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标题: Economics 【Reading 13】Sample [打印本页]
作者: JustasS    时间: 2012-3-24 15:18     标题: [2012 L1] Economics 【Session 4 - Reading 13】Sample

An internal combustion engine is best described as a(n):
A)
intermediate good.
B)
finished good.
C)
factor of production.


Engines are most likely to be considered intermediate goods because they are used in the production of such finished goods as motor vehicles. They are unlikely to be considered finished goods, even though consumers might occasionally purchase them, because their primary use is in the production of other goods that are driven by engines.
作者: JustasS    时间: 2012-3-24 15:19

A supply function for leather shoes is most likely to include:
A)
Average hourly wage for leather workers.
B)
Average income for all workers.
C)
Price of plastic shoes.


A supply function will depend on the price of inputs to production of leather shoes, such as wages for leather workers. A demand function for leather shoes will likely depend on, among other factors, the price of plastic shoes (a substitute) and average income of all workers (who would be consumers of shoes).
作者: JustasS    时间: 2012-3-24 15:20

The most likely cause for a shift in the supply curve for coffee is a change in the:
A)
price of coffee.
B)
wages of coffee harvesters.
C)
price of tea.


The supply curve shifts in response to a change in the cost of inputs, such as the wages for coffee harvesters. A change in the price of the product is a movement along the supply curve, not a shift in the curve. A change in the price of a substitute would more likely influence the demand curve, not the supply curve.
作者: JustasS    时间: 2012-3-24 15:20

A columnist is discussing how the efficient quantity of output for a good or service is determined. These two statements appear in his column:

Statement 1: The equilibrium quantity of production for a good or service can be considered efficient as long as the marginal social benefit of that quantity is greater than its marginal social cost.
Statement 2: Subsidies and quotas typically result in production of a good or service in quantities at which the marginal social cost exceeds the marginal social benefit.

With respect to these statements:
A)
both are correct.
B)
only one is correct.
C)
both are incorrect.


Statement 1 is incorrect. The efficient quantity of output is the quantity at which the marginal social benefit (demand) is equal to the marginal social cost (supply). Statement 2 is also incorrect. Subsidies typically lead to overproduction, where the marginal social cost at the quantity produced is greater than the marginal social benefit. Quotas, however, typically limit production to a level below equilibrium, such that the marginal social benefit at the quantity produced is greater than the marginal social cost.
作者: JustasS    时间: 2012-3-24 15:21

If a change in consumer tastes causes a permanent downward shift in demand for hats, but there are no changes in the cost of inputs to production of hats, the most likely market response would be:
A)
a short-run shift in the supply curve, causing a decline in the price of hats.
B)
no change in the price of hats because the costs of production have not changed.
C)
a short-term movement along the supply curve to a lower equilibrium price, and a long-run shift in supply.


If the costs of production do not change, the supply curve for hats will not shift in the short run in response to a decrease in demand. Instead, there will be a movement along the supply curve to a new, lower, equilibrium price, followed by a long-run shift in the supply curve as producers exit the business.
作者: JustasS    时间: 2012-3-24 15:22

A stable market equilibrium is best described as one in which:
A)
excess supply drives prices lower and excess demand drives prices higher.
B)
the current market price equals the equilibrium price.
C)
the supply curve is less steeply sloped than the demand curve.


Stable market equilibria are defined as those in which excess supply tends to drive prices lower and excess demand tends to drive prices higher. Unstable equilibria are characterized by a downward sloping supply curve that is less steeply sloped than the demand curve, so that excess supply tends to drive prices up and excess demand tends to drive prices down (further away from the equilibrium value). The current market price and the equilibrium price can be equal in either stable or unstable equilibria.
作者: JustasS    时间: 2012-3-24 15:23

The market for radios consists of 100 consumers, each of whom has the demand function:
QDradio = 4 − 0.4 Pradio + 0.0025 Income + 0.25 Pnewspaper − 0.005 Pbatteries


At current average prices, a radio costs £10, a newspaper costs £1, and batteries cost £2. Average income is £1,000. The market demand curve for radios is most accurately described as:
A)
16.85 − 0.025 QDradio.
B)
400 − 40 Pradio + 0.25 Income + 25 Pnewspaper − 0.5 Pbatteries.
C)
674 − 40 Pradio.


Aggregating the individual demand functions into the market demand function we get:
QDradio = 100(4 − 0.4 Pradio + 0.0025 Income + 0.25 Pnewspaper − 0.005 Pbatteries)
QDradio = 400 − 40 Pradio + 0.25 Income + 25 Pnewspaper − 0.5 Pbatteries
Substituting average values for all variables except price we get:
QDradio = 400 − 40 Pradio + 0.25(1,000) + 25(1) − 0.5(2)
QDradio = 400 − 40 Pradio + 250 + 25 − 1
QDradio = 674 − 40 Pradio
40 Pradio = 674 − QDradio
Solving for price gives us the demand curve:
Pradio = 16.85 − 0.025 QDradio
作者: JustasS    时间: 2012-3-24 15:23

The demand function for textbooks is given by 100 − 2P, and the supply function is given by 2P − 10. At a price of 30, the market:
A)
has excess demand of 10.
B)
has excess supply of 10.
C)
is in equilibrium with quantity supplied and demanded equal to 45.


At a price of 30, quantity demanded = 100 − 2(30) = 40, and quantity supplied = 2(30) − 10 = 50. Excess supply = 50 − 40 = 10.
作者: cyber21    时间: 2012-3-24 15:25

Which of the following statements best describes the principal difference between a Vickrey auction and other types of sealed bid auctions?
A)
A Vickrey auction does not use sealed bids.
B)
In a Vickrey auction, the winner pays the price bid by the second-highest bidder.
C)
In a Vickrey auction, the winner pays the reservation price.


A Vickrey auction is a second-price sealed bid auction, in which the winner pays the price bid by the second highest bidder. The reservation price is the highest price that a bidder is willing to pay. In a second price sealed bid auction, a bidder’s optimal strategy is to bid his reservation price. Because he pays the second highest bid, the winner pays less than his reservation price.
作者: cyber21    时间: 2012-3-24 15:26

Which of the following most accurately describes society's allocation of resources to the production of goods with external costs or external benefits, respectively?
A)
Under-allocation; over-allocation.
B)
Over-allocation; under allocation.
C)
Over-allocation; over-allocation.


External costs are costs associated with the production of goods which are not entirely borne by producers. The industrial pollution of fishing waters decreases the yield to the fishing industry. However, the lost revenue to the fishing industry is not considered a cost to the firms generating the pollution. The result is an over-allocation of resources to the production of goods made by the firms generating the pollution.
External benefits refer to benefits received by those other than the buyers of a good. Scenic gardens and fountains built by private enterprises for their own interests are examples of goods with external benefits. Since the marginal benefit to society is greater than that of the marginal cost to the producer, less than the efficient quantity is produced.
作者: cyber21    时间: 2012-3-24 15:27

Which of the following is least likely to be an obstacle to the efficient allocation of resources?
A)
Common resources.
B)
Price controls.
C)
Technological advancement.


As opposed to being an obstacle to allocative efficiency, technological advancement requires a constant reallocation of an economy’s resources to more efficient uses.
作者: cyber21    时间: 2012-3-24 15:27

Which of the following is least accurate regarding obstacles to the efficient allocation of resources in a competitive market?
A)
Subsidies lead to production of more than the efficient quantity of the good.
B)
Quotas result in production of less than the efficient quantity of the good.
C)
Public goods, such as national defense, tend to be overproduced because they can be consumed by everyone whether they pay for the goods or not.


Public goods can be consumed by every member of a society, regardless of whether they paid for them or not. In a competitive market for public goods, fewer goods than the efficient quantity would be produced because it is not in each person’s interest to pay their share of the cost.
作者: cyber21    时间: 2012-3-24 15:27

Which of the following relationships most accurately describes the inefficiency resulting from government imposed production quotas?
A)
Marginal cost exceeds marginal benefit leading to underproduction.
B)
Marginal benefit exceeds marginal cost leading to overproduction.
C)
Marginal benefit exceeds marginal cost leading to underproduction.


Government imposed quotas restrict production to a level below that which would occur if marginal benefit equals marginal cost. This restricted output quantity is less than the equilibrium quantity, so marginal benefit exceeds marginal cost.
作者: cyber21    时间: 2012-3-24 15:28

Which of the following statements regarding deadweight loss is least accurate?
A)
An overproduction of goods can lead to a reduction in consumer surplus.
B)
Deadweight loss from underproduction leads to a loss of producer surplus but not consumer surplus.
C)
Deadweight loss occurs when the quantity supplied does not maximize the sum of consumer and producer surplus.


Deadweight loss is the reduction in consumer and producer surplus due to underproduction or overproduction.
作者: cyber21    时间: 2012-3-24 15:28

Which of the following is least likely to be considered an obstacle to the efficient allocation of an economy’s resources?
A)
Rent controls.
B)
Taxes.
C)
Changes in consumer tastes.


Price controls and taxes are obstacles to allocative efficiency. Rent controls and minimum wages are examples of price controls. As opposed to being obstacles to the efficient allocation of resources, changes in consumer tastes lead to the reallocation of society’s resources, producing a different mix of goods or services that provide increased benefits.
作者: cyber21    时间: 2012-3-24 15:28

When a tax is imposed on the consumption of a good, which of the following terms refers to who bears the burden of the tax?
A)
The deadweight loss.
B)
The incidence of a tax.
C)
Consumer surplus.


The incidence of a tax refers to how the burden of a tax is actually shared between buyers and sellers. The deadweight loss is the loss of the gains from trade from the lower equilibrium quantity that results from the tax. Consumer surplus is the gains from trade that consumers accrue from the existence of the market.
作者: cyber21    时间: 2012-3-24 15:29

Which of the following statements is most accurate with respect to the effects of taxes imposed on goods and services?
A)
The actual incidence will fall more heavily on the seller if the supply is less elastic relative to demand.
B)
The actual incidence will fall more heavily on the buyer if the demand is more elastic relative to supply.
C)
The statutory incidence will fall more heavily on the buyer if the supply is less elastic relative to demand.


When supply is relatively inelastic, changes in quantity are small for a given change in price, and a larger share of the tax burden—the tax incidence—will fall on the sellers.
作者: cyber21    时间: 2012-3-24 15:29

The decrease in production and trade as a result of a tax is called:
A)
total tax incidence.
B)
statutory incidence.
C)
deadweight loss.


When the equilibrium quantity for a product or service is reduced as the result of a tax, this is called the deadweight loss. This represents the loss, in terms of production and trade, that results from the presence of the tax.
作者: cyber21    时间: 2012-3-24 15:29

When a tax on a good or service is imposed on the producers of the good or service, the:
A)
supply will decrease, but the incidence of the tax falls on the sellers only.
B)
supply will decrease, but the incidence of the tax falls on both buyers and sellers.
C)
demand will decrease, but the incidence of the tax falls on both buyers and sellers.


When a tax is imposed on the producers of a good or service, they will reduce supply at any given level or market price, because they receive the market price minus the tax. However, the incidence of the tax, meaning how its cost is shared, falls on both the buyers and the sellers, depending upon the relative elasticities of supply and demand.
作者: cyber21    时间: 2012-3-24 15:30

The actual incidence of a tax imposed on buyers or sellers is most accurately defined as:
A)
the amount of tax times the equilibrium quantity.
B)
the proportion of the tax burden borne by buyers and sellers.
C)
the party legally responsible for paying the tax.


Tax revenue is the amount of a tax times the equilibrium quantity. Statutory tax incidence refers to who is legally responsible for paying a tax. Actual tax incidence represents the extent to which buyers bear the cost of the tax through a higher price paid and sellers bear the cost through a lower price received.
作者: cyber21    时间: 2012-3-24 15:30

Which of the following statements about a tax imposed on buyers or suppliers is most accurate?
A)
If demand is less elastic than supply, consumers will bear a lower proportion of the tax than suppliers.
B)
The proportion of the tax is borne equally by consumers and suppliers, regardless of supply and demand elasticity.
C)
If demand is less elastic than supply, consumers will bear a higher proportion of the tax than suppliers.


If demand is less elastic than supply, consumers will bear a higher proportion of the tax than suppliers. If supply is less elastic than demand, suppliers will bear a higher proportion of the tax than consumers.
作者: cyber21    时间: 2012-3-24 15:30

Which of the following is the most likely effect of a subsidy in the market for corn?
A)
The supply curve for corn will shift to the right.
B)
Marginal costs will be less than marginal benefit.
C)
The equilibrium quantity of corn will decrease.


A subsidy causes a shift rightward in the supply curve (increase in supply at a given price level) by the amount of the subsidy. The equilibrium quantity will increase and the price paid by buyers will decrease. Marginal cost will exceed marginal benefit and a deadweight loss will result from overproduction.
作者: cyber21    时间: 2012-3-24 15:31

An example of a price floor is:
A)
a minimum price for milk.
B)
a tax on ceramic tile.
C)
rent control.


A price floor is a minimum on the price that suppliers can charge. Such floors were once common in agricultural markets.
作者: cyber21    时间: 2012-3-24 15:31

Which of the following is the most likely effect of a quota on wheat?
A)
The supply curve will shift downward.
B)
Nothing if the quota is set above the equilibrium quantity.
C)
Marginal costs will be greater than marginal benefit.


A quota does not cause the supply curve to shift. The equilibrium quantity will decrease to the quota amount. Marginal cost will be less than marginal benefit, leading to a deadweight loss from underproduction.
作者: cyber21    时间: 2012-3-24 15:31

The imposition of a tax on producers but not on buyers in a market currently in equilibrium is most likely to increase:
A)
price paid by buyers and reduce quantity demanded.
B)
quantity supplied and price paid by buyers.
C)
actual tax incidence on producers but not on buyers.


The imposition of a tax on producers is likely to result in an upward shift in the supply curve, a reduction in the equilibrium quantity supplied and demanded, an increase in equilibrium price, and an increase in taxes paid by both suppliers and buyers. Actual tax incidence refers to taxes paid and not statutory taxes, thus actual tax incidence is likely to rise on both producers and buyers as market prices rise.
作者: cyber21    时间: 2012-3-24 15:32

Which of the following most accurately describes the impact of a price ceiling set below the equilibrium price for a good and a minimum wage set above the equilibrium wage, respectively?
A)
Shortage; increased unemployment.
B)
Shortage; decreased unemployment.
C)
Surplus; increased unemployment.


A ceiling that is below the equilibrium price for a good will result in a shortage characterized by a quantity demanded that is greater than the quantity supplied. A minimum wage leads to increased unemployment as firms tend to substitute capital for labor. Even though there are often a large number of unemployed low-skilled workers who may be willing to work at a wage lower than the minimum wage, firms cannot legally hire them.
作者: cyber21    时间: 2012-3-24 15:32

The effect of a price ceiling set above the equilibrium price is most accurately described by which of the following statements?
A)
It will have no effect on equilibrium price and quantity.
B)
Quantity demanded will exceed quantity supplied.
C)
Quantity supplied will exceed quantity demanded.


If a price ceiling is above the equilibrium price, it will have no effect on price or quantity.
作者: cyber21    时间: 2012-3-24 15:33

Which of the following is least likely to be the long-run effect of a price ceiling that is set below the equilibrium price?
A)
Consumers have to wait to make purchases.
B)
Sellers improve quality.
C)
Sellers take bribes.


Under price ceilings, sellers may reduce the quality of goods to a level that reflects the imposed ceiling price.
作者: cyber21    时间: 2012-3-24 15:33

If a price ceiling is above the equilibrium price in a given market, its effect will most likely be:
A)
nothing.
B)
a surplus.
C)
a shortage.


A ceiling is only effective if it is below the equilibrium price. If it is above the equilibrium price, then it should have no effect. If the ceiling is below the equilibrium price, it will produce a shortage. In such a case, suppliers do not produce as much as consumers wish to buy at the ceiling price.
作者: cyber21    时间: 2012-3-24 15:33

New legislation setting a price ceiling will most likely cause:
A)
a market surplus.
B)
a decrease in demand.
C)
a market shortage.


Price ceilings restrict the producer from increasing the selling price. The lower price will stimulate demand by consumers at this lower price. However, since producers will not be able to increase price there is little incentive for them to increase supply. Hence, production and supply will be limited at the price ceiling leading to a market shortage.
作者: cyber21    时间: 2012-3-24 15:34

Which of the following statements about price floors and the labor market is least accurate?
A)
In the long run, effective price floors lead to inefficiencies in production.
B)
If a price floor is set below the equilibrium price, the quantity demanded will exceed the quantity supplied.
C)
Setting a minimum wage above the equilibrium wage rate will lead to an excess supply of labor.


If a price floor is set below the equilibrium price, it will have no effect on the quantity demanded or supplied. However, a price floor (minimum wage in the labor market) above the equilibrium price (wage rate in the labor market) will cause a surplus at the floor price. Inefficiencies result from a price floor because producers will divert resources to supply a larger quantity of the good, but consumers will demand a smaller quantity at the floor price.
作者: cyber21    时间: 2012-3-24 15:34

A minimum wage is an example of which of the following?
A)
A price floor.
B)
A price ceiling.
C)
Rent controls.


A minimum wage is an example of a price floor.
作者: cyber21    时间: 2012-3-24 15:34

A minimum wage set above the equilibrium minimum wage will most likely have which of the following effects?
A)
There will be a shortage of workers.
B)
Unemployment will rise.
C)
It will have no effects.


Firms will not employ all the workers who want to work at the imposed higher wage. Those who want to work at the higher wage but cannot find jobs will be counted as unemployed.
作者: cyber21    时间: 2012-3-24 15:34

Which of the following is least likely to be the result of a minimum wage?
A)
Labor will be substituted for capital.
B)
There will be an abundance of low-skilled workers willing to work.
C)
On-the-job training will be cut back.


Firms substitute capital for the “expensive” labor and use more than the economically efficient amount of capital.
作者: cyber21    时间: 2012-3-24 15:35

A price ceiling is only effective if it:
A)
is set above the equilibrium price.
B)
has been in effect in over a relatively short time.
C)
is set below the equilibrium price.


A price ceiling is only effective if it is lower than the equilibrium price without the ceiling. This leads to a shortage as consumers wish to purchase a quantity of the good at the ceiling price which is greater than the quantity supplied at that price.
作者: cyber21    时间: 2012-3-24 15:35

The government imposes a tax on a good. The relative amounts of the tax that each economic actor in the market plays is called the:
A)
tax incidence.
B)
statutory tax.
C)
deadweight loss.


This is the definition of the incidence of a tax. It is determined by the shape of the supply and demand curves, not upon whom the tax is imposed legally (the statutory incidence of the tax).
作者: cyber21    时间: 2012-3-24 15:35

The long-term effects of a price ceiling on a market are least likely to include:
A)
discrimination by sellers.
B)
an increase in waiting times to purchase.
C)
an improvement in quality to offset the reduction in quantity.


A price ceiling is a price above which producers cannot sell, and is generally set below the market equilibrium. Producers often respond by reducing the quality of goods commensurate with their lower imposed price.
作者: cyber21    时间: 2012-3-24 15:36

Consumer surplus is most accurately defined as the difference between the:
A)
value consumers are willing to pay for an additional unit of good or service and the cost of producing the additional unit of the good or service.
B)
total value consumers place on the quantity of a good purchased, and the total amount they must pay for that quantity.
C)
price that a consumer must pay for an additional unit of a good or service and the cost of producing the additional unit of the good or service.


For an individual, consumer surplus is defined as the sum of the differences between what that individual is willing to pay for each individual unit of a good or service that he or she purchases and the amount that he or she actually pays for each of these individual units.
作者: cyber21    时间: 2012-3-24 15:36

Producer surplus is most accurately defined as the:
A)
difference between the opportunity cost of producing the last unit of a good or service and the price received for that unit.
B)
sum of the differences between the price received for each unit of good produced and the opportunity cost of each unit.
C)
sum of the differences between the marginal benefit and the marginal cost for each unit of good produced and consumed over the total number of units produced and consumed.


Producer surplus is the sum of the differences between the price received for each unit of good produced and the opportunity cost of each unit, for the total units produced. Producer surplus results when the market price for a good or service exceeds the marginal cost producing it.
作者: cyber21    时间: 2012-3-24 15:36

Equilibrium in a perfectly competitive market results in a quantity for which the:
A)
producer surplus equals zero.
B)
consumer and producer surpluses are equal.
C)
sum of consumer and producer surpluses is maximized.


In a competitive market, the equilibrium quantity is the one for which the sum of the consumer and producer surpluses is maximized.
作者: cyber21    时间: 2012-3-24 15:37

If a consumer is willing to pay $20 for a shirt but only has to pay $16, the $4 difference is:
A)
consumer surplus.
B)
consumer deficit.
C)
producer surplus.


If a consumer is willing to pay $20 for a shirt but only pays $16 for the shirt, the $4 difference is consumer surplus. The consumer surplus plus the market price equals the total value of the product to the consumer.
作者: cyber21    时间: 2012-3-24 15:37

In an unregulated competitive market, which of the following conditions most accurately describes the condition that exists when the efficient quantity of a good or service is produced and consumed?
A)
Consumer surplus equals producer surplus.
B)
The sum of consumer surplus and producer surplus is maximized.
C)
Producer surplus is maximized.


When the efficient quantity is produced, the sum of the consumer surplus and producer surplus is maximized.
作者: cyber21    时间: 2012-3-24 15:38

Producer surplus is best defined as the:
A)
sum of the differences between the price of each unit of a good and its opportunity cost.
B)
amount by which the price of the next unit of a good exceeds the consumer's marginal benefit from the good.
C)
number of units by which the supply is greater than the quantity demanded by consumers.


The sum of the differences between price and opportunity cost is producer surplus.
作者: cyber21    时间: 2012-3-24 15:38

Which of the following statements most accurately describes what will occur in an unrestricted economy when tastes change so that marginal benefit exceeds marginal cost at the current quantity produced and sold of a good or service?
A)
The quantity of other goods and services produced will increase.
B)
The quantity consumed will decrease.
C)
The quantity of the good or service produced will increase.


In an unrestricted economy, the efficient quantity is the one for which the marginal benefit equals the marginal cost. When marginal benefit is greater than marginal cost at a given quantity, producers will produce more since consumers are willing to pay more than the cost of production.
作者: cyber21    时间: 2012-3-24 15:39

Producer surplus is best described as the:
A)
excess of price over the opportunity cost of production.
B)
amount by which price exceeds the cash cost of production.
C)
excess quantity supplied relative to quantity demanded.


Producer surplus is defined as the excess of price over the opportunity cost, not the cash cost, of production. Excess quantity supplied relative to quantity demanded represents a surplus of the good in the market, but is not referred to as producer surplus.
作者: cyber21    时间: 2012-3-24 15:39

If a 10% income increase caused a group of consumers to increase their purchases of television sets from 95 to 105, the group's income elasticity of demand for television sets would be closest to:
A)
0.10.
B)
1.00.
C)
2.00.


Income elasticity is the sensitivity of demand to changes in consumer income.
Income elasticity = (percent change in quantity demanded) / (percent change in income) = [(105 − 95) / (100)] / 0.10 = 1
作者: cyber21    时间: 2012-3-24 15:39

If the admission price for a rock concert is raised from $25 to $30 causing sales to drop from 60,000 to 40,000, the price elasticity of demand for tickets to the concert is:
A)
2.20.
B)
-1.67.
C)
-2.20.


Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price, using the average value of the variable in the computations. The percent change in quantity demanded is (40,000 − 60,000) / ((60,000 + 40,000) / 2) = -0.4. The percent change in price is (30 − 25) / ((30 + 25) / 2) = 0.1818. The price elasticity of demand is -0.40 / 0.1818 = -2.2.
作者: cyber21    时间: 2012-3-24 15:39

Antonio Conti consumes 2 pounds of beef per week when beef is $4.50 per pound and 3 pounds of chicken when chicken sells for $3.50 per pound. If the price of chicken increases to $4.00 per pound, Conti’s consumption of beef increases to 2.5 pounds per week. Which of the following most accurately describes Conti’s cross elasticity of demand for beef versus chicken? The cross price elasticity of demand for:
A)
beef relative to chicken is +1.67 and beef and chicken are complimentary goods.
B)
beef relative to chicken is +1.67 and beef and chicken are substitutes.
C)
chicken relative to beef is +1.75 and beef and chicken are substitutes.


The average quantity of beef demanded is (2.0 + 2.5) / 2 = 2.25 pounds, so the percentage change in the quantity of beef demanded is (2.5 – 2.0) / 2.25 = +22.22%. The average price of chicken is ($3.50 + $4.00) / 2 = $3.75 per pound, so the percentage change in the price of chicken ($4.00 – $3.50) / $3.75 = +13.33%. The cross price elasticity of demand for beef relative to the price of chicken is 22.2 / 13.3 = 1.67. Since the cross price elasticity is positive, chicken and beef are substitutes for Conti.
作者: Mechanic    时间: 2012-3-24 15:42

Assume that for the average consumer, the quantity demanded for jeans increases from 5 to 7 pairs per year in response to a price decrease from $29 to $24 per pair. The respective price elasticity and relative elasticity of demand for jeans is best described by which of the following?
A)
−1.77; relatively inelastic.
B)
−2.32; relatively elastic.
C)
−1.77; relatively elastic.

The percentage change in quantity demanded is (7 − 5) / [(7 + 5) / 2] = 33.33% and the percentage change in price is (24 − 29) / [(24 + 29) / 2] = -18.87%. Thus, price elasticity = 33.33% / -18.87% = -1.77.
A good is considered to be elastic if the absolute value of price elasticity is greater than 1. In this case, the absolute value of the price elasticity of demand for jeans is 1.77, so the price elasticity for jeans is relatively elastic.
作者: Mechanic    时间: 2012-3-24 15:42

When household incomes go down and the quantity of a product demanded goes up, the product is:
A)
an inferior good.
B)
a necessity.
C)
a normal good.


When household incomes go down and the quantity demanded of a product goes up, the product is an inferior good. Inferior goods include things like bus travel and margarine.
作者: Mechanic    时间: 2012-3-24 15:43

If the price elasticity of demand is -1.5 and the price of the product increases 2%, the quantity demanded will:
A)
decrease approximately 1.5%.
B)
decrease approximately 3%.
C)
decrease approximately 0.75%.


If the price elasticity of demand is -1.5, and you increase the price of the product 2%, the quantity demanded will decrease approximately 3%. When the price elasticity is negative, it means that price and demand move in opposite directions. Given a price decrease, demand will increase and vice versa. The absolute value, 1.5, indicates that demand will move one-and-a-half times as much as price.
作者: Mechanic    时间: 2012-3-24 15:43

If the price of a candy bar increases from $0.50 to $0.55 and the quantity demanded decreases from 267 to 235, the price elasticity of demand is:
A)
1.34.
B)
-1.23.
C)
-1.34.


Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price, using the average value of the variable in the computations. The percent change in quantity demanded is (235 − 267) / [(235 + 267) / 2] = -32 / 251 = -0.127 or -12.7%. The percent change in price is = (0.55 − 0.50) / [(0.55 + 0.50) / 2] = 0.05 / 0.525 = 0.095 or 9.5%. The price elasticity of demand is -12.7 / 9.5 = -1.34.
作者: Mechanic    时间: 2012-3-24 15:43

If the price of World Cup Soccer tickets increases from $40 a ticket to $50 a ticket and the quantity demanded of tickets stays the same,  demand for the tickets is:
A)
elastic, but not perfectly elastic.
B)
perfectly inelastic.
C)
inelastic, but not perfectly inelastic.


Since the quantiy of tickets demanded stayed the same after the price changed, the demand curve would have to be vertical which is a perfectly inelastic demand curve.
作者: Mechanic    时间: 2012-3-24 15:44

The demand for a product tends to be price inelastic if:
A)
few good complements for the product are available.
B)
people spend a large share of their income on the product.
C)
few good substitutes for the product are available.


If a large price change results in a small change in quantity demanded, demand is inelastic. Cigarettes are an example of a good with inelastic demand.
作者: Mechanic    时间: 2012-3-24 15:44

Gene Bawerk, an economics professor, is lecturing on the factors that influence the price elasticity of demand. He makes the following assertions:

Statement 1: For most goods, demand is more elastic in the long run than the short run.
Statement 2: Demand for a good becomes more elastic when a close substitute for it becomes available on the market.

With respect to Bawerk’s statements:
A)
only statement 1 is correct.
B)
only statement 2 is correct.
C)
both are correct.


Both of these statements are accurate. Price elasticity for most goods is greater in the long run because individuals can make long-term decisions that require different quantities of the good, such as buying more fuel efficient vehicles to use less gasoline. Price elasticity is greater the better the available substitutes because an increase in price will lead more buyers to switch to the substitute products.
作者: Mechanic    时间: 2012-3-24 15:44

Assume that for the average consumer, the quantity demanded for gasoline increases from 15 gallons per week to 20 gallons per week response to a price decrease from $2.90 per gallon to $2.46 per gallon. Which of the following is closest to the price elasticity of demand for gasoline?
A)
-1.65.
B)
-1.86
C)
-1.74.


The percentage change in quantity demanded is (20 – 15) / [(20 + 15) / 2] = 28.57% and the percentage change in price is (2.46 - 2.90) / [(2.90 + 2.46) / 2] = -16.42%. Thus, price elasticity = 28.57% / -16.42% = -1.74.
作者: Mechanic    时间: 2012-3-24 15:45

The percent change in demand for a good divided by the percent change in the price of another good is known as the:
A)
cross price elasticity of demand.
B)
income elasticity of demand.
C)
price elasticity of demand.


作者: Mechanic    时间: 2012-3-24 15:45

Price elasticity of demand is most accurately defined as the change in:
A)
quantity demanded in response to a change in market price.
B)
market price in response to a change in the quantity demanded.
C)
quantity demanded in response to a change in income.


作者: Mechanic    时间: 2012-3-24 15:45

George’s Appliance Center sells big screen televisions. On a representative model, when the price was reduced from $2,450 to $2,275, monthly demand increased from 175 to 211 units. What is the price elasticity of demand?
A)
-1.69.
B)
-2.14.
C)
-2.53.


Price elasticity of demand = % change in quantity demanded / % change in price
% change in quantity = (211 − 175) / [(211 + 175)/2] = 0.187
% change in price = (2,275 − 2,450) / [(2,275 + 2,450)/2] = -0.074
Price elasticity of demand = 0.187 / -0.074 = -2.53
作者: Mechanic    时间: 2012-3-24 15:46

Income elasticity is defined as the:
A)
change in quantity demanded divided by the change in income.
B)
percentage change in the quantity demanded divided by the percentage change in income.
C)
percentage change in income divided by the percentage change in the quantity demanded.


Income elasticity is defined as the percentage change in quantity demanded divided by the percentage change in income. Normal goods have positive values for income elasticity and inferior goods have negative income elasticities.
作者: Mechanic    时间: 2012-3-24 15:46

If the price elasticity of demand for a good is 4.0, then a 10% increase in price would result in a:
A)
4% decrease in the quantity demanded.
B)
10% decrease in the quantity demanded.
C)
40% decrease in the quantity demanded.


Price elasticity of demand = (% change in Q demanded / % change in price). Given the price elasticity of demand and the percentage change in price, we can solve for the percentage change in Q demanded.
作者: Mechanic    时间: 2012-3-24 15:46

The price of product Z decreased from $2.50 per unit to $2.00 per unit.  Since the price decreased, demand has gone up from 3 million units to 4 million units.  Calculate the respective price elasticity of demand and determine the elasticity of demand.
A)
−1.29; inelastic.
B)
−1.29; elastic.
C)
−2.00; elastic.


percentage change in quantity = [(4 − 3)] / [(4 + 3) / 2] = 1 / 3.5 = 0.286 = 28.6%
percentage change in price = [(2 − 2.5)] / [(2 + 2.5) / 2] = -0.5 / 2.25 = -0.222 = -22.2%
28.6 % / -22.2% = -1.29
Since the price elasticity of demand is greater than 1 (ignore the sign), product Z is elastic
作者: Mechanic    时间: 2012-3-24 15:47

If the number of widgets demanded changes from 51 to 49 when the price changes from $4 to $6, the price elasticity of demand is:
A)
-0.10.
B)
Elastic.
C)
-2.00.


Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price, using the average value of the variable in the computations. The percent change in quantity demanded is (51 – 49) / ((51 + 49) / 2) = 0.04. The percent change in price is (4 – 6) / (4 + 6) / 2 = -0.40. The price elasticity of demand is 0.04 / -0.4 = -0.10.
作者: Mechanic    时间: 2012-3-24 15:47

Suppose that a given MP3 player now costs $300, and sales are now 5,000 units per month. The manufacturer has determined that if the price is reduced by $25, the demand will increase by 250 units per month. Calculate and describe the elasticity of demand.
A)
-0.56, inelastic.
B)
-10.0, elastic.
C)
-0.56, elastic.


Elasticity is the percentage change in quantity, divided by the percentage change in price. The percentage change in quantity is 250 / ((5,000 + 5,250)/2) = 0.049 or 4.9%. The percentage change in price is -25 / ((300 + 275)/2) = -0.087 or -8.7%. 4.9 / -8.7 = -0.56. Elasticity with an absolute value of less than 1 is considered inelastic.
作者: Mechanic    时间: 2012-3-24 15:47

If the demand curve for a given product is a straight line, this indicates that:
A)
demand is more elastic at higher prices.
B)
demand is unit elastic.
C)
elasticity is constant along the demand curve.


Elasticities will be greater (in absolute value) at higher prices.
作者: Mechanic    时间: 2012-3-24 15:48

If a good has elastic demand, a small price decrease will cause:
A)
a larger increase in quantity demanded.
B)
no change in the quantity demanded.
C)
a larger decrease in the quantity demanded.


If a good has elastic demand, a small price decrease will cause a larger increase in the quantity demanded.
作者: Mechanic    时间: 2012-3-24 15:48

If quantity demanded increases 15% when the price drops 1%, demand for this good:
A)
perfectly elastic.
B)
inelastic, but not perfectly inelastic.
C)
elastic, but not perfectly elastic.


Whenever quantity demanded for a good changes by a greater percentage than price, the price elasticity of demand will be greater than 1.0 and demand for the product is considered to be elastic.
作者: Mechanic    时间: 2012-3-24 15:48

For a linear demand curve, at the price where elasticity is -2.0, reducing prices will:
A)
increase total revenue and we are at the point of maximum total revenue.
B)
increase total revenue and we are not at the point of maximum total revenue.
C)
decrease total revenue and we are not at the point of maximum total revenue.


If the price elasticity of demand is -2.0, this indicates that the percentage change in quantity demanded is twice the percentage change in price. Thus, a decrease in price will be more than offset by the increase in quantity, and total revenue will increase. We are not at the point of maximum total revenue which is where elasticity is -1.0—the point of unit elastic demand.
作者: Mechanic    时间: 2012-3-24 15:49

Assume that Rajesh Singh’s income increased from $20,000 per year to $30,000 per year, and his demand for “store-brand” bread decreased from 80 loaves to 40 loaves per year. Which of the following most accurately describes Singh’s income elasticity for store-brand bread?
A)
Income elasticity is -0.60 and store-brand bread is an inferior good.
B)
Income elasticity is -1.67 and store-brand bread is an inferior good.
C)
Income elasticity is +1.00 and store-brand bread is a complimentary good.


Average income is ($20,000 + $30,000) / 2 = $25,000, so the percentage change in income is ($30,000 – $20,000) / $25,000 = 40.00%. The average quantity of bread demanded is (80 + 40) / 2 = 60 loaves, so the percentage change in the quantity of bread demanded is (40 – 80) / 60 = -66.67%. Income elasticity of store-brand bread is -66.67 / 40 = -1.67. Since Singh’s income elasticity of demand is negative, store-brand bread is an inferior good.
作者: Mechanic    时间: 2012-3-24 15:49

Suppose the price of computers increases from $1,000 to $1,200. Assuming the original quantity demanded for computers was 50 million units, and the new quantity demanded is 45 million computers, what is the price elasticity of demand, and is the demand for computers elastic or inelastic?
A)
0.58, inelastic.
B)
-0.58, inelastic.
C)
-1.73, elastic.


Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price, using the average value of the variable in the computations. The percent change in quantity demanded is (45 − 50) / [(50 + 45) / 2] = −5 / 47.5 = -0.105 or -10.5%. The percent change in price is = (1,200 − 1,000) / [(1,000 + 1,200) / 2] = 200 / 1,100 = 0.1818 or 18.2% . The price elasticity of demand is -10.5 / 18.2 = -0.58.
作者: Mechanic    时间: 2012-3-24 15:49

If the price elasticity of demand is 1.5 and a change in the price of the product increases the quantity demanded by 4%, then what is the percent change in price?
A)
−2.667%.
B)
+2.667%.
C)
–0.375%.


Price elasticity of demand is calculated by dividing the percent change in quantity demanded by the percent change in price. The percent change in price is, therefore, the percent change in quantity demanded divided by the price elasticity of demand = 4 / 1.5 = 2.667.
Because of the inverse relationship between quantity demanded and price, the price elasticity is always going to be negative although economists usually ignore the negative sign and just use the absolute value. To properly predict the price change a negative sign needs to be added to the price elasticity before the calculation or to the answer after the calculation.
Using the latter case, the 2.667% will become -2.667%, showing that an increase in quantity demanded of 4% will cause a decrease in the price of 2.667% when the price elasticity is 1.5 (-1.5).
作者: Mechanic    时间: 2012-3-24 15:50

When demand for a good is inelastic, a higher price will:
A)
fail to reduce the quantity demanded for the good.
B)
have no impact on the demand for the good.
C)
lead to an increase in total expenditures for the good.


When demand is relatively inelastic, consumers do not reduce their quantity demanded very much when the price increases. That is, a given percentage increase in price results in a smaller percentage reduction in quantity demanded. Thus, total expenditures on the good increase. "Fail to reduce the quantity demanded for the good" is inaccurate because that would only be true if demand was perfectly inelastic.
作者: Mechanic    时间: 2012-3-24 15:50

If the number of ice cream bars demanded increases from 19 to 21 when the price decreases from $1.50 to $0.50, the price elasticity of demand is:
A)
−0.1.
B)
−0.2.
C)
−5.


If the number of ice cream bars demanded changes from 19 to 21 when the price changes from $1.50 to $0.50, the percentage change in quantity is (21 − 19) / [(21 + 19) / 2] = 10%, and the percentage change in price is (0.50 − 1.50) / [(1.50 + 0.50) / 2] = −100%. Thus, price elasticity = 10% / −100% = −0.1.
作者: Mechanic    时间: 2012-3-24 15:51

If quantity demanded increases 20% when the price drops 2%, this good exhibits:
A)
inelastic, but not perfectly inelastic, demand.
B)
perfectly inelastic demand.
C)
elastic, but not perfectly elastic, demand.


If quantity demanded increases 20% when the price drops 2%, this good exhibits elastic demand. Whenever demand changes by a greater percentage than price, demand is considered to be elastic.
作者: Mechanic    时间: 2012-3-24 15:51

The primary factors that influence the price elasticity of demand for a product are:
A)
changes in consumers' incomes, the time since the price change occurred, and the availability of substitute goods.
B)
the availability of substitute goods, the time that has elapsed since the price of the good changed, and the proportions of consumers' budgets spent on the product.
C)
the proportions of consumers' budgets spent on the product, the size of the shift in the demand curve for a product, and changes in consumers' price expectations.


The three primary factors influencing the price elasticity of demand for a good are the availability of substitute goods, the proportions of consumers' budgets spent on the good, and the time since the price change. If there are good substitutes, when the price of the good goes up, some customers will switch to substitute goods. For goods that represent a relatively small proportion of consumers' budgets, a change in price will have little effect on the quantity demanded. For most goods, the price elasticity of demand is greater in the long run than in the short run.
作者: Mechanic    时间: 2012-3-24 15:52

If a good has elastic demand, a small percentage price increase will cause:
A)
a larger percentage decrease in the quantity demanded.
B)
a larger percentage increase in the quantity demanded.
C)
a smaller percentage increase in the quantity demanded.


If a good has elastic demand, a small price increase will cause a larger decrease in the quantity demanded. Demand is elastic when the percentage change in quantity demanded is larger than the percentage change in price.
作者: Mechanic    时间: 2012-3-24 15:53

The cross price elasticity of demand for a substitute good and the income elasticity for an inferior good are:
Cross elasticityIncome elasticity
A)
< 0> 0
B)
< 0< 0
C)
> 0< 0


The cross price elasticity of substitutes is positive, and the income elasticity of an inferior good is negative.
作者: Mechanic    时间: 2012-3-24 15:53

Income elasticity is defined as the percentage change in:
A)
quantity demanded divided by the percentage change in income.
B)
income divided by the percentage change in the quantity demanded.
C)
quantity demanded divided by the percentage change in the price of the product.


Income elasticity is defined as the percentage change in quantity demanded divided by the percentage change in income. Normal goods have positive values for income elasticity, and inferior goods have negative income elasticity.
作者: Mechanic    时间: 2012-3-24 15:54

If the price elasticity of demand is −2 and the price of the product decreases by 5%, the quantity demanded will:
A)
increase 5%.
B)
decrease 2%.
C)
increase 10%.


If the price elasticity of demand is −2, and the price of the product decreases by 5%, the quantity demanded will increase 10%. The value, −2, indicates that the percentage increase in the quantity demanded will be twice the percentage decrease in price.
作者: Mechanic    时间: 2012-3-24 15:54

If the price elasticity of a linear demand curve is −1 at the current price, an increase in price will lead to:
A)
no change in total revenue.
B)
an increase in total revenue.
C)
a decrease in total revenue.


On a linear demand curve, demand is elastic at prices above the point of unitary elasticity, so a price increase will decrease total revenue.
作者: Mechanic    时间: 2012-3-24 15:55

A good is most likely to demonstrate higher price elasticity of demand:
A)
when there are few substitutes for the good, than when there are many good substitutes.
B)
if it represents a small portion of the consumer’s budget, than if it represents a large portion.
C)
in the long run than the short run.


A good is likely to show a high price elasticity of demand when there are good substitutes, it represents a large proportion of consumer spending, and in the long run as consumers make changes that take time to implement in response to price changes for the good.
作者: geniealice    时间: 2013-3-3 00:42

Thanks for sharing. ~
作者: mimiaifeng    时间: 2013-10-13 19:12

回复 14# cyber21


    为什么无效损失对产量过低或过剩，消费者，生产者剩余都下降呢？
作者: mimiaifeng    时间: 2013-10-13 21:47

回复 40# cyber21


    题目貌似有误吧。应该是竞争市场，非完全竞争市场吧。。
作者: mimiaifeng    时间: 2013-10-13 23:29

一个晚上做完13单元题目。还不错。只是答案以红字出现，不利于自行独立判断。望把答案隐秘下。最后感谢你的分享哈。
作者: mirabelle9042    时间: 2014-6-27 11:38

请问这个sample是从历年经济学部分sample里总结的题目吗？？这个题目是不是复习完每个单元后做比较好？
作者: mirabelle9042    时间: 2014-6-27 11:44

为何政府补贴会引起供给曲线右移但限额确不会引起供给曲线左移呢？
作者: 我爱明珠    时间: 2016-5-31 02:58

感谢分享哈～ 知识点又巩固了



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