Download 2007 Economics Subject Test

Questions are printed on
both sides of the paper.
2008 Economics Subject Test
Part I. Multiple Choice (30 questions, 60 points total)
Choose the letter of ONE best answer (each question is worth 2 points).
1. For each of three potential buyers of oranges, the table displays the willingness to
pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the
only three buyers of oranges. If the market price is $1.0, the quantity demanded
will be
A) 1
B) 2.
C) 3.
D) 4.
First Orange
Second Orange
Third Orange
Alex
$1.50
$1.20
$0.90
Barb
$1.10
$0.95
$0.80
Carlos
$0.95
$0.90
$0.85
Answer: C
【需求、供給與市場均衡】
2. Which of the following results in an increase in the demand for a product?
A) A fall in the price of the product.
B) A smaller number of consumers wanting to buy the product.
C) An increase in the price of the product.
D) An increase in the price of a substitute product.
Answer: D 【需求、供給與市場均衡】
3. X= 100-10P
X= -20+20P
If the above functions represent the market for a specific product where X is the
quantity and P is the price of this product, then
A) at P=5, quantity demanded equals to 80.
B) at P=5, there’s an excess supply.
C) at P=5, the market is in equilibrium.
D) a price floor set at P=5 will not cause any impact to the market.
Answer: B 【需求、供給與市場均衡】
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4. As Mary’s income increases by 20 percent, her demand for tickets to National
Hockey League games increases by 10 percent. Mary’s demand for tickets is
income
; for Mary, hockey tickets are
good.
A) elastic; a normal
B) inelastic; a normal
C) elastic; an inferior
D) inelastic; an inferior
Answer: B 【供需彈性】
5. Suppose you observe that an increase in the price of salsa causes a decrease in the
demand for tortilla chips and an increase in the demand for potato chips. You can
conclude that
A) salsa and tortilla chips are substitutes.
B) salsa and potato chips are complements.
C) tortilla chips and potato chips are complements.
D) salsa and tortilla chips are complements.
Answer: D 【供需彈性】
6. The fact that the fourth plate from the “All You Can Eat Country Buffet”
generated more satisfaction than the fifth plate is an example of
A) increasing marginal utility.
B) diminishing marginal utility.
C) diminishing total utility.
D) the “paradox of value.”
Answer: B 【消費者選擇】
7.
In order to determine a household's budget line, you must know the
A) prices of the goods bought and the household's income.
B) prices of the goods bought, but not the household's income.
C) household's income, but not the prices of goods bought.
D) household's income, prices of the goods bought, and the household's
preferences.
Answer: A 【消費者選擇】
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8. Sam’s income for gasoline and coffee currently is $60 per week. If Sam’s budget
for gasoline and coffee increased from $60.00 to $70.00, Sam would experience
A) only an income effect.
B) only a substitution effect.
C) an increase in the marginal rate of substitution of both gasoline for coffee and
coffee for gasoline.
D) None of the above.
Answer: A 【消費者選擇】
9. Some of the cost curves for Ike’s Ice Cream Kitchen are given in the above figure.
At which of the following levels of output will AFC be the lowest?
A) At 0 gallons.
B) At 10 gallons.
C) At 40 gallons.
D) At 70 gallons.
Answer: D 【生產理論與成本分析】
10. If average total costs increase as the amount of output goes up,
A) the marginal costs are higher than the average total costs.
an increase in the firm’s scale of production leads to lower costs per unit
produced.
C) the total cost curve is getting flatter as the amount of output goes up.
D) all of above.
Answer: A
【生產理論與成本分析】
B)
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11. If both the marginal cost and the average variable cost curves are U-shaped, at the
point of minimum average variable cost, the marginal cost must be
A) greater than the average variable cost.
B) less than the average variable cost.
C) equal to the average variable cost.
D) at its minimum.
Answer: C 【生產理論與成本分析】
12. A competitive firm is more likely to shut down during a recession, when the
demand for its product declines, than during an economic expansion, because
during the recession it might be unable to cover its
A) fixed costs.
B) variable costs.
C) external costs.
D) depreciation due to machinery becoming obsolete.
Answer: B
【完全競爭市場】
13. In a perfectly competitive market that is in long-run equilibrium, a permanent
leftward shift in the market demand curve
A) raises the price in the short run.
B) raises profits in the short run.
C) leads to new firms entering the industry in the long run.
D) lowers the price at first but then raises it as firms leave the industry.
Answer: D
【完全競爭市場】
14. A single-price monopolist will find when it produces its profit-maximizing output
level that
A) price exceeds marginal revenue.
B) price exceeds marginal cost.
C) marginal revenue equals marginal cost.
D) All of the above occur at the profit-maximizing output level.
Answer: D 【獨占與寡占市場】
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15. A perfect price discriminator
A) charges the maximum price for each unit that consumers are willing to pay.
B) is able to get consumers to pay more for each unit than they are willing to
pay.
C) is unable to earn economic profit.
D) disregards the market demand curve.
Answer: A 【獨占與寡占市場】
16. The multiply effect will be more significant if
A) MPC is higher.
B) the income tax rate is higher.
C) investments are more sensitive to the change in interest rate.
D) all of above.
Answer: A 【總合供給與需求】
17. A Canadian farmer buys a new John Deere tractor that is made in an
American-owned factory in Mexico to use on his wheat farm in Canada. This
transaction will be considered as a part of
A) the American GDP.
B) the Mexican GDP.
C) the Canadian GDP.
D) both the American and Mexican GDP.
Answer: B 【國民所得的衡量】
18. Structural unemployment is caused by
A) shifts in the economy that make certain job skills obsolete.
B) temporary layoffs in industries such as construction.
C) the impact of the business cycle on job opportunities.
D) short-term changes in the economy.
Answer: A 【失業與通貨膨脹】
19. When the inflation rate rises, the purchasing power of nominal income
A) remains unchanged.
B) decreases.
C) increases.
D) changes by the inflation rate minus one.
Answer: B 【失業與通貨膨脹】
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20. The short-run aggregate supply curve is upward sloping because
A) a lower price level creates a wealth effect.
B) lower taxes motivate people to work more.
C) money wages do not immediately change when the price level changes.
D) most business firms operate with long-term contracts for output but not labor.
Answer: C 【總合供需模型】
21. Long-term economic growth is most closely associated with
A) getting unemployment as low as possible.
B) bringing about deflation.
C) increasing potential GDP.
D) reducing the number of job changes in the economy.
Answer: C 【經濟成長】
22. If the economy is at the natural rate of unemployment,
A) real GDP > potential GDP.
B) real GDP < potential GDP.
C) real GDP = potential GDP.
D) All of the above can occur when the economy is at the natural rate of
unemployment
Answer: C 【總合供需模型】
23. Stagflation is associated with
A) cost-push inflation.
B) demand-pull inflation.
C) both types of inflation.
D) neither cost-push inflation or demand-pull inflation because it is a different
concept altogether.
Answer: A 【失業與通貨膨脹】
24. The value of the multiplier in the economy illustrated in the figure above is
A) 2.0.
B) 2.5.
C) 4.0.
D) 10.0.
Answer: A 【支出乘數】
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25. In the above figure, the shift from AE0 to AE1 might have been caused by
A) an increase in government expenditures.
B) an increase in the real interest rate.
C) an increase in the price level.
D) All of the above answers are correct.
Answer: A 【支出乘數】
26. A change in ________ results in a movement along the short-run aggregate supply
curve but no shift in the short-run aggregate supply curve.
A) the money wage rate
B) technology
C) the quantity of capital
D) the price level
Answer: D 【總合供需模型】
27. Which of the following people would be considered unemployed by the Bureau of
Labor Statistics?
I. Mrs. X retires from her job at the age of 55 and does not look for another job.
II. Mr. Y was laid off from his job as a welder, but expects to be rehired in 8
months.
A) I only
B) II only
C) both I and II
D) neither I nor II
Answer: B 【失業與通貨膨脹】
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28. If the CPI was 121.5 at the end of 2004 and 138.3 at the end of 2005, the inflation
rate over these two years was
A) 10.2 percent.
B) 13.8 percent.
C) 12.2 percent.
D) 16.8 percent.
Answer: B 【失業與通貨膨脹】
29. The difference between gross investment and net investment is
A) inflation.
B) depreciation.
C) initial capital.
D) consumption.
Answer: B 【國民所得的衡量】
30. A change in the full-employment quantity of labor ____ the short-run aggregate
supply curve and ____ the long-run aggregate supply curve.
A) shifts; shifts
B) shifts; does not shift
C) does not shift; shifts
D) does not shift; does not shift
Answer: A 【失業與通貨膨脹】
Part II. Problems (4 questions, 40 points total)
Write your answer in the paper provided. Show your calculations and justifications
to your answer (points are in brackets after the question).
1. Though bicycles are considered good substitutes for automobiles, their production
costs are certainly drove up by the increasing gasoline prices as well. Carefully
examine in graph or in words how the increasing oil prices may impact the price
and quantity sold of bicycles. (8%)
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2. The diagram below shows the demand, the marginal cost, and the long run average
cost facing Calypso U.S. Pipeline, a firm that operates a natural gas distribution
system in the United States. Calypso is a natural monopoly that cannot price
discriminate.
What quantity will Calypso produce, at what price, producer surplus, consumer
surplus, and deadweight loss if Calypso is
(a) An unregulated profit-maximizing firm? (4%)
(b) Regulated to make zero economic profit? (4%)
(c) Regulated to be efficient? (4%)
3. Suppose:
Y= C + I + G
C= 300 + 0.6 Yd
I= 400
G= 760
T= 100 +0.5 Y
Yd = Y- T
Calculate:
(a) Y* = ? (6%)
(b) Expenditure multiplier = ? (6%)
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4. In the United Kingdom in 2006
Item
Billions of pounds
Wages paid to labor
685
Consumption expenditure
791
Taxes
394
Transfer payments
567
Profits
273
Investment
209
Government expenditure
267
Exports
322
Saving
38
Imports
366
Please calculate GDP in the United Kingdom. (8%)
[End of Exam]
Solution to 2008 Economics Subject Test
選擇題解答：
選擇題題號
答案
選擇題題號
答案
選擇題題號
答案
1
D
11
C
21
C
2
D
12
B
22
C
3
B
13
D
23
A
4
B
14
D
24
A
5
D
15
A
25
A
6
B
16
A
26
D
7
A
17
B
27
B
8
A
18
A
28
B
9
D
19
B
29
B
10
A
20
C
30
A
非選擇題解答
1.
Answer:
P
S’
E’
S
P**
P*
E
D’
D
Q
The increasing in gasoline price not only causes the increase in demand for
bicycles as substitutes for automobiles (so that both the equilibrium price and
quantity will increase) but also causes a decrease in supply for bicycles (so that
the equilibrium price will increase combined with a decrease in quantity). As a
result, the equilibrium price for bicycles will increase. However, its impact on
the equilibrium quantity (sold) is uncertain. 【需求、供給與市場均衡】
2.
Answer:
(a) Calypso will produce 2 cubic feet a day and sell it for 6 cents a cubic foot.
Draw in the marginal revenue curve. It runs from 10 on the y-axis to 2.5 on
the x-axis. The profit-maximizing output is 2 cubic feet at which marginal
revenue equals marginal cost. The price charged is the highest that people
will pay for 2 cubic feet a day, which is 6 cents a cubic foot. The consumer
surplus is 4 cents, the producer surplus is 8 cents, and the deadweight loss is 4
cents.
(b) Calypso will produce 3 cubic feet a day and charge 4 cents a cubic foot. If
Calypso is regulated to earn only normal profit, it produces the output at
which price equals average total cost—at the intersection of the demand
curve and the ATC curve. The consumer surplus is 9 cents, the producer
surplus is 6 cents, and the deadweight loss is 1 cent.
(c) The firm will produce 4 cubic feet a day and charge 2 cents a cubic foot. If
the firm is regulated to be efficient, it will produce the quantity at which price
(marginal social benefit) equals marginal social cost—at the intersection of
the demand curve and the marginal social cost curve. The consumer surplus is
16 cents, the producer surplus is 0 cents, and the deadweight loss is 0 cents.
【獨占與寡占市場】
3.
Answer:
(a) Y= 300 +0.6 (Y- 100 -0.5Y) + 400 + 760
Y- 0.6 (1- 0.5)Y = 300 -60 + 400 +760
Y [1- 0.6 (1- 0.5)] = 1400
0.7 Y = 1400
∴Y* = 2,000 #
(b) Expenditure multiplier:
△Y/△C = 1/ [1-0.6 (1- 0.5)] = 10 / 7
4.
【支出乘數】
Answer:
GDP is $1223 billions of pounds.
GDP equals the sum of consumption expenditure plus investment plus
government expenditure plus exports minus imports. That is, GDP equals $791
plus $209 plus $267 plus $322 minus $366. GDP equals $1223.
【國民所得的衡量】