Download 姓名: 學號: Homework #3(A) Economics (I), 2013 Due Date: 2013.12

姓名:
學號:
Homework #3(A)
Economics (I), 2013
Due Date: 2013.12.11
Part I. Multiple Choices (50 points: 5 points of each )
Please fill your answers in below blanks.
1
2
3
4
5
6
7
8
9
10
B
A
B
B
D
A
D
A
C
D
1. Refer to Table 1.
The table above lists the highest prices three consumers, Tom,
Dick and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of
the shirts falls from $28 to $20
A) consumer surplus will increase from $70 to $95.
B) consumer surplus increases from $14 to $35.
C) Tom will buy two shirts; Dick and Harriet will each buy one shirt.
D) Harriet will receive more consumer surplus than Tom or Dick.
Consumer
Willingness to Pay
Tom
$40
Dick
30
Harriet
25
Table 1
Answer: B
2. Economic efficiency is defined as a market outcome in which the marginal benefit
to consumers of the last unit produced is equal to the marginal cost of
production, and in which
A) the sum of consumer surplus and producer surplus is at a maximum.
B) the sum of the benefits to firms is equal to the sum of the benefits to
consumers.
C) the sum of consumer surplus and producer surplus is minimized.
D) economic surplus is minimized.
Answer: A
3. Refer to Figure 1. What is the value of consumer surplus after the imposition of
the ceiling?
A) $120,000.
B) $230,000.
C) $270,000.
D) $430,000.
Answer: B
Figure 1
Figure 1 shows the market for apartments in Springfield.
Recently, the government imposed
a rent ceiling of $1,000 per month.
4. Refer to Figure 1. What is the value of the portion of producer surplus
transferred to consumers as a result of the rent ceiling?
A) $40,000.
B) $100,000.
C) $125,000.
D) $140,000.
Answer: B
5. The government proposes a tax on imported champagne.
entire burden of the tax if the
Buyers will bear the
A) demand curve is downward sloping and the supply curve is upward sloping.
B) demand curve for imported champagne is horizontal.
C) supply curve for imported champagne is vertical.
D) demand curve for imported champagne is vertical.
Answer: D
6. The following equations represent the demand and supply for silver pendants .
QD = 50 – 2P
QS = -10 + 2P
What is the equilibrium price (P) and quantity (Q - in thousands) of pendants?
A) P = $15; Q = 20 thousand.
B) P = $50; Q = 10 thousand.
C) P = $10; Q = 30 thousand.
D) P = $20; Q = 15 thousand.
Answer: A
7. If a consumer receives 20 units of utility from consuming two candy bars, and 25
units of utility from consuming three candy bars, the marginal utility of the
second candy bar is
A) 25 utility units.
B) 20 utility units.
C) 5 utility units.
D) unknown as more information is needed to determine the answer.
Answer: D
8. Consider a downward-sloping demand curve. When the price of an inferior good
increases, the income and substitution effects
A) work in opposite directions and quantity demanded decreases.
B) work in the same direction to decrease quantity demanded.
C) work in the same direction to increase quantity demanded.
D) work in opposite directions and quantity demanded increases.
Answer: A
Figure 2
9. Refer to Figure 2. Which of the following statements is true?
A) Quantities Q0 and Q1 are derived independently of the utility-maximizing
model.
B) Quantities Q0 and Q1 may not necessarily be the utility-maximizing quantities
of hoagies at two different prices because we have no information on the
consumer's budget or the price of other goods.
C) Quantities Q0 and Q1 are the utility-maximizing quantities of hoagies at two
different prices of hoagies.
D) Quantity Q0 could be a utility-maximizing choice if the price is $5.75, but
quantity Q1 may not be because we have no information on the marginal
utility per dollar when price changes.
Answer: C
10. In order to derive an individual's demand curve for salmon, we would observe
what happens to the utility-maximizing bundle when we change
A) income and hold everything else constant.
B) tastes and preferences and hold everything else constant.
C) the price of a close substitute and hold everything else constant.
D) the price of the product and hold everything else constant.
Answer: D