财政学英文测试题：TBChap003

1、Chapter 03Tools of Normative Analysis Multiple Choice Questions 1.Normative economics  A. does not depend on market interactions.B. only looks at the best parts of the economy.C. examines how the economy actually works (as opposed to how it should work).D. emb

2、odies value judgments. 2.The absolute value of the slope of the production possibilities curve is the  A. marginal rate of substitution.B. contract curve.C. offer curve.D. Engel curve.E. marginal rate of transformation. 3.The marginal rate of substitution

3、 is  A. the slope of the utility curve.B. the slope of the contract curve.C. the slope of the utility possibilities curve.D. none of these answer options are correct. 4.The First Fundamental Theorem of Welfare Economics requires  A. producers and con

4、sumers to be price takers.B. that there be a market for every commodity.C. that the economy operate at some point on the utility possibility curve.D. all of these answer options are correct. 5.Points outside the production possibility frontier are  A. producible.B.

5、 endowment points.C. consumer equilibrium points.D. unattainable. 6.Market failure can occur when  A. monopoly power exists in the market.B. markets are missing.C. consumers can influence prices.D. all of these answer options are correct. 7.A pu

6、blic good is  A. a good that the public must pay for.B. nonexcludable in consumption.C. more costly than a private good.D. paid for by the government. 8.Merit goods  A. are provided for those who behave themselves and play nice.B. should be prov

7、ided even if there is no demand for them.C. increase in costs along with demand.D. none of these answer options are correct. 9.A social welfare function  A. is a function made by the Department of Welfare.B. is a function that shows that the utilities of society ar

8、e incorporated into society's well-being.C. can never be derived numerically.D. all of these answer options are correct. 10.Movement from an inefficient allocation to an efficient allocation in the Edgeworth Box will  A. increase the utility of all individuals.B.

9、60;increase the utility of at least one individual, but may decrease the level of utility of another person.C. increase the utility of one individual, but cannot decrease the utility of any individual.D. decrease the utility of all individuals. 11.Points on the utility possibility fro

10、ntier are  A. inefficient.B. points of incomplete preferences.C. not producible.D. Pareto. 12.The Edgeworth Box should  A. lie inside the PPF.B. lie partially inside the PPF.C. lie completely outside of the PPF.D. never touch the PPF.&

11、#160;13.Pareto points in the Edgeworth Box are  A. found when utility curves are tangent.B. found when MRS are equal.C. found when one person cannot be made better off without making another person worse off.D. all of these answer options are correct.E. none of the

12、se answer options are correct. 14.The Second Fundamental Theorem of Welfare Economics requires  A. that indifference curves be convex to the origin.B. that isoquants be concave to the origin.C. that there are no set prices for Pareto efficient allocations.D. that p

13、roduction be twice as large as consumption.E. all of these answer options are correct. 15.Welfare economics is concerned with individual desirability of alternative economic states.  A. TrueB. FalseC. Uncertain 16.The contract curve is the collection of points

14、 where utility curves are tangent in the Edgeworth box.  A. TrueB. FalseC. Uncertain 17.The Utility Possibility Frontier is derived from utility curves.  A. TrueB. FalseC. Uncertain 18.When the First Fundamental Theorem of Welfare Economics

15、 doesn't hold, there is a market failure.  A. TrueB. FalseC. Uncertain 19.Externalities can be difficult to detect in open economies.  A. TrueB. FalseC. Uncertain 20.Social indifference curves are the same as a Social Welfare Function.&

16、#160; A. TrueB. FalseC. Uncertain 21.A utility possibilities frontier need not incorporate the utility of every individual.  A. TrueB. FalseC. Uncertain 22.In equilibrium, the MRT should not equal the MRS of all individuals.  A. T

17、rueB. FalseC. Uncertain 23.If the market does not allocate resources perfectly, the government can.  A. TrueB. FalseC. Uncertain 24.Normative economics is more important than positive economics.  A. TrueB. FalseC. Uncertain 2

18、5.Marginal cost of a product is the incremental cost of one additional unit of input.  A. TrueB. FalseC. Uncertain 26.Pareto improvement can be a reallocation of resources that makes more than one person better off.  A. TrueB. FalseC. Uncertain&

19、#160; Essay Questions 27.Consider an Edgeworth economy where there are two citizens, Mr. Cortopassi and Ms. Thomas. There are only two goods to be consumed in the economy, Beer and Pretzels. The total amount of Beer is 12 units. The total amount of Pretzels is 12 units. Answer the followin

20、g: Suppose Mr. Cortopassi has utility for the two goods characterized as UC(B,P) = B + P. Ms. Thomas's utility function is UT(B,P) = B + P. Identify the points that are Pareto efficient.      28.Imagine a simple economy with only two people, Leroy and Percy. If the

21、Social Welfare Function is W = UL + UP, and the Utility Possibilities Frontier is UPF = UL + 2UP, what will be the societal optimum?        29.If James has a utility curve characterized by the function of U = 2X3 Y2, what is his marginal rate of substitution b

22、etween goods X and Y?      30.Consider a simple exchange economy where the marginal rate of transformation between two goods is greater than the marginal rate of substitution for the same goods. Can Pareto equilibrium be derived?      31.Su

23、ppose that a competitive firm's marginal cost of producing output q is given by MC = 5 + 2q. Assume that the market price of the firm's product is $27. What level of output will the firm produce?      32.Social welfare functions can be formed in many ways. They

24、can be additive, meaning that the all utilities curves are added together. They incorporate the idea of least-best, meaning that the utility of the person with the least is maximized. If you were a central planner for an economy, what type of social welfare function would you create?  

25、0;   33.Merit goods have received considerable attention toward the end of this chapter. Can concerts and other publicly provided services be rationalized using these ideas?      34.Why might asymmetric information contribute to the problem of a market fa

26、ilure?      Chapter 03 Tools of Normative Analysis Answer Key Multiple Choice Questions 1.Normative economics  A. does not depend on market interactions.B. only looks at the best parts of the economy.C. examines how the economy actuall

27、y works (as opposed to how it should work).D. embodies value judgments. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Introduction 2.The absolute value of the slope of the production possibilities curve is the  A. m

28、arginal rate of substitution.B. contract curve.C. offer curve.D. Engel curve.E. marginal rate of transformation. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 3.The marginal rate of substitution is

29、  A. the slope of the utility curve.B. the slope of the contract curve.C. the slope of the utility possibilities curve.D. none of these answer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic:

30、Welfare Economics 4.The First Fundamental Theorem of Welfare Economics requires  A. producers and consumers to be price takers.B. that there be a market for every commodity.C. that the economy operate at some point on the utility possibility curve.D. all of these a

31、nswer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: The First Fundamental Theorem of Welfare Economics 5.Points outside the production possibility frontier are  A. producible.B. endowment points

32、.C. consumer equilibrium points.D. unattainable. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 6.Market failure can occur when  A. monopoly power

33、 exists in the market.B. markets are missing.C. consumers can influence prices.D. all of these answer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Market Failure 7.A public good is  A.

34、 a good that the public must pay for.B. nonexcludable in consumption.C. more costly than a private good.D. paid for by the government. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Market Failure 8.Merit goods 

35、 A. are provided for those who behave themselves and play nice.B. should be provided even if there is no demand for them.C. increase in costs along with demand.D. none of these answer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBloom

36、s: RememberDifficulty: 1 EasyTopic: Buying into Welfare Economics 9.A social welfare function  A. is a function made by the Department of Welfare.B. is a function that shows that the utilities of society are incorporated into society's well-being.C. can never be der

37、ived numerically.D. all of these answer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 10.Movement from an inefficient allocation to an effic

38、ient allocation in the Edgeworth Box will  A. increase the utility of all individuals.B. increase the utility of at least one individual, but may decrease the level of utility of another person.C. increase the utility of one individual, but cannot decrease the utility of any

39、 individual.D. decrease the utility of all individuals. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Welfare Economics 11.Points on the utility possibility frontier are  A. inefficient.B. points of incompl

40、ete preferences.C. not producible.D. Pareto. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 12.The Edgeworth Box should  A. lie inside the PPF.B.&

41、#160;lie partially inside the PPF.C. lie completely outside of the PPF.D. never touch the PPF. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 13.Pareto points in the Edgeworth Box are  A. found

42、 when utility curves are tangent.B. found when MRS are equal.C. found when one person cannot be made better off without making another person worse off.D. all of these answer options are correct.E. none of these answer options are correct. AACSB: Reflective ThinkingAccessibi

43、lity: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 14.The Second Fundamental Theorem of Welfare Economics requires  A. that indifference curves be convex to the origin.B. that isoquants be concave to the origin.C. that there are no set p

44、rices for Pareto efficient allocations.D. that production be twice as large as consumption.E. all of these answer options are correct. AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of We

45、lfare Economics 15.Welfare economics is concerned with individual desirability of alternative economic states.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Welfare Economics

46、60;16.The contract curve is the collection of points where utility curves are tangent in the Edgeworth box.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 17.The Ut

47、ility Possibility Frontier is derived from utility curves.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 18.When the

48、 First Fundamental Theorem of Welfare Economics doesn't hold, there is a market failure.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: The First Fundamental Theorem of Welfare Ec

49、onomics 19.Externalities can be difficult to detect in open economies.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Market Failure 20.Social indifference curves are the sa

50、me as a Social Welfare Function.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 21.A utility possibilities frontier n

51、eed not incorporate the utility of every individual.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 22.In equilibrium

52、, the MRT should not equal the MRS of all individuals.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 23.If the market does not allocate resources perfectly, the go

53、vernment can.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: UnderstandDifficulty: 2 MediumTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 24.Normative economics is more important than positi

54、ve economics.  A. TrueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Introduction 25.Marginal cost of a product is the incremental cost of one additional unit of input.  A. Tr

55、ueB. FalseC. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics 26.Pareto improvement can be a reallocation of resources that makes more than one person better off.  A. TrueB. FalseC

56、. Uncertain AACSB: Reflective ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 1 EasyTopic: Welfare Economics  Essay Questions 27.Consider an Edgeworth economy where there are two citizens, Mr. Cortopassi and Ms. Thomas. There are only two goods to be co

57、nsumed in the economy, Beer and Pretzels. The total amount of Beer is 12 units. The total amount of Pretzels is 12 units. Answer the following: Suppose Mr. Cortopassi has utility for the two goods characterized as UC(B,P) = B + P. Ms. Thomas's utility function is UT(B,P) = B + P. Identify the po

58、ints that are Pareto efficient.  Since the MRSs of the two are equal at every point in the Edgewood Box, every point is Pareto. AACSB: AnalyticBlooms: ApplyDifficulty: 3 HardTopic: Welfare Economics 28.Imagine a simple economy with only two people, Leroy and Percy. If the Social

59、Welfare Function is W = UL + UP, and the Utility Possibilities Frontier is UPF = UL + 2UP, what will be the societal optimum?    The optimum would be a corner solution found the same way as if goods were perfect substitutes. Percy receives none, and all goes to Leroy. AACSB: AnalyticBlooms: ApplyDifficulty: 3 HardTopic: Fairness and the Second Fundamental Theorem of Welfare Economics 29.If James has a utility curve characterized by the function of U = 2X3 Y2, what is his marginal rate of substituti