Quiz1试题及答案

KEY:

1-5 DABAC 6-10 CAABD 11-15 BACDD 16-20 CACDD

21-25 CCABA 26-30 BAAAB 31-35 DACBA 36-40 DDBCD

41-45 ABDCA 46-50 CDCAB

CLOZE: (51) through (52) negative (53) superb (54) putting in (55) whereas (56) challenge

(57) bear (58) patience (59) commit (60) progress (61) Come on (62) adjustment (63)

competent (64) appreciate (65) let down (66) give up (67) complaining (68) furthermore (69)

not to mention (70) represents

71-75 ADCDB 76-80 CCADB 81-85 DDBAC

Directions: Listen to the short dialogs, then choose the correct answers

to the questions. You will hear the recording twice. After the first

playing, there will be time for you to choose the correct answers. Use

the second playing to check your answers.

1. (Listen to the audio recording for the question.)

A. He has learned to make sounds like a cat.

B. He found food for the woman's cat.

C. He has become team captain.

D. He has attracted the woman's attention.

Your answer Correct answer

C C

2. (Listen to the audio recording for the question.)

A. The woman wants to play golf while the man wants to play

tennis.

B. The man wants to play golf while the woman wants to play

tennis.

C. Both the man and woman suggest playing golf.

D. Both the man and woman suggest playing tennis.

Your answer Correct answer

1 Econ 151 Quiz 1 Question 1 A. "When a worker's wage rate changes, there are two opposing effects—an income effect and a substitution effect." Explain the meaning of the quote. Answer: When the wage rate changes, two things occur simultaneously—the worker's purchasing power changes and the opportunity cost of leisure time changes. The income effect and the substitution effect reflect the change in leisure (or hours worked) that occur as a result of these two opposing forces. The income effect is the change in leisure consumption (or hours of work) due to the change in purchasing power conferred by the wage change, holding the wage at its initial value. The substitution effect, on the other hand, is the change in leisure consumption (or hours of work) that occurs due to the change in the opportunity cost of leisure, holding the worker at a given utility level (thus holding real purchasing power constant). B. Tom earns $15 per hour for up to 40 hours of work each week. He is paid $30 per hour for every hour in excess of 40. Tom faces a 20 percent tax rate and pays $4 per hour in child care expenses for each hour he works. Tom receives $80 in child support payments each week. There are 168 hours in the week. Derive and graph Tom’s weekly budget line. Answer: • If Tom does not work, he leisures for 168 hours and consumes $80. • For all hours Tom works up to his first 40, his after-tax and after-child care wage equals (80 percent of $15) – $4 = $8 per hour. Thus, if he works for 40 hours, he will be able to leisure for 128 hours and consume $80 + $8(40) = $400. • For all hours Tom works over 40, his after-tax and after-child care wage equals (80 percent of $30) – $4 = $20. Thus, if he works for 168 hours (128 hours at the overtime wage), he will not leisure at all, but he will consume $80 + $8(40) + $20(128) = $2,960. Tom’s weekly budget line is pictured below. Dollars of Consumption $2,960 $400 $80 128 168 Hours of Leisure 2 Question 2 A. How does an increase in non-labor income affect desired hours of work for a labor force participant? Use indifference curve analysis to illustrate and support your answer. State any assumptions that you make. Answer: Assuming leisure is a normal good, an increase in non-labor income moves the individual to a higher indifference curve that is steeper than the new budget constraint at the initial level of leisure consumption. The extra non-labor income increases the value of the marginal hour of leisure. Because the indifference curve is steeper than the budget line at the initial level of leisure consumption following the increase in non-labor income, the individual is willing to sacrifice more income to obtain an additional hour of leisure time than is necessitated given the current wage. Working fewer hours and enjoying more leisure, therefore, will raise the individual's utility further still. The individual should move to a point of tangency between an indifference curve and the new budget line, which will be to the right of the point reflecting the original level of leisure consumption on the new budget line.. B. Jack currently works 38 hours per week at a wage rate of $15 per hour. His marginal rate of substitution is $20 per hour. Is Jack's utility maximized? If yes, explain why. If no, explain why not and discuss what Jack should do in order to further increase utility. Answer: Jack's utility isn't maximized. His MRS implies he's willing to sacrifice $20 in order to enjoy an additional hour of leisure. Given his wage rate, however, he only gives up $15 by working one less hour. Hence working fewer hours will increase his utility level as he sacrifices less income than he's willing to in order to enjoy more leisure time. Jack should substitute leisure for income (i.e., work fewer hours) to the point where his MRS equals $15. Question 3 A. Suppose that the marginal revenue product function for the firm is MRPL = 40 - .75L. Assume that the firm hires labor in a competitive labor market at a wage of W = $10 per hour. Explain why employment of L = 20 is not profit maximizing (show exactly how profit could be increased). What is the profit maximizing level of employment for this firm? Answer: L = 20 is not profit maximizing because MRP > W at this employment level. Given L = 20, MRP = $25 while W = $10. Hence the marginal worker contributes considerably more to revenue than to cost at L = 20. The firm should expand employment as long as MRP > W = $10, as employment of all such workers is profit increasing. The profit maximizing level of employment occurs where MRP = W, which is at L = 40 in this problem. B. In constructing a model of firm-level labor demand, we assume that labor is subject to diminishing marginal productivity. Explain the rationale for this assumption. Answer: The marginal product of labor is the extra output produced by an additional unit of labor, given that other factors of production such as capital are held fixed. As labor is added initially to fixed capital stock, it may be the case that the output of the marginal worker increases due to productivity gains from specialization and division of labor. As labor is added to fixed capital, however, the amount of capital per worker becomes progressively reduced and this has an adverse consequence for labor productivity at the margin. Once gains from specialization and division of labor are exhausted, decreasing capital per worker ultimately causes the output of the marginal worker to become progressively smaller as the amount of labor is increased. In essence, with fixed capital, the firm's capital stock is spread too thin as the firm expands employment of labor.

3.

(Points: 0.5) Derivative securities are:

a. potentially dangerous because they are highly leveraged.

b. an effective tool to better manage business returns and risk.

c. always structured as option contracts.

d. both A and B are true.

e. all of the above are true.

In the event of the firm's bankruptcy:

a. the most shareholders can lose is their original investment in the firm's stock.

b. common shareholders are the first in line to receive their claims on the firm's assets.

c. bondholders have claim to what is left from the liquidation of the firm's assets after paying

the shareholders.

d. the claims of preferred shareholders are honored before those of the common shareholders.

e. A and D.

Exchange Traded Funds are

a. Open end funds

b. Traded in both primary market and secondary market simultaneously