Seçmeli Ara Sınav - Introduction to Economics 1

Soru 1:

Which of the following is true?

A) Cross-price elasticity of demand is positive for complement goods B) Cross-price elasticity of demand is greater than zero for complement goods C) Cross-price elasticity of demand is smaller than zero for substitute goods D) Cross-price elasticity of demand is negative for substitute goods E) Cross-price elasticity of demand is positive for substitute goods

Soru 2:

I. A firm is willing to increase the production of a good when the marginal cost becomes higher than the market price of this good. II. Developments in technology lead to a decrease in the supply of goods by causing an increase in the cost of production. III. Supply is the willingness and the ability of producers to produce a quantity of a good or a service at a given price in a given time period. IV. The Law of Supply states that, under the assumption of ceteris paribus, an increase in the price of a product causes an increase in the quantity supplied. Which of the above statements is true regarding ‘supply’?

A) I and III B) I and IV C) II and III D) II and IV E) III and IV

Soru 3:

Which of the followings is within the scope of tax incedence?

A) Who pays the tax B) How much tax is paid C) The effect of taxation on the markets D) Why taxation causes elasticity E) What the tax is for

Soru 4:

When the demand is elastic (If we are on the elastic portion of demand curve), what would be the effect of a price increase or price hike on the total revenue from the sales?

A) An increase in price causes total revenue to decrease, B) An increase in price causes total revenue to increase, C) An increase in price does not cause total revenue to change, D) An increase in price causes total revenue to decrease for normal goods but increases for Veblen goods, E) An increase in price causes total revenue to decrease for Giffen goods but increase for normal goods.

Soru 5:

Which of the following defines the type of a market where there are many buyers and sellers so that the effect of each one on market price is negligible?

A) Oligopoly B) Perfect Competition C) Monopoly D) Monopsony E) Monopolistic competition

Soru 6:

I. A potato chip factory owner who buys wholesale potatoes from the farmers who grow the potato. II. A car company which sells car in a town in which there are other car companies. III. A spice factory owner who buys wholesale cummin from the farmers who grow the cummin. IV. A toy shop owner who sells toys in a city in which there are many other toy shops. Which of the markets described above are imperfectly competitive monopsony markets?

A) I and II B) I and III C) II and IV D) III and IV E) I and IV

Soru 7:

The difference between the maximum amount a person is willing to pay for a good and the market price is called:

A) Income elasticity of demand. B) Price ceiling. C) Dead-weight loss. D) Consumer surplus. E) Tax incidence.

Soru 8:

I. Fake brand cheese II. Lor cheese III. White bread IV. Cinema tickets Which of the above are examples of inferior goods?

A) I and II B) III and IV C) I, II and III D) I, II and IV E) II, III and IV

Soru 9:

Which of the following is not listed as a required characteristics for a market to be called competitive market?

A) The good or service being exchanged is the same across all sellers; the quality or the characteristics of it do not change from one seller to another B) There is a high number of potential buyers and sellers of this good; and all act independently from each othe C) Entry of new sellers into the market is not restricted by any means D) Buyers and sellers readily and freely have access to information with regards to the prices at which other buyers and sellers are exchanging the good. E) It is a market where there is only one seller of the product and this seller sets the price alone.

Soru 10:

Given the price and quantity for two points on the demand curve at the table below, calculate the price elasticity of demand using mid-point method. Which of the below is the closest value to the price elasticity you have calculated?

A) -0.666667 B) 4.76 C) -1 D) -2.25 E) -0.66667

Soru 11:

I. The tax reduces the market size by reducing the equilibrium quantity. II. The tax imposed on goods and services causes the price the buyers pay to increase. III. The governments usually tend to levy the taxes on buyers, not sellers. Which of the statements above is true in terms of ‘the effects of taxation on market outcomes’?

A) Only I B) Only II C) Only III D) I and II E) II and III

Soru 12:

Assume that the coffee market consists of three individuals. Let’s call them A, B and C. Consider the case in which the price of coffee P T is 5 TL per cup. Individual A’s quantity demanded is 3 cups, individual B’s quantity demanded is 2 cup, and individual C’s quantity demanded is 4 cups. Which of the following gives the quantity demanded for P T = 5 TL?

A) 2 B) 3 C) 5 D) 7 E) 9

Soru 13:

Which of the following interpretations is true when price elasticity of demand is equal to -4?

A) An increase in price by 25 percent will cause an increase in demand by 100 percent. B) A decrease in price by 25 percent will cause an increase in demand by 100 percent. C) A decrease in price by 10 percent will cause an increase in demand by 2.5 percent. D) A decrease in price by 40 percent will cause an increase in demand by 10 percent. E) A decrease in price by 100 percent will cause a decrease in demand by 25 percent.

Soru 14:

Which of the basic assumptions liste below is not one the economists make about the nature of the consumer’s tastes or preferences?

A) The preferences are complete. B) Negatively sloped budget constraint. C) Consumer’s preferences are transitive. D) Consumers always prefer more of a commodity to less. E) A diminishing marginal rate of substitution

Soru 15:

Which of the following refers to the situation when the marginal utility derived from consuming successive units of a product will eventually decline as the rate of consumption increases?

A) Completeness of preferences. B) The law of diminishing marginal utility. C) Limited income necessitates choice. D) A diminishing marginal rate of substitution. E) Consumer’s preferences are transitive.

Soru 16:

Which of the following statements is true in terms of ‘the price elasticity of supply’?

A) The price elasticity of supply is a measure of the response of quantity supplied of a good to a change in price. B) The price elasticity of supply is computed as the percentage change in price divided by the percentage change in quantity supplied. C) An increase in the price of a good causes the quantity supplied by the sellers to decrease, as there is a negative relationship. D) It can be claimed that if the price elasticity of supply takes the value between 0 and 1, the good has elastic supply. E) If the price elasticity of supply is greater, the sellers cannot easily change the quantity they produce due to unavailability of inputs.

Soru 17:

How the use of mid-point approach of price elastic of demand differs from the standard way to compute price elasticity of demand?

A) It is calculated as the percentage change in the quantity demanded of the good divided by the percentage of change in the price of that good. B) The mid-point method calculates the percentage change by dividing the change by the average of the initial and final levels of price and quantities. C) It is calculated as the change in the quantity demanded of the good divided by the change in the price of that good D) The mid-point method calculates the percentage change by dividing the change by the maximum of the initial and final levels of price and quantities. E) The mid-point method calculates the percentage change by dividing the change by the minimum of the initial and final levels of price and quantities.

Soru 18:

Which of the following is true regarding the effects of taxation on the market?

A) When the government levies a tax on buyers, the tax causes the shift of the demand curve up right. B) When a tax is levied on sellers causes the shift of the supply curve down right. C) A tax levied on sellers always means that the buyers are not affected by the tax. D) A tax levied on buyers always means that the sellers are not affected by the tax. E) The tax reduces the market size by reducing the equilibrium quantity.

Soru 19:

What is the term used for the measures of the responsiveness of demand to changes in price is called?

A) income elasticity of demand B) cross-price elasticity of demand C) the law of demand D) the price elasticity of demand E) price elasticity of supply

Soru 20:

What is the trade-off between inflation and unemployment?

A) Opportunity cost B) Phillips curve C) Taylor rule D) Inflation rate E) Externality