2. The federal government pays airlines to service small cities in the United States through a subsidy program called Essential Air Service which was established in 1978 when the airline industry was deregulated. Most subsidies can't exceed $200 per passenger. What is NOT an effect of this subsidy?
(A) an increase in price and an increase in quantity produced
(B) an increase in supply
(C) an increase in variable cost
(D) inefficient overproduction

1. "The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." Why do buyers care so much about a tax on insulin, a vital daily medicine for those with diabetes? (A) Because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic (B) Because sellers increase their profit when there is a tax (C) Because more insulin can be provided to those in need (D) Because the tax incidence is equal between the buyers and sellers

3. Suppose that Richard has just told you that he would not pay more than $100 dollars for one of his favorite baseball cards. You offer to give him $110 dollars for his card and he refuses. What consumer choice theory or effect explains this result? (A) the endowment effect (B) bounded rationality (C) bounded self-interest (D) the endorsement effect

4. Since natural monopolies have a declining average cost curve, regulating natural monopolies by setting price equal to marginal cost would (A) cause the monopolist to operate at a loss. (B) result in a less than optimal total surplus. (C) maximize producer surplus. (D) result in higher profits for the monopoly.

5. Four people each have a different willingness to pay for one unit of a good: George will pay $15, Glen will pay $12, Tom will pay $10, and Peter will pay $8. If the price is equal to $9 per unit then the quantity demanded in the market will be ______ and the consumer surplus for this unit will be ______. (A) 3； $10 (B) 3； $37 (C) 3； $36 (D) 4； $8

6. In mid-2008 Delta increased the price of a New York to LA ticket by 10 percent. As a result of this price hike, there was a ______ shift in the demand curve for a ticket on Continental because the price of a ______ had risen. (A) rightward； complement (B) leftward； substitute (C) leftward； complement (D) rightward； substitute

7. Which of the following statements is correct for both a monopolist and a perfectly competitive firm?i. The firm maximizes profits by equating marginal revenue with marginal cost. ii. The firm maximizes profits by equating price with marginal cost. iii. Demand equals marginal revenue. iv. Average revenue equals price.(A) i), iii), and iv) only(B) i) and iv) only(C) i), ii), and iv) only(D) i), ii), iii), and iv)

8. Which of the following statements is correct? (A) If duopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly. (B) Although the logic of self-interest decreases a duopoly's price below the monopoly price, it does not push the duopolists to reach the competitive price. (C) Although the logic of self-interest increases a duopoly's level of output above the monopoly level, it does not push the duopolists to reach the competitive level. (D) All of the above are correct.

9. If the government runs a budget deficit, then (A) national saving is negative. (B) household but not business saving must pay for the deficit. (C) part of household and business saving finances the deficit. (D) national saving cannot fund investment.

10. In 2007, interest rates in Germany were 4.7 percent while the inflation rate was 1.7 percent. In 2008, interest rates increased to 5.3 percent and the inflation rate increased to 2.0. As a result, there is (A) a leftward shift in Germany's demand for money curve. (B) a downward movement along Germany's demand for money curve. (C) a rightward shift in Germany's money supply curve. (D) an upward movement along Germany's demand for money curve.

50.1997年7月在泰國市場上因為投資人均預期泰幣會大幅貶值,因此紛紛拋售手中的泰幣兌,換成美元攜出國外,但泰國中央銀行向投資人保證泰幣將維持1美元:25 泰銖的固定匯率,此舉將產生什麼後果? (A)中央銀行的外匯存底不變。(B)熱錢大量 流入泰國。(C)中央銀行的外匯(美元)快速流失。(D)泰幣升值。(E)中央銀行的外匯(美元)快速增加。

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