微观经济学试题英文版

/8ManagerialEconomicsPart1:ThepriceofgoodAgoesup.AsaresultthedemandforgoodBshiftstotheleft.Fromthiswecaninferthat:goodAisanormalgood.goodBisaninferiorgood.goodsAandBaresubstitutes.goodsAandBarecomplements.noneoftheabove.Choose:d)thedefinitionoscomplementsJoe'sbudgetlineis15F+45C=900.WhenJoechooseshismostpreferredmarketbasket,hebuys10unitsofC.therefore,healsobuys:a.10unitsofFb.30unitsofFc.50unitsofFd.60unitsofFe.NoneoftheaboveChoose:b)WeassumethatJoewillspendallhisincome.IfC=10,then15F=900-45(10)=450,soF=450/15=30.Kimonlybuyscoffeeandcompactdiscs.Coffeecosts$0.60percup,andCDscost$12.00each.Shehas$18perweektospendonthesetwogoods.IfKimismaximizingherutility,hermarginalrateofsubstitutionofcoffeeforCDsis:a.0.05b.20c.18d.1.50e.NoneoftheaboveChoose:a)AtKim'smostpreferredmarketbasket,herMRSequalsthepriceratio(Pcoffee/PCD),whichequals0.6/12or0.05.Thebandwagoneffectcorrespondsbesttowhichofthefollowing?snobeffect.externaleconomy.negativenetworkexternality.positivenetworkexternality.Choose:d)AGiffengoodisalwaysthesameasaninferiorgood.isthespecialsubsetofinferiorgoodsinwhichthesubstitutioneffectdominatestheincomeeffect.isthespecialsubsetofinferiorgoodsinwhichtheincomeeffectdominatesthesubstitutioneffect.musthaveadownwardslopingdemandcurve.Choose:c)thedefinitionofGiffengoodAnEngelcurveforagoodhasapositiveslopeifthegoodis:a.aninferiorgood.b.aGiffengood.c.anormalgood. d.a,b,andcaretrue.e.Noneoftheaboveistrue.Choose:c)InferiorandGiffengoodshavenegativelyslopedEngelcurves.ThepriceofbeefandquantityofbeeftradedareP*andQ*,respectively.Given

thisinformation,consumersurplusisthearea:Price.thisinformation,consumersurplusisthearea:Price.Week)a.0BCQ*b.ABCc.ACP*d.CBP* e.0ACQ*Choose:d)Consumersurplusistheareabetweenthedemandlineandtheprice.InFigure1,holdingincomeconstant,whatchangemusthaveoccurredtorotatethebudgetlinefromtheoldline(1)tothenewline(2)?PizzaCokePizzaCokeFigure1ThepriceofCokefellThepriceofpizzafellThepriceofpizzaroseThepriceofCokewentupbandcChoose:b)Thehorizontalintercept,I/PC,isunchanged,whichimpliesthatPCcouldnothavechanged(holdingincomeconstant).SincetheslopeisPP/PC,theslopechangemeansthatthepriceofpizzamusthavefallen.ThiscanalsobeseenintuitivelyfromFigure1,sincetheconsumercannowbuymorepizzathanbeforeifhespendsallhisincomeonpizza.Andybuys10poundsofonionspermonthwhenthepriceis$0.75perpound.Ifthepricefallsto$0.50perpound,hebuys30poundsofonions.Whatishisarc

elasticityofdemandoverthispricerange?a.-1.33b.-2c.-2.5d.-6e.Noneoftheaboveiscorrect.(0.500.75)2(3010)22.5(0.500.75)2(3010)22.5epR£ (3010)~PQ(0.500.75)Thenexttwoquestionsrefertothefollowinginformation:OpieandGomeraretheonlytwoconsumersinthevideocassetterentalmarketintheMayberry.TheirdemandcurvesperweekarepicturedinFigure2.Ifrentalscost$2.50each,thetotal quantitydemandedeachweekinthemarketis:a.3b.6c.15d.10e.Noneoftheaboveiscorrect.Choose:b)Addhorizontallytogetthemarketdemandcurve.AtP=$2.50,QO=3andQG=3foratotalof6unitsdemanded.Foradecreaseinpricefrom$2.50to$1.50,marketdemandis:a.elastic.b.unitelastic.c.inelastic.d.perfectlyinelastic.e.Moreinformationisneeded.Choose:a)Demandispriceelastic:EP=%AQ/%AP=[(15-6)/6]/[(2.50-1.50)/2.50]=-3.75OPIE

AspresidentandCEOofMegaWorldindustries,youmustdecideonsomeveryriskyalternativeinvestments:ProjectProfitifSuccessfulProbabilityofSuccessLossifFailureProbabilityofFailureA$10million.5-$6million.5B$50million.2-$4million.8C$90million.1-$10million.9D$20million.8-$50million.2E$15million.4$0.6Thehighestexpectedreturnbelongstoinvestmenta.A.b.B. c.C.d.D.e.EChoose:b)Ea=2Eb=6.8Ec=0Ed=6Ee=6Anindividualwithaconstantmarginalutilityofincomewillbea.riskaverse.b. riskneutral.c.riskloving.d. insufficientinformationforadecision.Choose:b)Anindividualwithaconstantmarginalutilityofincomeisriskneutral.Inthefigurebelow,whatistrueaboutthetwojobs?Job1hasalowerstandarddeviationthanJob2.Alloutcomesinbothjobshavethesameprobabilityofoccurrence.Arisk-aversepersonwouldpreferJob2.Arisk-neutralpersonwouldpreferJob1.Job1hasahigherexpectedincomethanJob2.Choose:a)Job1hasalowerstandarddeviationthanJob2.ExpectedincomeofJob1equalstoJob2.

Thedemandcurvesforsteak,eggs,andhotdogsaregiveninthetablebelow.Thecurrentpriceofsteakis$5.Thepriceofeggsis$2.50,andthepriceof hotdogsis$0.75.Fillintheremainingcolumnsofthetableusingthisinformation.Indicatewhichgoodsaresubstitutesandwhichgoodsarecomplements.GoodDemandEquationSteakPriceElasticityofDemandEggPriceElasticityofDemandHotdogPriceElasticityofDemandSteak1 1Ds5002FS—Pe——Ph10 100Egg1De753FEFS—Ph10Hotdog1 1Dh300-PhPs—PE2 10Solution:GoodDemandEquationSteakPriceElasticityofDemandEggPriceElasticityofDemandHotdogPriceElasticityofDemandSteak1 1Ds5002PS—Pe——Ph10 100-0.020-0.000511.53E-5Egg1De753PEPS—Ph10-0.0799-0.121.20E-3Hotdog1 1Dh300-PhPs—PE2 100.0160.00082-0.0012Steakandeggsarecomplements.Steakandhotdogsandeggsandhotdogsaresubstitutes.Drawindifferencecurvestorepresentthefollowingdescriptionsofconsumerpreferences:Ican'ttastethedifferencebetweenappleandgrapejelly,butIlikethemboth.Ionlylikegrapejellyandnevereatapplejelly.Appleandgrapejellyarebettermixed,althoughIdon'tcaretoomuchabouttheproportions.

Answer:SeeFigure7(a).Sincetheconsumercannottellthedifferencebetweenthetwoflavors,allhewouldcareaboutisthetotalamountofjellyhehas.SeeFigure7(b).Anincreaseintheamountofapplejellydoesnotaffecttheconsumersincehenevereatsit.SeeFigure7(c).Here,amixedbundleisbetterthananextremeone,buttheconsumeriswillingtotradeoffthedifferentflavors.OuncesofAppleJellyFigure7(c)OuncesofAppleJellyFigure7(c)Therearereasonsotherthanfads,fashions,andconsumerinsecurityforbandwagonandsnobeffects.Varioustypesofexternalitiesintheconsumptionofcertaingoodsalsoexist.Explainwhichtheseeffects(bandwagonorsnob)mightbepresentinthefollowingcases:ArestaurantthatisoftencrowdedApersonalcomputersoftwareproductArockconcertAnswer:Apricedecreasewillattractmorecustomers,butthecrowding(longerlines,poorerservice)willdiscourageothers.Thiswouldresembleasnobeffect.

Themorepeopleyouexpecttobuyasoftwareproduct,themorelikelyyoucanfindanotherexperiencedusertoaskquestionsaboutit.Also,themorelikelyitisthatacomputerbookstorewillcarrypublicationsabouthowtousethesoftware.Thus,wewouldexpecttoseeabandwagoneffect.Here,crowdingmightdiscouragesomecustomers.But,sincepartoftheenjoymentofaconcertisseeingthebandwithotherfans,wemightobserveabandwagoneffect.TomWilsonistheoperationsmanagerforBi-Corp,arealestateinvestmentfirm.TommustdecideifBi-Corpistoinvestinastripmallinanortheastmetropolitan area.Iftheshoppingcenterishighlysuccessful,aftertaxprofitswillbe$100,000peryear.Moderatesuccesswouldyieldanannualprofitof$50,000,whiletheprojectwilllose$10,000peryearifitisunsuccessful.Pastexperience