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 ( A ) I. Demand & Supply

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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 ( A ) I. Demand & Supply 1. The highest form of competition is called A. arbitrage. B. monopolistic competition. C. equilibrium. D. perfect competition. 2. Refer to Figure 1 The movement from Point A to Point B represents a(n) A. increase in the price. B. decrease in the quantity supplied. C. shift in the supply curve. D. Both a) and b) are correct. Figure 1 Price Supply 5 A B Another term for equilibrium price is A. dynamic price. B. market-clearing price. C. quantity-defining price. D. balance price. 4. 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. prices C. subsidies D. the Federal Reserve 5. Refer to Table A If these are the only four sellers in the market, then when the price increases from $4 to $6, the market quantity supplied A. decreases by 10 units. B. decreases by 20 units. C. increases by 10 units. D. increases by 20 units. Table A Price Firm A s Firm B s Firm C s Firm D s $ $ $ $ $ $ Ashley bakes bread that she sells at the local farmer s market. If she purchases a new convection oven that reduces the costs of baking bread, the A. supply curve for Ashley s bread will increase. B. demand curve for Ashley s bread will increase. C. supply curve for Ashley s bread will decrease. D. demand curve for Ashley s bread will decrease. 7. Which of the following events must cause equilibrium quantity to rise? A. demand increases and supply decreases B. demand and supply both decrease C. demand decreases and supply increases D. demand and supply both increase 8. Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity? A. An Increase in Demand & An Increase in Supply B. An Increase in Demand & A Decrease in Supply C. A Decrease in Demand & An Increase in Supply D. A Decrease in Demand & A Decrease in Supply 1

2 9. Refer to Table B If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $30, then there will be A. a shortage of 300 tickets. B. a surplus of 300 tickets. C. 600 tickets sold. D. 600 tickets unsold. Table B A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows: Price Demanded Demanded by Members by Non-members $ $ $ $ $ Between 2000 and 2006, the price of a PC fell and the quantity of PCs sold increased. Which of the explanations below is consistent with these facts? A. The demand for PCs increased by more than the supply of PCs increased. B. The supply of PCs increased by more than the demand for PCs increased. C. The demand for PCs decreased by more than the supply of PCs increased. D. Both the supply of PCs and the demand for PCs decreased. 11. If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts rightward, the equilibrium A. price of bottled water definitely increases. B. price of bottled water definitely decreases. C. quantity of bottled water definitely increases. D. quantity of bottled water definitely decreases. 12. Which of the following statements is correct? A. When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. B. When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. C. When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. D. When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same. 13. A change in demand means that A. more will be bought at a lower price B. a changed amount will be bought at the same given prices C. less will be purchased at a higher price D. the quantity demanded changes as the price changes 14. In accordance with the law of supply, if the price doubled, the quantity supplied would generally A. rise B. fall C. double D. drop by half 15. As price is lowered from a point higher than the equilibrium price, it will bring about A. an increase in demand B. a decrease in supply C. an increase in quantity demanded D. an increase in supply 16. The total quantity of a good that all buyers in the market would buy at various prices at a given time is known as A. individual demand B. conglomerate demand C. market demand D. additive demand 17. Which of the following would not lead to a change in demand for coffee? A. a change in the price of coffee B. a change in consumer preferences for coffee C. a change in the price of tea D. a change in consumers disposable incomes 2

3 II. Price Elasticity 18. Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth, A. Alice's demand for banana splits is perfectly inelastic. B. Alice's price elasticity of demand for banana splits is 1. C. Alice's income elasticity of demand for banana splits is 0. D. None of the above answers is correct. 19. The difference between slope and elasticity is that A. slope is a ratio of two changes and elasticity is a ratio of two percentage changes. B. slope is a ratio of two percentage changes and elasticity is a ratio of two changes. C. slope measures changes in quantity demanded more accurately than elasticity. D. none of the above; there is no difference between slope and elasticity. 20. If, for two goods, the cross-price elasticity of demand is 1.25, then A. the two goods are luxuries. B. the two goods are substitutes. C. one of the goods is normal and the other good is inferior. D. the demand for one of the goods conforms to the law of demand and the demand for the other good violates the law of demand. 21. An increase in the price of pure chocolate morsels from $2.25 to $2.45 causes suppliers of chocolate morsels to increase their quantity supplied from 125 bags per minute to 145 bags per minute. Supply is A. elastic and the price elasticity of supply is B. elastic and the price elasticity of supply is C. inelastic and the price elasticity of supply is D. inelastic and the price elasticity of supply is Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to A. increase the total revenue of wheat farmers. B. decrease the total revenue of wheat farmers. C. decrease the demand for wheat. D. decrease the supply of wheat. 23. Harry's Barber Shop increased its total monthly revenue from $1,500 to $1,800 when it raised the price of a haircut from $5 to $9. The price elasticity of demand for Harry's Haircuts is A B C D When her income increased from $10,000 to $20,000, Heather's consumption of macaroni decreased from 10 pounds to 5 pounds and her consumption of soy-burgers increased from 2 pounds to 4 pounds. We can conclude that for Heather, A. macaroni and soy-burgers are both normal goods with income elasticities equal to 1. B. macaroni is an inferior good and soy-burgers are normal goods; both have income elasticities of 1. C. macaroni is an inferior good with an income elasticity of -1 and soy-burgers are normal goods with an income elasticity of 1. D. macaroni and soy-burgers are both inferior goods with income elasticities equal to For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? A. There are no close substitutes for this good. B. The good is a luxury. C. The market for the good is broadly defined. D. The relevant time horizon is short. 3

4 26. Refer to Figure 2. If rectangle D is larger than rectangle A, then A. demand is elastic between prices P1 and P2. B. a decrease in price from P2 to P1 will cause an increase in total revenue. C. the magnitude of the percent change in price between P1 and P2 is smaller than the magnitude of the corresponding percent change in quantity demanded. D. All of the above are correct. Figure Price elasticity of demand measures A. how responsive suppliers are to price changes. B. how responsive sales are to changes in the price of a related good. C. how responsive quantity demanded is to a change in price. D. how responsive sales are to a change in buyers' incomes. 28. If demand is inelastic, the absolute value of the price elasticity of demand is A. one. B. less than one C. greater than one D. greater than the absolute value of the slope of the demand curve. 29. A demand curve which is represents perfectly inelastic demand, and a demand curve which is represents inelastic demand. A. downward sloping; vertical B. horizontal; downward sloping C. vertical; downward sloping D. upward sloping; horizontal 30. If demand is perfectly inelastic, the absolute value of the price elasticity of demand is A. zero. B. less than one. C. more than one. D. equal to the absolute value of the slope of the demand curve. 31. Jenna runs a small boutique in Capitola. She tells one of her suppliers that she is willing to pay $6 for a pair of wool hand warmers and not a dime more. On the basis of this information, what can you conclude about her price elasticity of demand for wool hand warmers? A. It is elastic. B. It is perfectly elastic. C. It is perfectly inelastic. D. The price elasticity coefficient is Which of the following statements about price elasticity of demand is false? A. The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope. B. If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic. C. The value of the price elasticity of demand along a downward-sloping demand curve is always negative. D. A linear downward-sloping demand curve has a varying price elasticity coefficient. 33. Which of the following statements is true about the price elasticity of demand along a downward sloping linear demand curve? A. It is inelastic at high prices and elastic at low prices. B. It is unit-elastic throughout the demand curve. C. It is elastic at high prices and inelastic at low prices. D. It is perfectly elastic at very high prices and perfectly inelastic at very low prices. 34. If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is A. unit-elastic. B. perfectly elastic. C. relatively inelastic. D. relatively elastic. 4

5 Answers 1 D 9 B 17 A 25 B 33 C 2 B 10 B 18 A 26 D 34 C 3 B 11 C 19 A 27 C 4 B 12 D 20 B 28 B 5 C 13 B 21 A 29 C 6 A 14 A 22 B 30 A 7 D 15 C 23 B 31 B 8 C 16 C 24 C 32 A 5