10. (5%) To maximize profit, a firm should rent capital until
(A) the marginal product of capital is zero.
(B) the marginal product of capital begins to fall.
(C) the marginal product of capital equals the rate of return of capital.
(D) the capital-labor ratio is optimal.

6. (5%) Regard to the Ricardian Equivaience Theorem, which of the following statement is incorrect? (A) It implies that a tax cut is not a free lunch. (B) It holds by assuming a perfect credit market. (C) It implies that government saving declines but private saving goes up when there is a tax cut in the current period. (D) it still holds even if people could pass away in the future period.

7. (5%) Regard to a competitive equilibrium in an economy, which of the following statement is incorrect? (A) Prices are exogenous. (B) The representative consumer makes his optimal decisions. (C) The perfectly competitive firm maximizes its profit. (D) All markets clear.

8.(5%) Consider a represen ntative agent who can live for two periods. In each period, he/she has one unit of time and allocates his/her time on working (hi) and leisure (V). The agent's life-time utility is given by:  where i denotes the period of time； β is the subjective discount factor； and ci represents consumption in period i. Furthermore, we denote the interest rate as r； the wage rate of working in period i as w； and the saving in period 1 as s. Which of the following statement is correct? (A)The life-time budget constraint is given by: (B) The optimal consumption in period 1 is: (C) The optimal decision on leisure in period 2 is: (D) All of the above.

9. (5%) Following Question 8, now suppose that the government introduces a policy: imposing a lump-sum tax (T.) on agents who are in their first period of life but giving a lump-sum transfer (Ta) to agents who are in their second period of life. Which of the following statement is correct? (A) If T1=T2, there is no effect on the representative agent's optimal decisions. (B) if T1＞T2(1+r),cs increases. (C) If the interest rate is zero, the life-time budget constraint is unchanged. (D) If T1＜T2/(1+r), the representative agent benefits from the policy.

複選題11. (5%) Use the midpoint method to calculate the percentage change in unit price and total expropriation quantity for facial masks before and after January 1, 2021, and then use your answers to calculate the elasticity of demand, assuming the total amount expropriated by the Taiwanese government is the actual quantity demanded for each price, holding other things equal. Which of these statements are true? (A)The percentage change in unit price has a magnitude smaller than 20%. (B)The percentage change in total expropriation quantity for facial masks is greater or equal to 40%. (C) The elasticity of demand for facial masks has a magnitude smaller than 2. (D) The demand for facial masks is inelastic. (E) None of the above.

複選題12. (5%) Use the midpoint method to calculate the percentage change in weekly quantity of facial masks rationing between week 6 and week 1, and then use your answers to calculate the elasticity of demand assuming the quantity of facial masks rationed in week 6 and week 1 are the actual quantity demanded for each corresponding price, holding other things equal. Which of these statements are true? (A)The percentage change in quantity demanded for facial masks is greater than 70%. (B) The percentage change in quantity demanded is likely smaller if week 7 data were used. (C) The elasticity of demand has a magnitude smaller than 3. (D) The demand for facial masks is elastic. (E) None of the above.

複選題13. (5%) Use the midpoint method to calculate the percentage change in weekly quantity of facial masks rationing between week 5 and week 3, and the percentage change in quantity demanded for boxed faciai masks at Yuanlin's Ji- Sin Pharmacy before/after the new local case was a announced. Which of these statements are true? (A)The demand curve of facial masks shifted to the right after the new local case as announced. (B) The percentage change is larger at Yuanlin's Ji-Sin Pharmacy than from weekly quantity rationed. (C) The percentage change in weekly quantity between week 5 and week 3 is greater than 120%. (D) The percentage change at Yuanlin's Ji-Sin Pharmacy is smaller or equal to 150%. (E) None of the above.

14. (5%) Which of the following statement(s) is true? (A)Announcing a price change in January on December 9 shifts current demand to the left.(B)Announcing a price change in January on December 9 cause current shortage due to price control. (C) Implementing a new price and increasing the amount expropriated after New Year's weekend shifts both demand and supply to the right, so equilibrium quantity increases.(D) After the long weekend of New Year's Day, supply shifts in a magnitude larger than demand. (E)None of the above.

1.(3%) True or False: Perfect competition requires perfect substitutes.(A)O(B)X

2.(3%) True or False: Free entry and exit causes firms to earn zero profit in the long run.(A)O(B)X