微观经济学试题英文版

Managerial Economics

Part 1:

1. The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that:

a. good A is a normal good.

b. good B is an inferior good.

c. goods A and B are substitutes.

d. goods A and B are complements.

e. none of the above.

Choose: d) the definition os complements

2. Joe's budget line is 15F + 45C = 900. When Joe chooses his most preferred market basket, he buys 10 units of C. therefore, he also buys :

a. 10 units of F

b. 30 units of F

c. 50 units of F

d. 60 units of F

e. None of the above

Choose: b) We assume that Joe will spend all his income. If C = 10, then 15F =900 – 45(10) =450, so F = 450/15 =30.

3. Kim only buys coffee and compact discs. Coffee costs $0.60 per cup, and CDs cost $12.00 each. She has $18 per week to spend on these two goods. If Kim is maximizing her utility, her marginal rate of substitution of coffee for CDs is:

a. 0.05

b. 20

c. 18

d. 1.50

e. None of the above

Choose: a) At Kim's most preferred market basket, her MRS equals the price ratio (Pcoffee/PCD), which equals 0.6/12 or 0.05.

4. The bandwagon effect corresponds best to which of the following?

a. snob effect.

b. external economy.

c. negative network externality.

d. positive network externality.

Choose: d)

5. A Giffen good

a. is always the same as an inferior good.

b. is the special subset of inferior goods in which the substitution effect dominates the income effect.

c. is the special subset of inferior goods in which the income effect dominates the substitution effect.

d. must have a downward sloping demand curv

e.

Choose: c) the definition of Giffen good

6. An Engel curve for a good has a positive slope if the good is :

a. an inferior good.

b. a Giffen good.

c. a normal goo

d. d. a, b, and c are tru

e.

e. None of the above is true.

Choose: c) Inferior and Giffen goods have negatively sloped Engel curves.

7. The price of beef and quantity of beef traded are P* and Q*, respectively. Given this information, consumer surplus is the area:

a. 0BCQ*

b. ABC

c. ACP*

d. CBP*

e. 0ACQ*

Choose: d)Consumer surplus is the area between the demand line and the price.

8. In Figure 1, holding income constant, what change must have occurred to rotate the budget line from the old line(1) to the new line(2)?

Figure 1

a. The price of Coke fell

b. The price of pizza fell

c. The price of pizza rose

d. The price of Coke went up

e. b and c

Choose: b) The horizontal intercept, I/PC, is unchanged, which implies that PC could not have changed (holding income constant). Since the slope is PP/PC, the slope change means that the price of pizza must have fallen. This can also be seen intuitively from Figure 1, since the consumer can now buy more pizza than before if he spends all his income on pizza.

9. Andy buys 10 pounds of onions per month when the price is $0.75 per pound. If the price falls to $0.50 per pound, he buys 30 pounds of onions. What is his arc elasticity of demand over this price range?

a. - 1.33

b.–2

c.–2.5

d. - 6

e. None of the above is correct.

Choose: c) Using the arc elasticity formula,