MOCK FINAL EXAMINATION IN PRINCIPLES OF

MICROECONOMICS
TEST
Time Duration: 60min

Student’s name: ……………………………………….ID code……………….……

Note: The exam includes of 50 multiple-choice questions. Students are not allowed to open any kind of material.
Please choose ONE correct answer among a, b, c, d and mark into the ANSWER SHEET in page 4..

PART 1: a. a surplus of 30 units would exist and price would

tend to fall.
1. If a nation is currently operating at a point inside
b. a surplus of 60 units would exist and price would
its production possibilities curve, it:
tend to rise.
a. has full employment.
c. a surplus of 60 units would exist and price would
b. has unemployment and/or inefficiently employed
tend to fall.
resources.
d. a shortage of 30 units would exist and price would
c. is operating at full potential.
tend to rise.
d. must reduce the output of one good in order to
8. The equilibrium price is one at which:
produce more of another good.
a. The market clears
2. Which of the following involve a trade-off b. The quantity supplied equals the quantity
a. buying a new car demanded
b. going to college c. Neither a shortage nor a surplus exists
c.watching a football game on Saturday afternoon d. All of the above occur.
d. All of the above 9. Demand is said to be inelastic if the
3. If the supply of apples decreases, which of the a. quantity demanded changes proportionately more
following will generally occur in a market setting? than the price.
a. Demand for apples will decrease. b. quantity demanded changes proportionately less
b. The quantity demanded will increase. than the price.
c. The costs of apple producers will decrease. c. price changes proportionately more than income.
d. The price of apples will increase. d. quantity demanded changes proportionately the
4. We observe a market in which the price has risen same as the price.
and the quantity sold risen as well. This could be 10. Refer to Graph. According to the graph, at a
caused only by: price of $7
a. an increase in demand
b. an increase in supply
c. a decrease in demand
d. a decrease in supply
5. If the price of gasoline fell, the market demand
curve for automobile tires, a complement, would
a. shift to the right.
a. there would be a shortage of 40 units.
b. shift to the left.
b. there would be a surplus of 40 units.
c. remain stationary.
c. there would be a surplus of 20 units.
d. become more elastic.
d. the market would be in equilibrium.
6. In the case of inferior goods
11. The marginal utility of the last unit of A
a. an increase in income will cause their demand to fall.
consumed is 12 and the marginal utility of the last
b. an increase in income will cause their demand to
units of В consumed is 8. What set of prices for A
increase.
and В respectively would be consistent with
c. an increase in the price of substitutes will cause the
consumer equilibrium?
price of substitutes to increase.
a. $4 and $6
d. Will be unaffected by changes in tastes.
b. $6 and $4
7. Refer to Table. c. $8 and $12
Price Quantity Demanded Quantity Supplied d. $16 and $9
$10 10 100 12. One consumer spends his income of I = $60 to
$8 20 80 buy 2 goods of X and Y. With Price of X $15, and
$6 30 60 price of Y $5, Budget line is:
$4 40 40 a. I = 15X +5 b. Y = 15 + 5X
$2 50 20 c. Y = 12 – 3X d. I = 12 - 3X
In the table shown, if the price were $8,

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13. The slope of any point on an indifferent curve is
known as:
a. the trade-off rate
b. the marginal rate of substitution
c. the marginal rate of trade-off
d. the marginal rate of indifferent
14. When marginal cost is less than average total
cost
a. marginal cost must be falling.
b. average total cost is falling.
c. average total cost is rising.
d. average variable cost must be falling
15. An example of an implicit cost of production
would be
a. the cost of raw materials for producing bread in a
bakery.
b. the cost of a delivery truck in a business that rarely
makes deliveries.
c. the income an entrepreneur could have earned
working for someone else.
d. all of the above.
16. Which of the lines is most likely to represent
marginal cost?
a. A b. B c. C d. D
17. In the long run, if 1000 units are produced at a
cost of $8000 and 1200 units at a cost of $9200, then
in this output range there are
a. diseconomies of scale
b. economies of scale
c. increasing marginal returns.
d. diminishing marginal returns
18. Which of the following statement is true ?
a. All costs are fixed in the long run
b.All cost are variable in the long run
c. All cost are fixed in the short run
d. All cost are varibable in the short run
19. As a seller, you would be considered part of a
perfectly competitive market if
a. your actions are quickly followed by competitors.
b. your pricing has no impact on the amount you can
sell.
c. your actions essentially have no effect on the market
price.
d. increases in the price of your product have an impact
on the market price.
20. If a seller is supplying a product that is slightly
different than that of many close competitors and is
able to charge a different price than competitors,
then the seller
a. is a monopolist.
b. is producing a homogeneous product
c. will eventually have to decrease the price
d. is participating in a monopolistically competitive
market
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21. For a profit maximizing monopolist
a. P = MR = MC
b. P > MR > MC
c. P > MR = MC.
d. P > MR < MC.
22. If average fixed costs equal $40 and average
total costs equal $120 when output is 100, then
the total variable cost must be
a. $40. b. $80.
c. $6,000 d. $8,000.
23. In competitive price-taker markets, firms are
assumed to be producing
a. identical products.
b. small products.
c. large products.
d. differentiated products
24. Competitive firms have
a. horizontal demand curves and can sell only a
limited amount at each price.
b. horizontal demand curves and can sell as much as
they want at the market price.
c. downward sloping demand curves and can sell
only a limited amount at each price.
d. downward sloping demand curves and can sell as
much as they want at the market price.
25. Due to the nature of the patent laws on
pharmaceuticals, the market for such drugs
a. switches from monopolistic to competitive once
the firm's patent runs out.
b. switches from competitive to monopolistic once
the firm's patent runs out.
c. always remains a monopolistic market.
d. always remains a competitive market.
26. The monopolist's profit-maximizing quantity
of output is determined by the intersection of
which of the following two curves?
a. marginal cost and demand
b. average cost and demand
c. marginal cost and marginal revenue
d. average cost and marginal revenue
27. When firms have agreements among
themselves on the quantity to produce and the
price to sell output they are organized as
a. a cartel.
b. a Nash arrangement.
c. competitive scale firms.
d. competitive oligopolists.
28. The value of the marginal product of labor is
a. The price of the output times the wage of labor.
b. The wage of labor times the quantity of labor.
c. The price of the output times the marginal product
of labor
d. none of above
29. An increase in the demand of apples will cause
all BUT which of the following?
a. An increase in price of apples
b. An in crease in value of marginal product of apple
pickers
c. in increase in the wage of apple pickers
d. a decrease in the number of apple pickers employed.
30. Refer to Graph. A profit maximizing monopoly 39. What is the marginal revenue of the monopolist?
would have a total cost equal to a. MR = 120 − 4Q
b. MR = 120 − Q
c. MR = 120Q − Q
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d. None of the above

40. What is the monopolist’s profit-maximizing
quantity?
a. Q = 33 b. Q = 23
a. P0 x Q1. c. Q = 34 d. None of the above
b. P0 x Q2. 41. What is the monopolist’s profit-maximizing
c. P0 x Q3. price?
d. (P1 - P0) x Q2. a. P = $63,6 b. P = $83,6
--------------------- c. P = $73,6 d. Không đáp án nào đúng
PART 2: 42. How much is the Lerner Index :
Senario 1 : Supply and Demand in market of good A a. L  0.3 b. L  1
P = 180 − 3Q and P = 60 + Q c. L  0.6 d None of the above
(P: VND100)/kg ; Q : 100kg) 43. How much is the consumer surplus?
31. What is the equilibrium point of the market? a. CS = $1058 b. CS = $580
a. P= 90 ; Q = 30 b. P = 30 ; Q = 90 c. CS = $529 d. Không đáp án nào đúng
c. P = 60 ; Q = 120 d. P = 120 ; Q = 60 44. What is the maximize profit of the monopolist?
32. How much is the Price elasticity of demand at the a.  = $1018 b.  = $1118
equilibrium point? c.  = $1218 d. Không đáp án nào đúng
a. E = -1 b. E = - 9 45. How much is the DWL?
c. E = - 3 d. None of the above a. DWL = $259
33. How much is the total surplus of this market? b. DWL = $529
a. TS = VND 135 million c. DWL = $952
b. TS = VND 45 million d. Không đáp án nào đúng
c. TS = VND 180 million 46. What is the supply curve of the monopolist?
d. None of the above a. MC curve
34. If Governmen imposes a tax of VND 20000/kg on b. A part of MC curve
the producers of good A, how will the market change? c. MR curve
a. The demand curve is shifted d. None of the above
b. The supply curve is shifted 47. What is the optimum quantity if this market
c. The marginal cost curve is shifted is competition one?
d. None of the above a. Q = 25
35. What is the new equilibrium? b. Q = 28,33
a. P = 110 ; Q = 50 ; b. P = 100 ; Q = 20 c. Q = 38,33
c. P = 105 ; Q = 25 d. P = 105 ; Q = 45 d. None of the above
36. How much is the total tax revenue? 48. If Governmen imposes a tax of $4/unit to the
a. TR(tax) = VND 33 million monopolist, what will be changed?
b. TR (tax) = VND 50 million a. The demand curve is shifted
c. TR (tax) = VND 60 million b. The supply curve is shifted
d. None of the above c. The marginal cost curve is shifted
37. How much is the tax burden that cosumers has d. None of the above
to bear? 49. What is the new optimum quantity and price?
a. VND 25 million a. Q = 22,2; P = 75,6
b. VND 30 million a. Q = 25,2 ; P = 27,6
c. VND12.5 million c. Q = 25,5 ; P = 79,6
d. None of the above d. None of the above
38. How much is the DWL?
a. VND 500.000 50. What is the monopolist’s profit:
b. VND 1 million a.  = 1170
c. There is no DWL b.  = 859
d. None of the above c. Nothing changes
Senario 2: A monopolist faces the demand d. None of the above
curve P = 120 − 2Q and knows the production cost of
TC = 0,5Q 2 + 5Q + 40
(P : USD/kg ; Q : kg)
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 ANSWER SHEET

Student’s name: ……………………………………….ID code……………….……

a b c d a b c d
1     26    
2     27    
3     28    
4     29    
5     30    
6     31    
7     32    
8     33    
9     34    
10     35    
11     36    
12     37    
13     38    
14     39    
15     40    
16     41    
17     42    
18     43    
19     44    
20     45    
21     46    
22     47    
23     48    
24     49    
25     50    