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Micro Ver 2 Test Practice mock test

Microeconomics (Trường Đại học Ngoại thương)

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QT.KT.001/BM04. For : WRITTEN AND MULTIPLE CHOICE

FOREIGN TRADE UNIVERSITY FINAL EXAM PAPER
FACULTY OF INTERNATIONAL KTEE201
ECONOMICS __________________________________
_________________________
Phase: 1 Semester : II Academic year: 2021 – 2022

PAPER NO.: 2 Full time Intake : 60 (HQP in IB)

Date : 31/10/2021 Time: 15 :30-16 :30
Duration: 60 minutes (not include paper distribution time)

MONITOR 1 EXAMINER 1 SCORE

BY NUMBER:

MONITOR 2 EXAMINER 2 BY WORD:

Section A : Multiple choice

You must answer ALL questions in this section. Select the correct
answer and write it down in the Answer column
Content
1. Hotdogs and buns are complements. What will happen to the equilibrium price and quantity in
the market for buns if hotdogs become less expensive? The equilibrium price for buns will
A. Increase and the equilibrium quantity will decrease.
B. Increase and the equilibrium quantity will increase.
C. Decrease and the equilibrium quantity will decrease.
D. Decrease and the equilibrium quantity will increase.
2. Which of the following statements is FALSE?
A. Good A and good B are complements. When the price of good A decreases, the demand
for good B increases.
B. Good A and good B are complements. When the price of good A increases, the demand
for good B decreases.
C. Good A and good B are substitutes. When the price of good A decreases, the demand for
good B increases.
D. Good A and good B are substitutes. When the price of good A increases, the demand for
good B increases.

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3. Demand for good Z is given by

QD = 20 – P.
Income falls for individuals in this market, and demand for good Z is now given by
QD = 30 – (½)P.
Holding everything else constant, from this information we know that good Z is
A. A normal good
B. An inferior good
C. A complement
D. A substitute
4. Consider the guitar market. The market demand for guitars is given by P = -2Q + 12. The market
supply of guitars is given by P = Q. P is price and Q is the amount of guitars. The government
mandates a price floor for guitars of $6 each. Holding everything else constant, which of the
following statements is true?
A. There will be a surplus of 3 guitars.
B. There will be a shortage of 3 guitars.
C. 4 guitars are traded in this market.
D. There will be no exchange of guitars in this market when this price floor is implemented.
E. Answers (B) and (C) are both correct.
5. A massive tornado tears through southwest Wisconsin destroying 1,500 acres of farmland used to
grow corn. Holding everything else constant, what does this do to the supply and demand of
corn?

A. The demand shifts left which causes a downward movement in the price of corn.
B. The demand shifts right which causes a downward movement in the price of corn.
C. The supply shifts right which causes an upward movement in the price of corn.
D. The supply shifts left which causes an upward movement in the price of corn.
6. If the government uses a price support program to implement the price floor of $10/peach, what
is the total cost to the government? Assume there is no storage cost to the government for this
program.
A. $60
B. $96
C. $70
D. $100
7. Suppose there are only two customers in the market for Duct Tape and their individual demand
curves are given as follows:
Dexter’s demand for Duct Tape: QD = 5 - PD Calculate total market demand: Qd1+ Qd2
Patrick’s demand for Duct Tape: PD = 7 - QD
ShurTech is the only manufacturer of Duct Tape and their supply curve is as follows:
ShurTech’s supply of Duct Tape: QS = 8PS - 8
Given this information, what is the market equilibrium price of Duct Tape?

A. $1.00
B. $2.00
C. $3.00
D. $4.00

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8. Which of the following is true?

A. TC - MC = VC
B. AVC + TC = FC
C. AFC + AVC = ATC
D. MC + MR = profits

9. 9. You read in the Friday newspaper that consumers have a linear demand for coffee mugs, wanting
50 coffee mugs at a price of $5/mug and 70 mugs at a price of $3/mug. On Sunday, however, you
read that a change in preferences on Saturday has made it so consumers still have a linear demand,
but want 4 fewer coffee mugs at a price of $8/mug and 12 fewer mugs at a price of $4/mug than they
wanted initially. What is the new market demand equation for coffee mugs? (Hint: Although both
demand curves are linear they are not necessarily parallel to one another.)
A. Q = 100 – 10P
B. Q = 100 – 1/8P
C. P = 10 – 1/10Q
D. P = 10 – 1/8Q
10. 10. You have $2000 you must either spend on chickens ($10 each) or pigs ($60 each). If the number
of chickens you buy is y and the number of pigs you buy is x, which of the following lines describes
the relationship between the money you have to spend and your purchases of chickens and pigs?
A. y = 200 – 6x
B. x = 300 – 5y
C. y = 100 – 3x
D. x = 200 – 3y
11. Which of the following statements is correct?
A. Along the budget line, consuming more of one good implies consuming more of the
other.
B. The slope of the budget line shows there is no tradeoff between the two goods because
the consumer can buy each of them.
C. If the consumer's budget increases, the budget line shifts leftward and its slope does
not change.
D. The slope of the budget line shows the opportunity cost of the good measured along
the x-axis.
12. For complements:

A. Cross price elasticity of demand is negative.

B. Cross price elasticity of demand is positive.
C. Price elasticity of demand is negative.
D. Price elasticity of demand is positive.

13. Which of the following is an implicit cost to a business?

A. The costs that are associated with factors of production that can be varied in the short-
term
B. The forgone opportunity for the business to engage in the current activity
C. Any and all costs to the firm that are termed accounting costs
D. None of the above

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14. Air pollution from automobile exhausts, and water pollution steel plants are examples of
A. external economies.
B. negative externalities.
C. internal spillover.
D. social distortion

15. In 1976, a frost in Brazil killed over 500 million coffee trees and damaged many more. A civil
war in Angola, a major supplier of coffee, cut back its crop. And, an earthquake in Guatemala
disrupted the flow of coffee. In spite of these calamities, these three producers reported an increase
in export earnings. On the basis of this information, which of the following must be true?
A. The demand for coffee is price elastic.
B. The supply of coffee is price elastic.
C. The demand for coffee is price inelastic.
D. The supply of coffee is price inelastic
16. A utility contour (or indifference curve) shows all the alternative combinations of two
consumption goods that
A. can be produced with a given set of resources and technology.
B. yield the same total of utility.
C. can be purchased with a given budget at given prices.
D. equate the marginal utilities of these goods and, therefore, make the consumer indifferent
between them

17. You won a free ticket to see Jay-Z and Kanye West perform in Chicago. The ticket has a market-
value of $200 if you decide to sell it. You value seeing the concert at $400. The cost of gas and
wear and tear on your car to get to and from Chicago is $50. You’re employed at the Overture
Center and you were scheduled to work 6 hours at $10/hour the night of the concert (you can’t
work at all if you go to the concert). You’re required to find someone to take your place if you
can’t make it to work. The only person you can find who will take your place at work demands
you pay him $20. What is the opportunity cost of going to the concert?
A. $130
B. $330
C. $530
D. $730

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18. Use the production possibility frontier for lemons and haircuts given below to answer this
question.

Which of the following is TRUE?

A. A is an inefficient production point in this economy.
B. The opportunity cost for haircuts is greater at point A than point B.
C. The opportunity cost for haircuts is greater at point B than point A.
D. B is an infeasible production point in this economy.
Use the information below to answer the following two (2) questions.

The price of hot dog buns (a complement to hot dogs) increases from $2 to $3. At the same time, the
wages of the workers at the hot dog production plant decrease from $14 per hour to $10 per hour.

19. What happens to the price of hot dogs?

A. The price of hot dogs decreases.
B. The price of hot dogs increases.
C. The price of hot dogs stays the same.
D. The price of hot dogs is indeterminate.
20. What happens to the equilibrium quantity of hot dogs?
A. The quantity sold increases.
B. The quantity sold decreases.
C. The quantity sold stays the same.
D. The quantity sold is indeterminate

21. Supply for Brewer Baseball Hats is given by Q = 10 + P. Demand for Brewer Baseball Hats
is given by Q = 100 - 2P. The State of Wisconsin wants more people to sport Brewers hats and
decides to offer a subsidy to induce 80 hats to be sold in the market. What is the cost of this
program to the State?
A. $4800
B. $5600
C. $60
D. $1200

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22. Which of following would be considered a positive question?

A. Does the university admit the right number of Minnesotans?
B. Do Minnesotans deserve an advantage in the admissions process?
C. Do Minnesotans have a statistical advantage in the admissions process?
D. Should I include State of residence when I am calculating whether or not there is
discrimination in the admissions process?

23. You own a company that produces lasers. The company earns (and pays to you) a profit of $2
million per year. You are offered $10 million from investors to purchase your laser company and
take over management responsibilities. You would take the $10 million and invest it in the stock
market which would give you an average return of 5% per year. What is the (yearly) opportunity
cost of selling the company?
A. $1,500,000 per year
B. $3,000,000 per year
C. $2,500,000 per year
D. $3,500,000 per year

24. Which of the following factors of production are NOT properly matched with their factor
payments?
A. Capital – interest
B. Land – profits
C. Labor - wages
D. All are properly matched
25. Which of the following terms means "all other things equal"?
A. Post Hoc, Ergo Propter Hoc
B. Fallacy of Composition
C. Ceteris Paribus
D. None of the above
26. Economic growth can be illustrated with the use of a production possibilities curve:
A. By a shift to the left of the curve
B. By a shift to the right of the curve
C. By a point on the inside of the curve
D. By a point on the outside of the curve

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27. A small developing country in Central America has an economy that exhibits the following
characteristics:
(1) exchange occurs through markets,
(2) private property is permitted, but there is also a large public sector,
(3) what will be produced is decided by the government and the operation of markets, and
(4) there is also a strong social desire to maintain the status quo.
A. This is definitely a capitalist system
B. This is definitely a command system
C. The economy is most likely a mixed system
D. It is impossible to tell what type of economic system this is from the information given
28. 28. Wisconsin farmers lobby for a price support of $9/pumpkin. Supply of pumpkins is given by
Q = 5P - 10. Demand is Q = -6P + 67. The state makes excess pumpkins into pies to be given away
for free to the homeless at a cost to the state of $1/pumpkin. How much does this price support
program cost the State? In your calculation include the cost to the state of both purchasing the
pumpkins as well as making them available as pies to the homeless.
A. $117
B. $198
C. $220
D. $175

Use the following diagram to answer the next three (3) questions.

29. 29. What is the consumer surplus in the free-market for peaches?
A. $160
B. $32
C. $128
D. $98

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30. 30. Now, if the government institutes a price support equal to $10/peach, what is the consumer
surplus in the market for peaches?
A. $49
B. $98
C. $256
D. $48

Section B: Written / Case study

Exercises

1. If the market supply for a commodity is given by QS= 50,000 ,

(A) are we dealing with the market period, the short run, or the long run?
(B) If the market demand is given by QD=70,000 - 5000P and P is expressed in dollars, what
is the market equilibrium price (P)?
(C) If the market demand function changes to QD = 100 000 – 5000P, what is the new market
equilibrium price (P0 )?

2. There are 10,000 identical individuals in the market for commodity X, each with a demand
function given by Qd= 12 – 2P, and 1000 identical producers of commodity X, each with a
function given by Qs = 20 P.
(A) Find the market demand function and the market supply function for commodity X.
(B) Find the market demand schedule and the market supply schedule of commodity X and
from them find the equilibrium price and the equilibrium quantity
(C) Obtain the equilibrium price and the equilibrium quantity mathematically

--------------------------------------End of test--------------------------------------
Note: - This paper contains 30 questions from Section A, 2 questions from Section B.
- Students are not allowed to use any material during the examination
- Invigilators will not provide further explanation .

APPROVED BY
HEAD OF DEPARTMENT

Assoc. Prof. Dr. Nguyen Thi Tuong Anh

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