GSBA 511 Final Sample Practice Problems
代写微观经济学 1. If price is below equilibrium price, a. then there is excess supply and we expect price to rise b. then there is excess supply and
1.
If price is below equilibrium price,
a. then there is excess supply and we expect price to rise
b. then there is excess supply and we expect price to fall
c. there is excess demand and we expect price to rise
d. a return to equilibrium is not possible
2. If market demand is Q = 20 – 4p, then the point own price elasticity of demand is
a. equal to -4
b. equal to -4p/(10 – p)
c. equal to -4Q/p
d. equal to –4p/(20-4p)
3. If for a market inverse demand the Lerner Index is 1/3, then the own point price elasticity of demand is
a. -4
b. -1/2
c. -3
d. none of the above
4. One of the key non-own price determinants of supply is
a. income of the consumer
b. resource prices
c. production substitute prices
d. both b and c
5. 代写微观经济学
If the own price elasticity of demand is less than one in absolute value, then
a. increases in price will generate increases in revenue
b. decreases in price will generate increases in revenue
c. the slope of the demand schedule is greater than one in absolute value
d. a and c
6. For a Giffen good
a. an increase in own price will lead to an increase in quantity demanded
b. the consumer always wants less of it as opposed to more at each p if income goes up
c. the demand schedule shifts down if incomes go up
d. all of the above
7. The secondary criterion used by economists to judge the usefulness of a model is
a. realism of the model’s assumptions
b. the predictive power of the model’s implications
c. its complexity
d. none of the above
8. A key property of the capitalistic or market system is
a. the government owns a majority of resources
b. the government determines most prices
c. perfect competition is the force that makes self-interest lead to inefficiency
d. consumers are on the supply side of resource markets
9. 代写微观经济学
New housing is a normal good, so that decreases in incomes and increases in the cost of construction materials will lead to
a. lower new house prices and greater new house purchases in equilibrium
b. lower new house prices and an ambiguous effect on new house purchases in equilibrium
c. an ambiguous effect on new house prices and lower new house purchases in equilibrium
d. a rise in the demand for new houses
10. Suppose that goods X and Y are complements, that there are resource price decreases in the production of X and that the price of Y goes up. Then we would expect
a. the equilibrium quantity of X to go down
b. the equilibrium price of X to go up and the equilibrium quantity of X to go up
c. the equilibrium price of X to go down and the change in equilibrium quantity to be ambiguous
d. an ambiguous effect on the price of X and an increase in the quantity of X
11. The assumptions of an economic model
a. are logically deduced from the implications
b. are the starting point of building an economic model
c. are the same as the implications
d. all of the above
Answer questions 12-14 using the following information: 代写微观经济学
A demand forecast is conducted using the equation Q = a + bp + cpc + dI, where Q is quantity demanded, p is own price, pc is the price of a related product, and I is income. Regression results give us the estimates
a = 10, b = -3, c = 2, and d = 5
12. The own price elasticity at p = 1, pc = 1, and I = 10 is
a. -0.5
b. -3
c. -.6
d. -0.05
13. Using your point elasticity from question 12 as your only estimate, the effect on revenue of a 5% increase in price is as follows:
a. revenue will go up 3.84 %
b. revenue will go down by 2 %
c. revenue will go up by 4.75%
d. none of the above
14. If the rival firm raises pc from $1 to $2, then the above focus firm will experience
a. a two percent increase in Q
b. a four percent increase in Q
c. a two unit increase in Q
d. none of the above
15. An investor has a utility function defined on wealth which is given by u = w1/2 . The investor considers two gambles
gamble #1: $100 with probability .2 and $4 with probability .8
gamble #2: $81 with probability .1 and $25 with probability .9
a. gamble 2 is preferred to gamble 1
b. gamble 1 is indifferent to gamble 2
c. gamble 1 is preferred to gamble 2
d. the investor is risk neutral
Answer questions 16-18, using the following information. 代写微观经济学
A decision maker is risk averse with current wealth equal to $250,000. An accident can occur with probability .5 and damages due to the accident are $250,000. The decision maker’s utility function is u = w1/2.
16. If a premium of $125,000 for full insurance coverage were offered to the decision maker, then
a. the decision maker would not take the offer
b. the decision maker would take the offer
c. the decision maker would be indifferent between taking the offer and not taking the offer
d. the decision maker would not have sufficient information to make the decision
17. The maximum premium that the decision maker would pay for full coverage is
a. $58,000
b. $187,500
c. $150,000
d. none of the above
18. At a premium of $130,000
a. the insurance company with transactions costs will definitely suffer a loss
b. the insurance company with transactions costs could possibly make a profit
c. the insurance company makes a profit of $100,000
d. none of the above
Answer questions 19-23 using the diagram below of a competitive industry.
There are 1000 identical firms. Assume that AVCi = MCi at an output level of A. Draw the market supply in the market diagram.
19. The firm will charge a price of
a. L
b. K
c. G
d. none of the above
20. The firm will produce an output
a. A
b. B
c. I
d. between B and H
21. The firm’s supply schedule for positive output is
a. MCi above the point (A, C)
b. MCi above the point (B, G)
c. MCi above the point (H, L)
d. none of the above
22. The firm makes
a. positive profit
b. negative profit
c. zero profit
d. an indeterminate level of profit (one can not tell given the information of the question)
23. In the longer run, there will be
a. more firms in this industry
b. less firms in this industry
c. the same number of firms in this industry
d. entry
24. If, in the long-run, an excise tax is imposed on a perfectly competitive market, then
a. the buyers’ price will stay the same
b. the entire burden of the tax will be pushed to the producers
c. the burden of the tax will be shared by the consumers and the producers
d. the entire burden of the tax will be pushed to the consumers
25. 代写微观经济学
Assume an initial long-run equilibrium. If technological progress results in a decrease in average and marginal costs in the short-run, then, in a competitive industry, existing firms adopting the technological change will, before entry,
a. make normal profit
b. make deficient profit
c. not reap benefits from the change
d. enjoy short-run excess profits
26. If a binding minimum wage constraint is placed on a competitive labor market
a. all suppliers of labor always gain
b. demanders of labor always gain
c. consumers and producers (in aggregate) do not suffer a dead weight loss.
d. none of the above
27. In a competitive rental housing market, a binding rent control
a. will always help all potential renters
b. will sometimes help landlords
c. will lead to greater housing supply
d. none of the above
28. A trade tariff
a. will increase the producer surplus of the domestic producers
b. will lower the consumer surplus of domestic consumers
c. will bring in tax revenue to the domestic government
d. all of the above
29. For a perfectly competitive firm in the short run, a decrease in FC (fixed cost) will
a. cause the firm to lower price
b. make MC less at each output
c. result in an expansion of output
d. not cause a change in price or output
Answer questions 30- 34 using the following diagram of a monopoly.
30. Producer surplus at the monopoly output is
a. HJLM
b. RIN
c. RKLM
d. RJLM
31. At the monopoly equilibrium, the Lerner Index is
a. 0J/(JH)
b. JH/(0J)
c. 0H/(0J)
d. IH/0I
32. The deadweight loss of consumer surplus associated with monopoly is
a. GLN
b. JKL
c. MGN
d. IJLG
33. If the monopoly ATC intersects MC at output C, then
a. regulation of the competitive price will result in excess profit
b. regulation of the competitive price will result in deficient profit
c. regulation of the competitive price will result in zero profit
d. none of the above
34. If an antitrust break up of the monopoly were to create a competitive industry with a supply that would be given by the line dotted line JZ then
a. anti-trust would be superior to efficient regulation
b. efficient regulation would be better than antitrust
c. efficient regulation and antitrust would result in the same welfare gain
d. none of the above
Answer questions 35-38 using the following information. 代写微观经济学
In the diagram below we show a labor market.
35. The monopsony equilibrium is at point
a. E
b. F
c. G
d. H
36. The deadweight loss of monopsony is
a. area[GEF]
b. area[HEF]
c. area[AIEH]
d. area[ABGH]
37. Suppose that the labor market is unionized and monopsonistic. Then the deadweight loss associated with a minimum wage at B is
a.area[HEF]
b. zero
c. area[ BIF]
d. area[ ABFH]
38. Suppose that the labor market is unionized and monopsonistic. Then the deadweight loss associated with a minimum wage at C is
a.the same as in pure monopsony
b. area[BCEF]
c. area[GEF]
d. area[ABGH]
39. If MC(Q1 +Q2) = 20, E1 = -2 and E2 = -4, an optimal third degree scheme dictates that
a. p1 = 32 and p2 = 48
b. p1= 40 and p2 = 80/3
c. p1= 32 and p2 = 24
d. none of the above
40. 代写微观经济学
Let 10 consumers have the aggregate demand p = 50 – Q and let a monopoly firm have marginal cost MC = Q. All 10 consumers are identical. The optimal two part tariff for this market is
a. p = 5 and T* = 100
b. p = 25 and T* = 31.25
c. p = 50 and T* = 55
d. none of the above
41. Suppose that, in an auction, the valuations are $10, $70, $80, $90, $130, $170. Suppose that the auction type is a second price sealed bid auction.
a. the person with valuation $80 will bid $70
b. the winner will be the person with the valuation of $130
c. the winner will pay $170
d. none of the above
42. Two Nash Cournot competitors have marginal revenues given by MR1 = 60 – q1 – q2 and MR2 = 60 – q1 – q2. If the marginal cost functions are MC1 = 2q1 and MC2 = 2q2, then the NashCournot equilibrium is
a. q1 = 20 and q2 = 20
b. q1 = 10 and q2 = 10
c. q1 = 15 and q2 = 15
d. none of the above
43. If I am a principal and my agent possesses information before contracting which I cannot observe
a. then there is a hidden action agency problem
b. then there is always a hidden information agency problem
c. then there is a hidden information agency problem only if my agent’s incentives are not aligned with my incentives
d. then there is moral hazard
44. A pure public good
a. is rivalrous
b. is excludable
c. is easy to supply through a private profit maximizing firm
d. none of the above
45. 代写微观经济学
A price for a pollution permit per unit of emissions can
a. induce efficiency if the government knows the MCAi ‘s of all firms
b. not induce efficiency because it is uniform
c. cannot achieve pollution reduction at a lower cost than a uniform standard
d. raises the profits of polluting firms
46. With a positive externality
a. there is under production of the product generating the externality
b. the marginal private cost of the product generating the externality is greater than the marginal social cost
c. the marginal private cost of the product generating the externality is less than the marginal social cost
d. the demand schedule for the product generating the externality is too great (shifted too far to the northeast)
47. Regulating a monopoly at the average cost price
a. will induce excess profit if there are economies of scale
b. will induce negative profit if there are economies of scale
c. will shift the monopoly’s costs up
d. none of the above
Answer questions 48-50 using the following payoff matrix
48. We have that
a. (2,2) is a Nash equilibrium
b. (1,1) is a dominant strategy equilibrium
c. (1,2) is a Nash equilibrium
d. a and b
49. Let Firm A be a first mover in a sequential move dynamic game. Then
a. (1, match) is the only perfect Nash equilibrium
b. (2, match) is a perfect Nash equilibrium
c. (2, oppose) is a Nash equilibrium
d. none of the above
50. Again, let Firm A be a first mover in a sequential move dynamic game. Then
a. (1, always 1) is a Nash equilibrium
b. (2, always 2) is a Nash equilibrium
c. (1, oppose) is a Nash equilibrium
d. a and b
