18.  As currently calculated, the CPI tends to overstate the true inflation rate because
(A) we cannot know what the true inflation rate is.
(B) it fails to correctly measure quality changes for some products.
(C) the market basket selected is inappropriate.
(D) the market basket fails to weigh housing costs sufficienty.

1. If there is a collusive agreement in a duopoly to maximize profit, then the price will(A) equal the marginal cost of production.(B) equal the average total cost of production.(C) be the same as the price set by a monopoly.(D) be the same as the price set by a competitive industry.

2. Mark Zuckerberg believes everyone in the world should have Internet access.(A) This is a positive statent and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost.(B) This is a positive staterment and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit.(C) This is a normative statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost.(D) This is a normative statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit.

3. If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must(A) be using resources inefficiently today, but will be more efficient in the future.(B) be producing along the production possibilies frontier today and its production possibilities frontier will shift outward if it produces more capital goods.(C) must be producing outside the production possibilities frontier and will continue to do so in future.(D) must not have private ownership of property and will have to follow planning authorities' decions today and in the future.

4. Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago. Based on this information, which of the following is TRUE in the market for beef?(A) Consumer surplus will decrease.(B) Producer surplus will increase.(C) Equilibrium price will decrease.(D) Equilibrium quantity will increase.

5. In October 2008, Iceland's central bank increased its lending rate to 18% in an "effort to prop up the country's frozen currency and markets." (www.nytimes.com, October, 29,2008) As a result, the and demand curve for Icelandic krona shifted , holding all else the same.(A) interest rate differential between Taiwan and Icelandic interest rates increased; rightward(B) interest rate differential between Taiwan and Icelandic interest rates decreased; leftward(C) Taiwan dollar appreciated relative to the krona; rightward(D) value of Taiwan exports to Iceland increased; leftward

6.Suppose a tax is imposed on sellers. The more inelastic the demand for the taxed item, the(A) greater the share of the tax paid by sellers.(B) smaller the deadweight loss from the tax.(C) larger the decrease in consumption because of the tax.(D) larger the decrease in supply because of the tax.

7. In 2006, the European Union (EU) threatened to ban imports of long-grain rice because traces of genetically modified rice were found mixed in to commercial supplies. Instead of a ban, suppose the EU placed a tariff on the import of long-grain rice. Which of the following would be an outcome of this tarif?(A) The EU would gain tariff revenue.(B) Deadweight loss would decrease.(C) European rice producers would decrease production.(D) The price of long-grain rice in the EU would not change.

8. The diamond-water paradox of value can be explained by(A) distinguishing between total utility and marginal utility.(B) water's high level of utility relative to diamonds.(C) water's low price relative to diamonds.(D) the fact that utility cannot be measured.

9. Utilitarianism argues that(A) Only equality brings efficiency.(B) There is a tradeoff between equality and efficiency.(C) The result is fair if the rules are fair.(D) The competitive market is fair.

複選題10. Which of the following differs between a perfectly competitive market and a market with a perfectly price discriminating monopoly?(A) The amount of producer surplus(B) The quantity produced(C) The total surplus(D) None of the above because they are all the same in a perfecly competitive market and in a market with a perfectly price discriminating monopoly.

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