Download 經濟學原理一

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學號：
Microeconomics I
Midterm
11/8, 2007
I.
Multiple Choices (40%)
1. If the price of automobiles were to decrease substantially, the demand curve for
public transportation would most likely
A) shift rightward
B) shift leftward.
C) remain unchanged.
D) remain unchanged while quantity demanded would change.
2. The above figure shows three different supply-and-demand graphs. Which graph
best represents the market for the air we are currently breathing?
A) Graph A.
B) Graph B.
C) Graph C.
D) None of the above.
3. When import restrictions are placed on a good, and as a result the price of the
good increases, the demand curve for that good will
A) shift rightward.
B) shift leftward.
C) become steeper.
D) be unaffected.
4. In the labor market, if the government imposes a minimum wage that is below the
equilibrium wage, then
A) workers who wish to work at the minimum wage will have a difficult time
finding jobs.
B) firms will hire fewer workers than without the minimum wage law.
C) some workers may lose their jobs as a result.
D) nothing will happen to the wage rate or employment.
5. The change in price that results from a leftward shift of the supply curve will be
greater if
A) the demand curve is relatively steep than if the demand curve is relatively flat.
B) the demand curve is relatively flat than if the demand curve is relatively steep.
C) the demand curve is horizontal than if the demand curve is vertical.
D) the demand curve is horizontal than if the demand curve is downward sloping.
6. If an increase in income results in a rightward parallel shift of the demand curve,
then at any given price, the price elasticity of demand will have
A) increased in absolute terms.
B) decreased in absolute terms.
C) remained unchanged.
D) increased, decreased or stayed the same. It cannot be determined.
7. Convexity of indifference curves implies that consumers are willing to
A) give up more "y" to get an extra "x" the more "x" they have.
B) give up more "y" to get an extra "x" the less "x" they have.
C) settle for less of both "x" and "y".
D) acquire more "x" only if they do not have to give up any "y".
8. The marginal rate of transformation of y for x represents
A)
B)
C)
D)
the slope of the budget constraint.
the rate at which the consumer must give up x to get one more y.
-Py/ Px.
All of the above.
9. If the prices of both goods and income increase by the same percentage, what will
happen to the budget line?
A) The budget line rotates inward from the intercept on the axis of the good that
did not change in price.
B) The budget line rotates outward from the intercept on the axis of the good that
did not change in price.
C) The budget line shifts outward without a change in slope.
D) Nothing.
10.
The above figure shows Larry's indifference map and budget lines for ham and
pork. Which of the following statements is TRUE?
A) Pork is an inferior good.
B) Ham is an inferior good.
C) Neither pork nor ham is an inferior good.
D) Both ham and pork are inferior goods.
11. The substitution effect can be measured holding ________ constant.
A) income
B) utility
C) the price of one good
D) the price of all goods
12. One characteristic of a Giffen good is that it
A) is a luxury good.
B) is an inferior good.
C) has an upward-sloping Engel curve.
D) All of the above.
13. A true cost-of-living adjustment in response to a change in prices would
compensate consumers so that they would be able to
A) purchase the same bundle they purchased before prices changed.
B) achieve the same level of utility they did before prices changed.
C) face the same choices they did before prices changed.
D) achieve an increase in utility that is equal to the rate of inflation.
14. If the demand curve for a good always has unitary price elasticity, what does this
imply about consumer behavior?
A) Consumers do not react to a price change.
B) Consumers will spend a constant total amount on the good.
C) Consumers are irrational.
D) Consumers do not obey the Law of Demand.
15. The purpose of making assumptions in economic model building is to
A) force the model to yield the correct answer.
B) minimize the amount of work an economist must do.
C) simplify the model while keeping important details.
D) express the relationship mathematically.
16. Consider the demand functions: A) Qd = 250 - 2P B) Qd = 300 - 3P.
Which of the demand functions reflects a higher level of consumer incomes?
A) A.
B) B.
C) A and B reflect the same consumer incomes.
D) More information is needed.
17. How will a decrease in price affect a firm's revenues?
A) It depends on the price elasticity of demand.
B) Revenues will stay the same.
C) Revenues will decrease.
D) Revenues will increase.
18. The market demand for wheat is Q = 100 - 2p + 1pb, where pb is the price of
barley. The cross price elasticity of demand for wheat with respect to barley
A)
B)
C)
D)
cannot be calculated from just the information provided.
is negative.
suggests that wheat and barley are complements.
equals 1.
19. Which of the following are true statements concerning the price elasticity of
demand?
A) The price elasticity is constant for any demand curve.
B) Demand is more price elastic in the short run than in the long run..
C) If total revenue falls as price increases, then the demand is relatively inelastic.
D) None of the above.
20. In general, consumers bear more of a tax when the demand is
A) relatively inelastic.
B) unitary elastic.
C) relatively elastic.
D) such that consumers always bear the entire burden.
1
2
3
4
5
6
7
8
9
10
B
B
D
D
A
B
B
A
D
B
11
12
13
14
15
16
17
18
19
20
B
B
B
B
C
D
A
A
B
A
II. True or False (30%)
For the following, please answer "True" or "False" and explain why.
1. In the case of a linear demand curve, demand becomes more price elastic as
price increases. (就直線型需求曲線而言，其需求彈性會隨價格上升而增加。)
True.
For a demand curve of the form Q = a - bp, elasticity can be written as -b[p/(a - bp)].
As p increases, the term in square brackets increases, making the elasticity increase.
2. Only in the case of perfectly inelastic demand will consumers pay the full amount
of a specific tax or ad valorem tax. (只有在需求為完全無彈性的情況下，消費者
會負擔所有的稅。)
False.
While it is true that consumers pay the full tax in the case of perfectly inelastic
demand, it is not the only case. Regardless of demand elasticity (except in the rare
case where demand is also perfectly elastic), consumers will pay the full amount of
the tax if supply is perfectly elastic.
3. The slope of the budget line represents the rate at which the consumer is willing to
trade one good for another at any given bundle. (預算線的斜率代表消費者在任
一消費組合下願意以一物換取另一物的比例。)
False.
This describes the slope of the indifference curve. The slope of the budget line
represents the rate at which the consumer must trade one good for another at any
given bundle.
4. Using the CPI to compensate workers for inflation is appropriate because, in the
face of a change in relative prices, people should be allowed to purchase the same
bundle as they did before the price changes. (根據消費者物價指數來調薪以彌
補通貨膨脹的影響是合理的，因為在新的物價水準下，消費者應該要有能力
可以購買其原來的消費組合。)
False.
This assumes that people would still prefer the original bundle. Because they are
facing a new set of relative prices, compensating people so that they could purchase
the original bundle will allow them to be able to achieve a higher level of utility than
they did before the price changes.
5. If a model fits reality but doesn't generate testable predictions, it is of little value
to economists. (如果一個模型完全符合實際現象，但卻不能推論岀可檢驗的預
測，則此模型對經濟學者而言，並無意義。)
True.
If the model doesn't deliver testable predictions it cannot be tested against competing
models.
6. As the supply curve shifts to the right, the increase in quantity demanded will not
depend on the shape of the demand curve. (當供給曲線右移，需求量上升幅度不
受需求曲線形狀之影響。)
False.
The flatter the demand curve, the larger the quantity reaction.
III. Problems (30%)
1. A new chemical cleaning solution is introduced to the market. Initially, demand is
QD  1,000 – 2 p and supply is QS  100  p. Determine the equilibrium price and
quantity. The government then decides that no more than 300 units of this
product should be sold per period, and imposes a quota at that level. How does
this quota affect the equilibrium price and quantity? Show the solution using a
graph and calculate the numerical answer.
2. Steve’s utility function is U = BC, where B = veggie burgers per week and C =
packs of cigarettes per week. Here, MUB = C and MUC = B. What is his marginal
rate of substitution if veggie burgers are on the vertical axis and cigarettes are on
the horizontal axis? Steve’s income is $120, the price of a veggie burger is $2, and
that of a pack of cigarettes is $1. How many burgers and how many packs of
cigarettes does Steve consume to maximize his utility? When a new tax raises the
price of a burger to $3, what is his new optimal bundle? Illustrate your answer in a
graph.
MRS=
MUB C
=
MUC B
預算線2B+C=120
令B*, C*為optimal bundle
則
C* PB 2
= =
B* PC 1
ie. 2B*=C*
代入預算線
2B*+C*=120
C*+C*=120
C*
=30
2
when a new tax raise PBt =3
ÞC*=60，B*=
then at new optimal bundle
t
(B，
Ct ) we have
Ct PBt 3
= =
Bt PCt 1
ÞCt =3Bt
代入預算線
3Bt +Ct =120
2Ct =120
Þ Ct =60，Bt =
Ct
=20
3
3. Suppose the market for grass seed can be expressed as
Demand: QD = 120 - 2p
Supply: QS = 4p
If government imposes a $6 specific tax to be collected from sellers, what is the
price consumers will pay? How much tax revenue is collected? What fraction is
paid by sellers? Show the solution using a graph and calculate the numerical
answer.
At equilibrium without the tax, p = 20 and Q = 60. In addition to receiving their price,
sellers must also receive $5 per unit. Rearranging the supply curve yields p = Q/3;
adding the tax yields p = (Q/3) + 5. Substituting this into the demand curve yields Q =
100 - 2[(Q/3) + 5] = 90 - (2/3)Q or (5/3)Q = 90. Solving yields Q = 54. Substituting
into either demand curve or supply curve plus tax yields p = 23. Tax revenue = 5 * 54
= 270. Since price rose $3 on a $5 tax, consumers pay 3/5 of the tax or 162, and
sellers pay 2/5 of the tax.