5. A production possibilities frontier (PPF) is characterized by increasing opportunity costs when
(A) the PPF is a straight line.
(B) the PPF is bowed inward.
(C)the PPF is bowed outward.
(D) increasing opportunity costs do not occur with PPF's.

1. Bob and Kitty both work eight hours a day. In one day, Bob can make 10 scones or 16 muffins, whereas Betty can make 18 scones or 18 muffins. Given this, which statement is correct? (A) Kitty has an absolute and comparative advantage producing muffins. (B) It is not beneficial for Kitty to trade with Bob. (C)Bob has a lower opportunity cost in producing muffins than Kitty. (D) Bob’s opportunity cost of one scone is 5/9 muffins.

複選題2. When the price of an apple is $5, the quantity demanded is 120 apples per month； when the price is $7, the quantity demanded is 100 apples per month. (A) The price elasticity of demand is elastic. (B) Using the midpoint method, the price elasticity of demand is about 0.3. (C)If the cross-price elasticity of demand between apples and oranges is 1.5, they are substitutes. (D) If the supply elasticity of apples is 0.1, then the apple sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

3. Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions (A) lower both U.S. net exports and U.S. net capital outflows. (B) lower U.S. net exports and raise U.S. net capital outflows. (C)raise both U.S. net exports and U.S. net capital outflows. (D) raise U.S. net exports and lower U.S. net capital outflows. 

4. The term crowding-out effect refers to (A) the reduction in aggregate supply that results when a monetary expansion causes the interest rate to decrease. (B). the reduction in aggregate demand that results when a monetary expansion causes the interest rate to decrease. (C)the reduction in aggregate demand that results when a fiscal expansion causes the interest rate to increase. (D) the reduction in aggregate demand that results when a decrease in government spending or an increase in taxes causes the interest rate to increase.

6. If your firm’s production function has constant returns to scale and you increase all your inputs by 60%, then your firm's output will (A) not change. (B) increase, but by less than 60% (C)increase by 60% (D) increase by more than 60%.

7. To decrease the money supply, the central bank can (A) decrease the discount rate. (B) decrease required reserve ratios. (C)purchase negotiable certificates of deposit (NCDs) issued by the Bank. (D) sell government securities in the open market.

8. Which of the following statements is correct? (A) Diseconomies of scale occur when a firm’s long-run average total costs fall as output increases. (B) If the total cost curve gets steeper as output increases, the firm is experiencing increasing marginal product. (C)When total revenue is less than total variable cost, a firm in a competitive market should expect new firms to enter the market. (D) When total revenue is less than total variable cost, a firm in a competitive market will shut down.

9. The following table shows the total output produced by the top six firms as well as the totalindustry output for each industry.Which industry has the highest concentration ratio?(A) Industry A.(B) Industry B.(C)Industry C.(D) Industry D.

10. In markets characterized by oligopoly, (A) the oligopolists earn the highest profit when they cooperate and behave like a monopolist. (B) collusive agreements will always prevail. (C)collective profits are always lower with cartel arrangements than they are without cartel arrangements. (D) pursuit of self-interest by profit-maximizing firms always maximizes collective profits in the market.

11. If the price level in the United State is 120, the price level is 110 in Taiwan, and the nominal exchange rate is NT$30 per dollar, what is the real exchange rate from the Taiwan’s perspective? (A) 18.3. (B) 25.7. (C)27.5. (D) 32.7.

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