Micro Economics Answer keys to Mid exam
BMA5001 Managerial Economics
Sem I, 2012/2013
ANSWER KEYS TO MIDTERM EXAM
QUESTION I (4x10 = 40 marks)
Choose the most correct answer for each of the following ten multiple choice questions.
Note: No explanation is required. Please answer in the order of the questions.
1. Ceteris paribus, which of the followings would shift the demand curve for new textbook to the right? a.
b.
c.
d.
e.
f.
An increase in the price of the textbook;
An increase in the supply of equivalent used textbooks; a only; b only;
Either of the above;
*None of the above;
2. Jay always feels 1 unit of good X is equivalent to 2 units of good Y to his taste. When the market prices are $2 for X and $3 for Y:
a.
b.
c.
d.
Jay would buy X and Y in the ration of 1:2;
Jay would buy X and Y in the ration of 3:2;
Jay would buy only Y;
*None of the above.
3. Refer to the following indifference map for Denise.
Which of the following statements is correct?
a.
b.
c.
d.
Denise receives no satisfaction from Good A;
*Denise receives no satisfaction from Good B;
Denise will only consume A and B in fixed proportions;
None of the above.
4. When a good has a unitary price elasticity, consumer expenditures for the good ___________.
a. change in the same direction as a price change;
b. change in the opposite direction and by the same percentage as any price change;
c. change in the opposite direction to a price change, but not necessarily by the same percentage as the price change;
d. *do not change when the price of the good decreases.
1
5. Suppose that, in a perfectly competitive market with a generic market demand, all firms active in the market are operating under a constant marginal cost. Concerned about overconsumption of the product, the government has decided to increase the price by $3 and is contemplating on introducing a specific sales tax whose statutory duty is on sellers or a price floor. a.
b.
c.
d.
The deadweight loss is
Sem I, 2012/2013
ANSWER KEYS TO MIDTERM EXAM
QUESTION I (4x10 = 40 marks)
Choose the most correct answer for each of the following ten multiple choice questions.
Note: No explanation is required. Please answer in the order of the questions.
1. Ceteris paribus, which of the followings would shift the demand curve for new textbook to the right? a.
b.
c.
d.
e.
f.
An increase in the price of the textbook;
An increase in the supply of equivalent used textbooks; a only; b only;
Either of the above;
*None of the above;
2. Jay always feels 1 unit of good X is equivalent to 2 units of good Y to his taste. When the market prices are $2 for X and $3 for Y:
a.
b.
c.
d.
Jay would buy X and Y in the ration of 1:2;
Jay would buy X and Y in the ration of 3:2;
Jay would buy only Y;
*None of the above.
3. Refer to the following indifference map for Denise.
Which of the following statements is correct?
a.
b.
c.
d.
Denise receives no satisfaction from Good A;
*Denise receives no satisfaction from Good B;
Denise will only consume A and B in fixed proportions;
None of the above.
4. When a good has a unitary price elasticity, consumer expenditures for the good ___________.
a. change in the same direction as a price change;
b. change in the opposite direction and by the same percentage as any price change;
c. change in the opposite direction to a price change, but not necessarily by the same percentage as the price change;
d. *do not change when the price of the good decreases.
1
5. Suppose that, in a perfectly competitive market with a generic market demand, all firms active in the market are operating under a constant marginal cost. Concerned about overconsumption of the product, the government has decided to increase the price by $3 and is contemplating on introducing a specific sales tax whose statutory duty is on sellers or a price floor. a.
b.
c.
d.
The deadweight loss is