國立高雄第一科技大學管理學院暨財金學院 學年度第 1 學期經濟學期中會考題目卷 ( B )

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1 國立高雄第一科技大學管理學院暨財金學院 學年度第 1 學期經濟學期中會考題目卷 ( B ) 1. In general, elasticity is a measure of A. the extent to which advances in technology are adopted by producers B. the extent to which a market is competitive. C. how firms profits respond to changes in market prices. D. how much buyers and sellers respond to changes in market conditions. 2. When consumers face rising gasoline prices, they typically A. reduce their quantity demanded more in the long run than in the short run. B. reduce their quantity demanded more in the short run than in the long run. C. do not reduce their quantity demanded in the short run or the long run. D. increase their quantity demanded in the short run but reduce their quantity demanded in the long run. 3. The price elasticity of demand measures A. buyers responsiveness to a change in the price of a good. B. the extent to which demand increases as additional buyers enter the market. C. how much more of a good consumers will demand when incomes rise. D. the movement along a supply curve when there is a change in demand. 4. Demand is said to be price elastic if A. the price of the good responds substantially to changes in demand. B. demand shifts substantially when income or the expected future price of the good changes. C. buyers do not respond much to changes in the price of the good. D. buyers respond substantially to changes in the price of the good. 5. The smaller the price elasticity of demand, the A. more likely the product is a luxury. B. smaller the responsiveness of quantity demanded to a change in price. C. more substitutes the product has. D. greater the responsiveness of quantity demanded to a change in price. 6. A good will have a more elastic demand, the A. greater the availability of close substitutes. B. more broad the definition of the market. C. shorter the period of time. D. more it is regarded as a necessity. 7. When the price of candy bars is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demanded increases to 600. Given this information and using the midpoint method, we know that the demand for candy bars is A. inelastic. B. elastic. C. unit elastic. D. perfectly inelastic. 8. Using the midpoint method, the price elasticity of demand for a good is computed to be approximately Which of the following events is consistent with a 10 percent decrease in the quantity of the good demanded? A. a 7.5 increase in the price of the good B. a percent increase in the price of the good C. an increase in the price of the good from $7.50 to $10 D. an increase in the price of the good from $10 to $

2 9. Studies indicate that the price elasticity of demand for beer is about 0.9. A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20. According to the midpoint method, the government policy should have reduced beer consumption by A. 30%. B. 40%. C. 60%. D. 74%. 10. Which of the following could be the price elasticity of demand for a good for which a decrease in price would decrease revenue? A. 0.8 B. 1 C. 1.8 D For which of the following types of goods would the income elasticity of demand be positive and relatively large? A. all inferior goods B. all normal goods C. goods for which there are many complements D. luxuries 12. If the cross-price elasticity of demand for two goods is -4.5, then A. the two goods are substitutes. B. the two goods are complements. C. one of the goods is normal while the other good is inferior. D. one of the goods is a luxury while the other good is a necessity. 13. Which of the following is not an example of a public policy? A. rent-control laws B. minimum-wage laws C. taxes D. equilibrium laws 14. Rent-control laws dictate A. the exact rent that landlords must charge tenants. B. a maximum rent that landlords may charge tenants. C. a minimum rent that landlords may charge tenants. D. both a minimum rent and a maximum rent that landlords may charge tenants. 15. Policymakers use taxes A. to raise revenue for public purposes but not to influence market outcomes. B. both to raise revenue for public purposes and to influence market outcomes. C. when they realize that price controls alone are insufficient to correct market inequities. D. only in those markets in which the burden of the tax falls clearly on the sellers. 16. If a price ceiling is not binding, then A. the equilibrium price is above the price ceiling. B. the equilibrium price is below the price ceiling. C. it has no legal enforcement mechanism. D. None of the above is correct because all price ceilings must be binding. 17. A binding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price. A. (i) only B. (iii) only C. (i) and (iii) only D. (ii) and (iv) only 2

3 18. Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor, A. quantity demanded decreases. B. quantity supplied increases. C. there is a surplus. D. All of the above are correct. 19. Welfare economics is the study of how A. the allocation of resources affects economic well-being. B. a price ceiling compares to a price floor. C. the government helps poor people. D. a consumer s optimal choice affects her demand curve. 20. A consumer's willingness to pay directly measures A. the extent to which advertising and other external forces have influenced the consumer s preferences. B. the cost of a good to the buyer. C. how much a buyer values a good. D. consumer surplus. 21. Bob purchases a book for $6, and his consumer surplus is $2. How much is Bob willing to pay for the book? A. $6. B. $2. C. $8. D. $ Chuck would be willing to pay $20 to attend a dog show, but he buys a ticket for $15. Chuck values the dog show at A. $5. B. $15. C. $20. D. $ All else equal, what happens to consumer surplus if the price of a good decreases? A. Consumer surplus increases. B. Consumer surplus decreases. C. Consumer surplus is unchanged. D. Consumer surplus may increase, decrease, or remain unchanged. 24. Suppose the demand for peaches decreases. What will happen to producer surplus in the market for peaches? A. It increases. B. It decreases. C. It remains unchanged. D. It may increase, decrease, or remain unchanged. 25. Which of the following tools help us evaluate how taxes affect economic well-being? (i) consumer surplus (ii) producer surplus (iii) tax revenue (iv) deadweight loss A. (i) and (ii) only B. (i), (ii), and (iii) only C. (iii) and (iv) only D. (i), (ii), (iii), and (iv) 26. When a tax is levied on a good, the buyers and sellers of the good share the burden, A. provided the tax is levied on the sellers. B. provided the tax is levied on the buyers. C. provided a portion of the tax is levied on the buyers, with the remaining portion levied on the sellers. D. regardless of how the tax is levied. 27. A tax levied on the sellers of a good shifts the A. supply curve upward (or to the left). B. supply curve downward (or to the right). C. demand curve upward (or to the right). D. demand curve downward (or to the left). 3

4 28. Other things equal, the deadweight loss of a tax A. decreases as the size of the tax increases. B. increases as the size of the tax increases, but the increase in the deadweight loss is less rapid than the increase in the size of the tax. C. increases as the size of the tax increases, and the increase in the deadweight loss is more rapid than the increase in the size of the tax. D. increases as the price elasticities of demand and/or supply increase, but the deadweight loss does not change as the size of the tax increases. 29. Suppose that Amanda receives a pay increase. We would expect A. Amanda's demand for each of two goods that are complements to increase. B. Amanda's demand for normal goods to decrease. C. to observe Amanda moving down and to the right along her given demand curve. D. Amanda's demand for inferior goods to decrease. 30. A production possibilities frontier shifts outward when A. the desires of the economy s citizens change. B. at least one of the basic principles of economics is violated. C. the economy experiences economic growth. D. opportunity costs are lessened. 31. When an economist evaluates a positive statement, he or she is primarily A. concerned with making a sound decision on how the world ought to be. B. examining evidence. C. evaluating values as well as facts. D. acting as a policy adviser. 32. Refer to Table 1. Miguel has an absolute advantage in the production of A. both goods and a comparative advantage in the production of mixers. B. both goods and a comparative advantage in the production of toasters. C. neither good and a comparative advantage in the production of toasters. D. neither good and a comparative advantage in the production of mixers. Table 1 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Hours Needed To Make 1 Amount Produced in 40 Hours mixer toaster mixers toasters Maya Miguel Tom Brady should pay someone else to mow his lawn instead of mowing it himself, unless A. Brady s opportunity cost of mowing his lawn is higher than it is for everyone else. B. Brady has an absolute advantage over everyone else in mowing his lawn. C. Brady has a comparative advantage over everyone else in mowing his lawn. D. All of the above are correct. 34. Which of the following is not correct about most economic models? A. They are composed of equations and diagrams. B. They omit many features of the real-world economy. C. They contribute very little to economists understanding of the real world. D. In constructing models, economists make assumptions. 35. Which of the following changes would not shift the supply curve for a good or service? A. a change in expectations about the future price of the good or service B. a change in production technology C. a change in the price of the good or service D. a change in input prices 36. The following table contains a demand schedule for a good. Price Quantity Demanded $ $20 Q1 If the law of demand applies to this good, then Q1 could be 4

5 A B C D. 0. Figure Refer to Figure 1. Unemployment could cause this economy to produce at which point(s)? ovens A. K, N J B. J, L C. J,L,M D. M K L M N pans 38. Which of the following is not correct? A. David Ricardo argued that Britain should not restrict imports of grain. B. The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time. C. Economists opposition to trade restrictions is still based largely on the principle of absolute advantage. D. Economists are generally united in their support of free trade. 39. Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra? A. the government B. subsidies C. prices D. the Federal Reserve 40. A market supply curve shows how the total quantity supplied of a good varies as A. input prices vary. B. production technology varies. C. price varies. D. demand varies. 41. Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a A. shortage to exist and the market price of roses to decrease. B. shortage to exist and the market price of roses to increase. C. surplus to exist and the market price of roses to increase. D. surplus to exist and the market price of roses to decrease. 42. Refer to Figure 2. Azerbaijan should specialize in the production of A. bolts and import nails. B. nails and import bolts. C. both goods and import neither good. D. neither good and import both goods. Figure 2 Uzbekistan s Production Possibilities Frontier Azerbaijan s Production Possibilities Frontier 100 nails 100 nails bolts bolts 5

6 43. If macaroni and cheese is an inferior good, then an increase in A. the price will cause the demand curve for macaroni and cheese to shift to the left. B. the price will cause the demand curve for macaroni and cheese to shift to the right. C. a consumer s income will cause the demand curve for macaroni and cheese to shift to the left. D. a consumer s income will cause the demand curve for macaroni and cheese to shift to the right. 44. Refer to Figure 3. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good? A. Point C to Point D B. Point A to Point B C. Point A to Point D D. Point C to Point B Figure 3 Price A D C Supply 1 Supply 2 B Demand 1 Demand 2 Quantity 45. Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth A. is less equal and less efficient for society. B. is more efficient and more equal for society. C. is more efficient but less equal for society. D. is more equal but less efficient for society. 46. A production possibilities frontier can shift outward if A. government increases the amount of money in the economy. B. there is a technological improvement. C. resources are shifted from the production of one good to the production of the other good. D. the economy abandons inefficient production methods in favor of efficient production methods. 47. When two countries trade with one another, it is most likely because A. the opportunity costs of producing various goods are identical for the two countries. B. some people involved in the trade do not understand that one of the two countries will become worse-off because of the trade. C. the wealthy people in each of the two countries are able to benefit, through trade, by taking advantage of other people who are poor. D. the two countries wish to take advantage of the principle of comparative advantage. 48. The overriding reason why households and societies face many decisions is that A. goods and services are not scarce. B. resources are scarce. C. incomes fluctuate with business cycles. D. people, by nature, tend to disagree. 49. In less than two years in the early 1920s, the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks. This is a spectacular example of A. inflation caused by increased productivity in the economy. B. market power caused by a single firm controlling the newspaper production. C. inflation caused by an increase in the quantity of money in the economy. D. market power caused by a change in the country s standard of living. 50. What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell? A. Quantity would rise, and the effect on price would be ambiguous. B. Price would rise, and the effect on quantity would be ambiguous. C. Price would fall, and the effect on quantity would be ambiguous. D. Quantity would fall, and the effect on price would be ambiguous. 6