Microeconomics I Quiz#1 Answer Key

Fall 2009

10/22(四)

I. Multiple choice questions (4*15=60%)

1) Society faces trade-offs because of

A) government regulations. B) greedy corporations. C) faceless bureaucrats. D) scarcity. Answer: D

2) Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

A) increase in price but a decrease in quantity. B) decrease in price but an increase in quantity. C) increase in both price and quantity. D) decrease in both price and quantity. Answer: B

3) A competitive equilibrium is described by

A) a price only. B) a quantity only.

C) the excess supply minus the excess demand. D) a price and a quantity. Answer: D

4) 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.

Answer: B

5) Suppose there are 100 identical firms in the rag industry, and each firm is willing to supply 10 rags at any price. The market supply curve will be a(n)

A) vertical line where Q = 10.

B) vertical line where Q = 100.

C) vertical line where Q = 1000.

D) horizontal line where Q = 1000.

Answer: C

6) Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute value, a $1 specific tax will

A) raise the price to consumers by 50 cents.

B) raise the price to consumers by less than 50 cents.

C) raise the price to consumers by more than 50 cents.

D) raise the price to consumers by $1.

Answer: B

7) If the supply curve for orange juice is estimated to be Q = 40 + 2p, then

A) supply is price elastic at all prices.

B) supply is price inelastic at all prices.

C) supply is elastic only at prices below 20.

D) no general statements about price elasticity of supply can be made. Answer: B

8) The above figure shows the market for crude oil. If a consumer group convinces the government to set a maximum price of $2 per barrel, then

A) 300 barrels of crude oil will be sold at $2.

B) zero barrels of crude oil will be sold.

C) zero barrels of crude oil will be demanded.

D) None of the above.

Answer: B

9) If two goods are perfect substitutes, then the indifference curves for those two goods would be

A) upward-sloping and concave to the origin.

B) downward-sloping and convex to the origin.

C) downward sloping and straight.

D) L-shaped.

Answer: C

10) If Fred's marginal rate of substitution of salad for pizza equals five, then

A) he would give up five pizzas to get the next salad.

B) he would give up five salads to get the next pizza.

C) he will eat five times as much pizza as salad.

D) he will eat five times as much salad as pizza.

Answer: B

11) Sarah has the utility function U(X,Y)= X0.5Y0.25. When Sarah consumes X=2 and Y=6 she has a marginal rate of substitution of

A) -12

B) -1/6

C) -6

D) -1/12

Answer: A

12) Joe's income is $500, the price of food (F) is $2, and the price of shelter (S) is $100. Which of the following bundles is in Joe's opportunity set?

A) 50 units of food, five units of shelter

B) 200 units of food, two units of shelter

C) 100 units of food, one unit of shelter

D) 150 units of food, three units of shelter

Answer: C

13) If the price of one good increases while the price of the other good and the consumer's income remain unchanged, 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 inward without a change in slope.

D) The budget line shifts outward without a change in slope.

Answer:

A

14) Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. What is the price of chicken?

A) $0.80/lb

B) $1.25/lb

C) $4/lb

D) $5/lb

Answer: D

15) Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which of the following best describes Max's preferences?

A) d > b > e

B) d = b = e

C) a = b > c

D) a = b > e

Answer: D

II. Problem

1.(ch2, AP7) (10%)

Suppose the demand for onion ice cream was described by the equation QD ? 20 ? p , and the supply was described by QS ? ?40 ? p . What are the equilibrium price and quantity? Show your answer using a graph.

Answer:

Set QS ? QD and solve.

P* ? 30 Q* ? ?10 Equilibrium quantity is zero, because the demand curve lies below the supply curve at all

prices where output is positive. See Figure 2.4.

Figure 2.4

2. (Ch3, AP6) (5+5+5+4+4=23%)

For each of the utility functions below, draw a set of indifference curves showing utility levels U ? 12, U ? 16, and U ? 24.

a. U ? XY

b.U ? X ? Y

c. U ? X ? Y

d.What is true about the commodities in (b)? (How is their relationship of substitute?)

e. What about the commodities in (c)? (Is there good or bad commodity? Which one is good? And which one is bad? How is their relationship?)

Answer:

a.

Figure 3.1

b.

Figure 3.2

c.

Figure 3.3

d. They are perfect substitutes.

e. X is a good, and Y is a bad, providing exactly the opposite of X in utility per unit.

3.(ch3,Q23) (15%)

Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is U(S,T)=2ST.What are her marginal utility of shoes and her marginal utility of dancing? It costs Linda $50 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $500 to spend on clothing and dancing

a. What is the equation for her budget line? Draw it (with T on the vertical axis), and label the slope and intercepts.

b. What is Linda's marginal rate of substitution? Explain.

c. Solve mathematically for her optimal bundle. Show in a diagram how to determine this bundle using indifference curves and a budget line.

Answer:

For Linda, MUS= 2T and MUT= 2S.

a. 50S ? 50T ? 500

b. MRS ? –(?U/?S)/(?U/?T) ? ?T/S

c. MRT ? ?ps/pt

T/S ? 50/50 T ? S Substitute into budget constraint 50T ? 50T ? 500 T ? 5, S ?

5

第二篇：关于中秋节作文：中秋节吃大餐

关于中秋节作文：中秋节吃大餐

摘要： 按照惯例,我们早餐喜欢吃地瓜粥。今天因为地瓜没有了,妈妈只好黔驴技穷地削些芋头来滥竽充数。没想到那些种在阳台的芋头很好吃,全家都贪得无厌地自食其果……

今天是中秋节,因为英明伟大的政府建设国家、爱护百姓的功绩罄竹难书,所以放假一天,爸爸妈妈特地带我们到动物园玩。

按照惯例,我们早餐喜欢吃地瓜粥。今天因为地瓜没有了,妈妈只好黔驴技穷地削些芋头来滥竽充数。没想到那些种在阳台的芋头很好吃,全家都贪得无厌地自食其果。

出门前,我那徐娘半老的妈妈打扮得花枝招展,鬼斧神工到一点也看不出是个糟糠之妻。头顶羽毛未丰的爸爸也赶紧洗心革面沐猴而冠,换上双管齐下的西装后英俊得惨绝人寰,鸡飞狗跳到让人退避三舍。东施效颦爱漂亮的妹妹更是穿上调整型内衣愚公移山,画虎类犬地打扮得艳光四射趾高气扬地穿上新买的高跟鞋。

我们一丘之貉坐着素车白马,很快地到了动物园,不料参观的人多到豺狼当道草木皆兵,害我们一家骨肉分离。妻离子散的爸爸鞠躬尽瘁地到处广播,终于找到差点认贼作父的我和遇人不淑的妹妹,困兽之斗中,我们螳臂当车力排众议推己及人地挤到猴子栅栏前,鱼目混珠拍了张强颜欢笑的全家福。

接着到鸡鸣狗盗的鸟园欣赏风声鹤唳哀鸿遍野的大自然美妙音乐。后来爸爸口沫横飞地为我们指鹿为马时,吹来一阵凉风,唾面自干的滋味,让人毛骨悚然不寒而栗,妈妈连忙为爸爸黄袍加身,也叮嘱我们要克绍箕裘。

到了傍晚,因为假日的关系,餐厅家家鹊占鸠巢六畜兴旺,所以妈妈带着我们孟母三迁,最后终于决定吃火锅。有家餐厅刚换壁纸,家徒四壁很是美丽,灯火阑珊配上四面楚歌,非常有气氛。十面埋伏的女服务生们四处招蜂引蝶,忙着为客人围魏救赵,口蜜腹剑到让人误认为到了西方极乐世界。

饥不择食的我们点了综合火锅,坐怀不乱的爸爸当头棒喝先发制人,要求为虎作伥拿着刀子班门弄斧的女服务生,快点将狡兔死走狗烹,因为尸位素餐的我们一家子早就添油加醋完毕,就等着火锅赶快沉鱼落雁好问鼎中原,可惜锅盖太小,有点欲盖弥彰。

汤料沸腾后,热得乐不思蜀的我们赶紧解衣推食好大义灭亲上下其手,一网打尽捞个水落石出。

火锅在我们呼天怆地面红耳赤地蚕食鲸吞后,很快就只剩沧海一粟,和少数的漏网之鱼。母范犹存的妈妈想要丢三落四放冬粉时,发现火苗已经危在旦夕,只好投鼠忌器。幸好狐假虎威的爸爸呼卢喝雉叫来店员抱薪救火,终于死灰复燃,

也让如坐针毯的我们中饱私囊。鸟尽弓藏后,我们一家子酒囊饭袋,沆瀣一气,我和妹妹更是小人得志,沾沾自喜。

不料结帐的时候,老板露出庐山真面目,居然要一饭千金,爸爸气得吴牛喘月,妈妈也委屈地牛衣对泣。