1.0D) 0.56E) None of the aboveAns: C14. If at a price of $8, quantity bought will be 3300 per day, and at $12, quantity bought will be 2700 per day, then the price elasticity of demand is approximately:A) 0.4B) 0.5C) 0.7D) 2.0E) 2.5Ans: B15. Given a relatively, but not perfectly, price elastic supply curve, an increase in demand will certainly:A) raise price but leave quantity sold unchanged.B) raise price and increase quantity sold.C) lower price, since supply cannot increase except through the inducement of higher price.D) reduce quantity sold but leave price unchanged.E) do none of the above, since "increase in demand" refers to a movement along a given demand curve.Ans: BCHAPTER 51.In the figure below, the drop in consumer surplus resulting from an increase in pricefrom 5 to 10 is given by the area:A) FGHB) CEHC) FGDCD) CEGFE) DEGAns: D2. A change in which of the following should not affect the demand for hot coffee?A) The price of coffee.B) The price of tea.C) Consumer incomes.D) The weather.E) All the above affect the demand for coffee.Ans: A3. The paradox of value notes that:A) there is no rational explanation why people should set a high value on objects such as diamonds, which have little real usefulness.B) the price obtained from selling any commodity may bear little relationship to the cost of producing it.C) supply and demand curves do very little to explain how value (or price) is determined.D) no one consumer has any control over the price (or value) of a commodity, but consumers collectively do have such control.E) there is no consistent relationship between the total utility obtained from any commodity and the price charged for it.Ans: E4. To be in equilibrium (i.e., to maximize satisfaction), the consumer must:A) purchase no inferior goods.B) equalize the marginal utilities of the last unit purchased of every commodity.C) be sure that the prices of all commodities purchased are proportional to their total utilities.D) be sure that the price of each good is equal to the marginal utility of money.E) allocate income so that the last penny spent on any good generates the same increment of utility as the last penny spent on any other good.Ans: E5. If I get 10 units of total utility (TU) from 2 oranges, 14 of TU from 3 oranges, and 17 of TU from 4 oranges, I obey the law of diminishing marginal utility because:A) MU falls as consumption increases.B) TU increases as consumption increases.C) TU > MU.D) MU > TU.E) MU = TU.Ans: A6. For a normal good, the substitution effect of a price increase:A) pushes the quantity demanded down along with the income effect.B) pushes the quantity demanded down enough that the income effect cannot push demand higher.C) pushes the quantity demanded up, but not enough to dominate an income effect that ultimately pushes demand down.D) has an effect on the quantity demanded that is identical to the income effect.E) pushes the quantity demanded up along with the income effect.Ans: A7. Table 5-1Total UtilityUnits 1 2 3 4 5Good X 120 216 288 336 360Good Y 90 160 220 270 305Refer to Table 5-1. If good X costs $6 per unit and good Y costs $5 per unit, at what quantities of X and Y is utility maximized if the budget is $31?A) X = 2, Y = 3B) X = 4, Y = 5C) X = 3, Y = 4D) X = 3, Y = 3E) None of the aboveAns: D8. Refer to Table 5-1. Suppose now X costs $8 per unit and Y costs $5 per unit. For what amounts of X and Y are (marginal utility)/price equal?A) X = 3, Y = 4B) X = 4, Y = 5C) X = 2, Y = 3D) X = 1, Y = 2E) None of the aboveAns: C9. Refer to Figure 5-6. What is total market demand at P = 5?A) 0B) 5C) 10D) 15E) None of the aboveAns: B10. Suppose Mary is currently spending all her income on cookies and milk. The marginal utility of cookies is 15, the price of cookies is $5, the marginal utility of milk is 10, and the price of milk is $1. To increase her total utility, Mary should:A) buy more cookies and less milk.B) buy more milk and fewer cookies.C) buy more of both goods.D) buy less of both goods.E) do nothing. She is currently maximizing utility with her limited budget.Ans: B11. The income effect describes:A) the percentage change in consumption of a good given some percentage change in the price of another good.B) the fact that when the price of a good falls, consumers will substitute it into their market baskets in place of relatively more expensive goods.C) the fact that when the price of a good falls, consumers will have more purchasing power with the same nominal income.D) the effect of a change in consumer income on the quantity of a good demanded.E) an upward-sloping demand curve.Ans: C12. Assume household income is $30, the price of X is $6 and the price of Y is $3. Refer to table 5-2. What quantities of X and Y will be purchased by the household?Marginal UtilityUnits 1 2 3 4 5 6 7Good X 72 48 30 24 18 12 6Good Y 60 42 30 15 10 5 2A) X = 2, Y = 6B) X = 3, Y = 4C) X = 3, Y = 3D) X = 4, Y = 2E) None of the aboveAns: B13. A good which sells for a higher price than one which is more important for welfare reflects the concept of:A) complementarity in demand.B) substitution.C) marginal or total utility.D) the paradox of value.E) law of diminishing marginal utility.Ans: D14. At my equilibrium demand choices for goods 1 and 2:A) MU1 = MU2B) MU1/Q1 = MU2/Q2C) MU1/P1 = MU2/P2D) P1 = P2E) none of the above.Ans: C15. The rule for rational budget allocation by a consumer is that the marginal utility of each good:A) purchased divided by its price must be equal.B) purchased multiplied by its price must be equal.C) must be zero.D) must be infinite.E) none of the above.Ans: ACHAPTER 61. The marginal product of labor is the:A) output which it could produce unaided by machinery or other factors of production.B) extra revenue which a firm will get by selling the output of one additional worker.C) amount of extra output that is produced when one extra worker is added to a fixed amount of other factors.D) amount of extra output that is produced when one worker is added and other factors of production are increased proportionately.E) none of the above.Ans: CTotal Product withVarious Input CombinationsLandLabor 10 15 200 0 0 01 20 20.67 20.52 38 39.33 40.03 54 57.00 58.54 68 72.67 76.05 80 87.33 92.56 90 102.00 108.02. Suppose that production is defined by the function recorded in the table above. The marginal product of the 4th unit of labor, given 20 units of land, is equal to:A) 15.5B) 17.5C) 19.0D) 1.5E) none of the aboveAns: B3. Suppose that production is defined by the function recorded in the table above. Given6 units of labor, the marginal product of increasing land from 10 units to 15 units is equal to:A) 15.B) 12.C) 3.D) 2.4.E) none of the above.Ans: D4. Suppose that production were represented by the production function displayed in the table above. You would conclude that:A) land displayed diminishing returns.B) labor displayed diminishing returns.C) production displayed constant returns to scale.D) all of the above were true.E) none of the above were true.Ans: D5. The law of diminishing returns is expressed in terms of an eventual decline in the:A) total product of an input.B) average product of an input.C) marginal product of an input.D) returns to scale of an input.E) broadest general productivity measures only.Ans: C6. The short run is a period of time so short that:A) output cannot be varied.B) at least one input is fixed.C) all inputs are fixed.D) all inputs are variable.E) none of the above.Ans: B7. For the law of diminishing returns to hold, the missing blank in this table must be:Quantity Totalof Labor Product0 01 -2 8A) 4.B) 2.C) more than 4.D) less than 4.E) 0.Ans: C8. Suppose that you have drawn a total product curve for labor given a specific technology. Now let some sort of technological change increase the productivity of labor. A new total product curve would have to be drawn:A) above the old with a steeper slope for any level of employment greater than zero.B) above the old with a flatter slope for any level of employment greater than zero.C) below the old with a steeper slope for any level of employment greater than zero.D) below the old with a flatter slope for any level of employment greater than zero.E) directly over the old curve signifying no change in the total product graph; only the marginal product graph would change.Ans: A9. Suppose that production of a particular good requires two inputs, labor (L) and capital (K). If K is fixed, which of the panels in Figure 6-2 possibly represent(s) decreasing marginal productivity of labor?A) Panel a.B) Panel b.C) Panel c.D) All of the above.E) None of the above.Ans: B10. Suppose that two inputs, K and L, are variable and increase at the same rate. Which one of the panels in Figure 6-2 represents Increasing Return to Scale (IRS)?A) Panel a.C) Panel c.D) Panel d.E) None of the above.Ans: C11. The production function is a technical law which:A) relates dollar inputs to dollar outputs.B) indicates the best way to combine outputs in the marketplace.C) indicates the best level of output to produce.D) describes a relationship between inputs and output in a production process.E) relates marginal products to factor prices.Ans: D12. Average product of labor measures:A) the addition to total output when an additional worker is hired.B) total product divided by total cost.C) the marginal product of the last worker multiplied by the wage rate.D) total product divided by the wage rate.E) total product divided by the quantity of labor.Ans: E13. The employment of which of the following inputs might be adjusted in the short run?A) Physical capital.B) Number of hours worked by labor.C) Units of energy required per unit output.D) Units of material required per unit output.E) None of the above.Ans: B14. When will the average product of labor increase?A) New technology improves the quality of capital used by labor.B) Marginal product of labor is increasing.C) Additional workers are hired.D) Both A and C.E) Both A and B.Ans: E15. As businesses grow, their need for capital typically tends to:。