From 9 to 10 A.M., Fred can sleep in, go to his economics lecture, or play tennis.
Suppose that Fred decides to go to the lecture but thinks that, if he hadn't, he would
otherwise have slept in. The opportunity cost of attending the lecture is
sleeping in and playing tennis.
sleeping in.
playing tennis.
one hour of time.
sleeping in one more hour.
Business people often speak about price elasticity without actually using the term.
Which of the following statements describes an elastic demand for a product?
"A price cut won't help me. It won’t increase my sales, and I’ll just get less money
for each unit that I was selling before."
"I don't think a price cut will help my bottom line any. Sure, I will sell a bit more,
but what I may gain by selling more, will not cover the loss because the price will
be lower."
"My customers are real shoppers. Since I cut my prices just a few cents below those
my competitors charge, customers have been flocking to my store and sales are
booming."
"The economic expansion has done wonders for my sales. With more people back at
work, my sales are taking off, and I don't even have to reduce my prices!"
None of the above.
An empirical economic article usually contains several sections as listed below:
I. Abstract II. Appendix III. Conclusion IV. Data Description
V. Introduction VI. Methodology VII. Results VIII. Review of Literature
Which of the following is a commonly preferred sequence?
I, II, V, IV, VI, VII, VIII, III
V, I, VIII, VI, IV, VII, II, III
V, I, II,VIII,VI, IV, VII, III
V, I, VI, IV, VII, VIII, III, II
I, V, VIII, VI, IV, VII, III, II
I, V, VI, IV, VII, III, II, VIII
What is/are the major difference(s) in defining and analyzing the Pareto optimal
solutions between the production economy and exchange economy?
The case of production economy has to specify the production inputs, but the
exchange economy has not to.
The case of production economy has to take the marginal rate of transformation into
account, but the exchange economy has not to.
The case of production economy implies that the market is competitive, but the
exchange economy assumes there are only two consumers.
The major difference is the number of agents involve.
Both (A) and (B).
None of the above.
Knowledge and charity for equal distribution of income can both be considered as
public goods. Which of the following reasons that makes these public goods to be
under-provided?
The property of rivalry.
The failure of BOT projects.
Free-rider problem.
National absorptive ability.
The number of congress votes.
The consumer collective preference.
Production theory can be applied to a large variety of daily activities. When it is used to
analyze the team sports, such as baseball, which of the following statements is
INCORRECT?
A team’s winning percentage could be declined as the number of star player
increases.
The major value of a team is derived from its fans' support.
The skills of the players and the ability of the manager are the major inputs to the
team's success.
It is impossible to estimate a baseball team's production function.
A professional baseball league can be treated as a profiteering enterprise, since we
can identify its objective function.
Both (B) and (C).
In order to get the demand curve for a firm for one of several variable factors of
production, we must consider
the internal effect of the change in the factor price.
the external effect of the change in the factor price.
monopolistic exploitation.
monopsonistic exploration.
Both (A) and (C).
Both (B) and (D).
Sales representatives are often paid on a commission-only basis (they do not have a
guaranteed wage or salary, but their pay is a percentage of the sales they make). This
method of pay represents an incentive scheme that helps employers avoid
beneficial selection.
moral hazard.
optimal-stopping
free-rider problem.
adverse selection.
None of the above.
Confucius said that "Do not make friend with those who are inferior to yourself." (子
曰:毋友不如己者。) Suppose a group of students can be sorted according to certain
criteria similar to the lexicographic ordering in consumer preference theory, then in a
Confucius world,
every body will make friend with the best student.
every body will make friends with all other students.
no body can make friend with any body else.
only the best student can make friends.
only the worst student can make friends.
The followings are the major stages of production and exchange in human economic
history. Place these stages in sequence from the earliest to the latest:
I. Machine technology and industrial capitalism
II. Hunting and food-gathering
III. Plow-agriculture and irrigation
IV. Pastoralism and digging-stick agriculture
V. Commercial capitalism
The correct sequence is:
II, III, IV, I, V
II, III, IV, V, I
II, IV, III, V, I
IV, II, III, I, V
IV, II, III, V, I
A monopoly will provide a Pareto-efficient level of output without regulation when
it engages in first degree price discrimination.
it bundles its products.
it engages in second degree price discrimination.
(A) and (B)
all of the above.
none of the above.
Printer manufacturers often sell their printers at very competitive prices and then mark
up the price of the cartridges. This is known as
bundling.
an arbitrage price.
non-linear pricing.
a tie-in-sale.
limit pricing.
predatory pricing.
A perfectly-competitive allocation of exchange always lies on the contract curve
because
a perfectly competitive market system will result in an efficient allocation of
resources.
every Pareto-efficient allocation is a social-welfare maximum.
every Pareto-efficient allocation is a market based equilibrium
none of the above.
all of the above.
If P(price) > SMC (short-run marginal cost),
efficiency is improved if more resources are allocated to the production of this
product.
efficiency is improved if fewer resources are allocated to the production of this
product.
what society is willing to pay for an additional unit of output exceeds the cost to
society for producing this additional output.
(A) and (C) are correct.
(B) and (C) are correct.
none of the above.
Which of the following statements is NOT true about the Cournot model?
Conjectural variations are zero
The firms make their independent decision sequentially.
Each firm sets MR = MC .
(B) and (C) are true.
All of the above are true.
Which of the following is an inefficiency of a monopoly?
A monopolist operates where P > SMC = LMC .
A monopolist does not operate at minimum efficient scale.
A monopolist may force consumers to purchase products that they do not want.
(A) and (B)
(A) and (C).
The dry cleaner located downtown near many offices charges a higher price than its
identical branch in a less populated area. This is an example of
Spatial differentiation.
Price discrimination.
Sweezy’s differentiation.
Tacit collusion.
Strategic complements.
The deadweight loss associated with moral hazard can be reduced by
inducing consumers to take some precautions.
charging a lower premium.
requiring individuals to be insured for100% of possible loss.
it cannot be reduced.
all of the above.
Refer to the example above, the equilibrium of this game, if played only once, is that
both firms charge a low price.
only Alpha charges a low price.
only Beta charges a low price.
both firms charge a high price.
none of the above.
Refer to the example above, if this game is repeated over an infinite or uncertain
horizon, the most likely observed behavior will be that
both firms charge a low price.
only Alpha charges a low price.
only Beta charges a low price.
both firms charge a high price.
none of the above.
Refer to the figure above, the producer would ________ the imposition of standards to a
Pigouvian tax because producer surplus is ________ under the standards approach.
prefer; higher
prefer; lower
not prefer; higher
not prefer; lower
If both firms behave as leader firms, then
Cournot equilibrium results.
Stackelberg equilibrium results.
Stackelberg disequilbrium results.
Bertrand equilibrium results.
Cournot and Bertrand equilibrium results.
The assumption of social diminishing marginal rates of substitution between consumer
utilities implies that society has
a negative compensated demand function.
endowment diffusion.
inequality aversion.
preference symmetry.
none of the above.
In the following table, Q stands for quantities of output, TVC for total variable costs,
MC for marginal costs, AVC for average variable costs, TFC for total fixed costs, TC
for total costs, AFC for average fixed costs, and ATC for average total costs. There are
24 blanks marked with letter (a), (b),…(z). Give a correct number for each blank and
write them down in alphabetical order in the answer sheet. (12 points. No point will be
given if answers are out of sequence.)
A consumer has preferences over the single good x and all other goods m represented
by the utility function: u(x,m) = ln(2x) + m . Let the price of x be p, the price of m be
unity, and let income be y. Fill in the answer to the following questions.
(1) The Marshallian demand function for x is ________.(3 分)
(2) The Marshallian demand function for m is ________.(3 分)
(3) The indirect utility function v(p, y) is ________.(2 分)
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