8. Which following statement(s) is (are) correct? 

(i) A Giffen good is always an inferior good. 

(ii) A Giffen good is a good that its income effect is larger than its substitution effect.
(A) (i)
(B) (ii)
(C) (i) and (ii)
(D) None of the above is correct.

4. One key difference between an oligopoly market and a competitive market is that (A) oligopolistic firms are interdependent while competitive firms are not. (B) oligopolistic firms sell completely unrelated products while competitive firms do not. (C) oligopolistic firms sell their product at a price equal to marginal cost while competitive firms do not. (D) oligopolistic frms are price takers while competitive firms are not.

5. When advertising encourages customers to become more informed about all frms in the market, (A) demand curves for specifc brands in the market are likely to become less elastic. (B) each firm is likely to have less market power. (C) frms are able to foster stronger brand loyalty. (D) the market power of individual frms is strengthened.

6. David faces choices between Apple and Banana. He feels that having five apples and three bananas (5,3) is not different from having four apples and six bananas (4,6). Which following statement(s) is (are) possibly correct if Ethan's indifierent curves are downward-sloping? (i) Ethan feels (4, 4.8) is as good as (5, 3). (ii) Ethan feels (6, 2) is as good as (4, 6). (A) (i) (B) (ii) (C)(i) and (ii) (D) None of the above is correct. TS

7. John and Ethan both work eight hours a day. In one day, John can make 4 cakes or 8 ice cream, whereas Ethan can make 2 cakes or 5 ice cream. Given this, which statement(s) is (are) correct? (i) Ethan has a lower opportunity cost in producing ice cream than John. (ii) John has an absolute advantage in producing both goods. (iii) It is not beneficial for John to trade with Ethan. (A) (i) and (ii) (B) (i) and (ii) (C) (ii) and (ii) (D)(i),(ii), and (iii)

9. John, Ethan, and Mary decide to buy a bike together and share the ownership. There willingness to pay for each choice is in the following table They will choose the bike that all three agree to buy.Which following statement(s) is(are) correct? (i) The bike will be a publie good among them.(ii) If three people share the cost and all bikes have the same price, $1500, the choice that maximizes aggregate surplus will be chosen. (A) (i) (B) (ii) (C) (i) and (ii) (D) None of the above is correct.

10. Suppose Country A proposes to impose a tax on a good. One report from an economist argues that this tax will increase producers' before-tax total revenue and make the producers bear relatively more tax burden than consumers. Which following statement is correct for the good? (A) The price elasticity of demand is 1.8； the price elasticity of supply is 0.8. (B) The price elasticity of demand is O.9； the price elasticity of supply is 0.3. (C) The price elasticity of demand is 0.6； the price elasticity of supply is 1.4. (D) There is not enough information to answer the question.

11. In a certain economy, when income is $1000, consumer spending is $800, The value of the multiplier for this economy is 2.5. It follows that, when income is $1060, consurner spending is (A) $815. (B) $836. (C) $900. (D) $950. 

12. Which of the following is not a reason that paying eficiency wages may increase a frm's profit? (A) Efficiency wages increase worker health and therefore increase worker productivity. (B) Efficiency wages decrease worker turnover and therefore decrease hiring and training costs. (C) Efficiency wages decrease worker shirking and therefore increase worker productivity. (D) Eficiency wages are below the equilibrium wage rate but still attract high quality workers.

13. If the Federal Reserve accommodates an adverse supply shock, (A) infation expectations may rise which shifts the short-run Phillips curve shifts right. (B) infation expectations may rise which shifts the short-run Phillips curve shifts left. (C) infation expectations may fall which shifts the short-run Phillips curve shifts right. (D) infation expectations may fall which shifts the short-run Phillips curve shifts left.

14. If a local bank decides to convert some of its U.S. Treasury securities into cash, which it will hold in its vault, what impact will this have on the bank's balance sheet? (A) Reserves would increase, liabilities would stay the same, and owner's equity would decrease. (B) Reserves would increase, lhabilities would stay the same, and owner's equity would increase. (C) Reserves would decrease, liabilities would decrease, and owner's equity would decrease. (D) Reserves would decrease, liabilities would stay the same, and owner's equity would decrease.