lOMoARcPSD|46958826 lOMoARcPSD|46958826 HANOI UNIVERSITY
FACULTY OF MANAGEMENT AND TOURISM MICROECONOMICS TUTORIAL EXERCISES Semester: Fall 2021 lOMoARcPSD|46958826 Contents T UTORIAL 1: INTRODUCTION
.................................................... . . . . . . . . . . . . . . . . . . . . . . . .3 T
UTORIAL 2: THE MARKET FORCES, SUPPLY AND DEMAND . . . . . . . . . . . . . . . . . .1 1 T UTORIAL 3: ELASTICITY
............................................................................... . . .1 8 T
UTORIAL 4: CONSUMERS, PRODUCERS & MARKET EFFICIENCY ....... . .2 5 T UTORIAL 5
................................................................................................. . . . . . . . . . .3 5 T
UTORIAL 6: THE THEORY OF CONSUMER CHOICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 3 T
UTORIAL 7: COST OF PRODUCTION
........................................................... . . .5 0 T
UTORIAL 8: FIRMS IN COMPETITIVE MARKET
........................... . . . . . . . . . . . . . . .5 6 T UTORIAL 9: MONOPOLY
................................................................ . . . . . . . . . . . . . . . . . .6 4 T
UTORIAL 10&11: MONOPOLISTIC COMPETITION & OLIGOPOLY .. . . . . . . .7 3 T
UTORIAL 12: THE MARKET FAILURES
.......................................... . . . . . . . . . . . . . . .8 4 lOMoARcPSD|46958826 TUTORIAL 1: INTRODUCTION
10 Principles of economics and thinking like an economist
Coverage: Chapter 1 & Chapter 2 Multiple Choice
Identify the choice that best completes the statement or answers the question. 0 Economics is the study of 0 production methods. I
how society manages its scarce resources.
II how households decide who performs which tasks.
III the interaction of business and government.
I A typical society strives to get the most it can from its scarce resources. At the same time, the society
attempts to distribute the benefits of those resources to the members of the society in a fair manner.
In other words, the society faces a tradeoff between 0 guns and butter. I efficiency and equality. II inflation and unemployment. III work and leisure.
0 High-school athletes who skip college to become professional athletes
0.0 obviously do not understand the value of a college education.
0.1 usually do so because they cannot get into college.
0.2 understand that the opportunity cost of attending college is very high.
0.3 are not making a rational decision since the marginal benefits of college outweigh
the marginal costs of college for high-school athletes.
1 A construction company has built 50 houses so far this year at a total cost to the company of $8 million.
If the company builds a 51st house, its total cost will increase to $8.18 million. Which of the following statements is correct?
1.0 For the first 50 houses, the average cost per house was $160,000.
1.1 The marginal cost of the 51st house, if it is built, will be $180,000.
1.2 If the company can experience a marginal benefit of $190,000 by building the 51st
house, then the company should build it.
1.3 All of the above are correct.
2 The principle that trade can make everyone better off applies to 2.0 individuals. 2.1 families. 2.2 countries. 2.3 All of the above
3 An example of an externality is the impact of
3.0 bad weather on the income of farmers.
3.1 the personal income tax on a person's ability to purchase goods and services.
3.2 pollution from a factory on the health of people in the vicinity of the factory.
3.3 increases in health care costs on the health of individuals in society. lOMoARcPSD|46958826
0 Which of these activities will most likely result in an external benefit?
0.0 A college student buys a deck of cards to play solitaire in her dorm room.
0.1 An elderly woman plants a flower garden on the vacant lot next to her house.
0.2 An executive purchases a book to read on a business trip.
0.3 A ten-year-old uses his allowance to buy new Nike shoes.
1 Which of the following is the most correct statement about the relationship between inflation and unemployment?
1.0 In the short run, falling inflation is associated with falling unemployment.
1.1 In the short run, falling inflation is associated with rising unemployment.
1.2 In the long run, falling inflation is associated with falling unemployment.
1.3 In the long run, falling inflation is associated with rising unemployment.
2 Which of the following statements is (are) correct?
2.0 Relative to other scientists, economists find it more difficult to generate useful data.
2.1 Theory and observation are important in economics as well as in other sciences.
2.2 To obtain data, economists often rely upon the natural experiments offered by history.
2.3 All of the above are correct.
3 Just like models constructed in other areas of science, economic models
3.0 incorporate assumptions that contradict reality.
3.1 incorporate all details of the real world. 3.2 complicate reality.
3.3 avoid the use of diagrams and equations.
4 Which of these statements about economic models is correct?
4.0 For economists, economic models provide insights about the world.
4.1 Economic models are built with assumptions.
4.2 Economic models are often composed of equations and diagrams.
4.3 All of the above are correct.
5 Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?
5.0 a landowner leases land to a farmer
5.1 a farmer hires a teenager to help with harvest
5.2 a retired farmer sells his combine to a new farmer
5.3 a woman buys corn for dinner
6 The following table contains some production possibilities for an economy for a given month. Sweaters Gloves 0 300 5888 ? 300-x < x-100 8 100
If the production possibilities frontier is bowed outward, then “?” could be 23 100. 24 150. 25 200. 26 250. lOMoARcPSD|46958826 Figure 2-6 barrels 45 40 35 A 30 D 25 C 20 B 15 23 F 10 5 2 4 6 8 10 12 14 16 bathtubs 23 Refer to Figure 2-6 23 23 A, B 24 A,B,D 25 A,B,C,F,G 26 C,F,G 24 Refer to Figure 2-6 23 A, B 24 C,D,F,G 25 C,F,G 26 D produce at which r point(s)? 24 Inefficient production is Figure 2-9 Panel (a) Panel (b) televisions televisions 13 13 Q 12 12 11 11 U 10 10 9 9 8 8 7 7 S 6 6 R 5 5 4 4 3 3 2 2 1 1 T 1 2 3 4 5 6 radios 1 2 3 4 5 6 7 8 9 10 radios lOMoARcPSD|46958826
23 Refer to Figure 2-9, Panel (a). The opportunity cost of one television is highest when the economy produces 23 0 televisions. 24 6 televisions. 25 10 televisions. 26 12 televisions. 24 Positive statements are 23 prescriptive.
24 claims about how the world should be.
25 claims about how the world is.
26 made by economists speaking as policy advisers.
25 Which of the following is an example of a positive, as opposed to normative, statement?
23 Income tax rates should not have been cut as they were a few years ago.
24 The quantity of money has grown too slowly in recent years.
25 When the quantity of money grows rapidly, inflation is a predictable consequence.
26 All of the above are positive statements. Figure 2-13 price of a dozen roses 40 35 30 25 A C 20 B 15 10 5 1 2 3 4 5 6 7 8 9 10 dozens of roses
23 Refer to Figure 2-13. The movement from point A to point B is a(n) 23 shift of the demand curve.
24 indication of a change in preferences for roses.
25 movement along the demand curve.
26 indication of an increase in income.
24 Refer to Figure 2-13. The movement from point B to point C could have been caused by 23 inflation. 24 a change in income.
25 a change in the price of roses.
26 a change in the cost of producing roses. lOMoARcPSD|46958826 23
There is one mistake in each of the following sentences. Find and correct them 23
Economics is the study of how society allocates its unlimited Scarce resources. 24
If wages for accountants rose, then accountants’ leisure time would have a lower Higher opportunity cost. 25
A rational decisionmaker takes an action if and only if the marginal cost exceeds Is less than the marginal benefit 23
Efficiency Equality means everyone in the economy should receive an equal share of
the goods and services produced. 24
The government can potentially improve market outcomes if market inequalities
or market equilibrium Market failure exists 25
Economic models include Omit many details to allow us to see what is truly important. 26
In the circular-flow diagram, firms own Buy the factors of production and use them to produce goods and services. lOMoARcPSD|46958826 Figure 2-14 23
Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry,
it produces 35 dishwashers and 75 doghouses. 0 doghouse. 24
Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 5 dishwashers. 10 diswaher 25
Refer to Figure 2-14. The opportunity cost of an additional doghouse decreases
Increases as more doghouses are produced. III. Short Answer 23
23 The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that
cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered
that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150
each. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.
Draw a rancher’s production possibilities frontier showing increasing opportunity cost of cattle
production in terms of prairie dog production. Using a separate graph for each situation, show what would
happen to the initial production possibilities frontier in each of the following situations:
23 The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs. lOMoARcPSD|46958826
23 As a protest against the government introducing the gray wolf back into the wild in their
state, ranchers decide to withhold 25 percent of the available grassland for grazing.
23 The price of prairie dogs increases to $200 each, so ranchers decide to allot
additional land for prairie dogs. lOMoARcPSD|46958826 0
The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing.
23 A drought destroys most of the available grass for grazing of cattle, but not for
prairie dogs since they also eat plant roots. lOMoARcPSD|46958826
0 Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes. 0
On the graph, identify the area of feasible outcomes and the area of infeasible outcomes. 1
On the graph, label a point that is efficient and a point that is inefficient. 2
On the graph, illustrate the effect of the discovery of a new vein of iron ore, a
resource needed to make both horseshoes and hammers, on this economy. 3
On a second graph, illustrate the effect of a new computerized assembly line in
the production of hammers on this economy.
3. Identify each of the following topics as being part of microeconomics or macroeconomics: lOMoARcPSD|46958826
0 MIC the impact of a change in consumer income on the purchase of luxury automobiles
1 MIC the effect of a change in the price of Coke on the purchase of Pepsi
2 MAC the impact of a war in the Middle East on the rate of inflation in the United States
3 MAC factors influencing the rate of economic growth
4 MIC factors influencing the demand for tractors
5 MAC the impact of tax policy on national saving
6 MIC the effect of pollution taxes on the U.S. copper industry
7 MIC the degree of competition in the cable television industry
8 MAC the effect of a balanced-budget amendment on economic stability
9 MIC the impact of deregulation on the savings and loan industry lOMoARcPSD|46958826
23 Use the following graph to answer the following questions.
23 How would point J be represented as an ordered pair? (20;24) 24 What type of curve is this? Demand curve
25 Does this curve show a positive or negative correlation between price and quantity? Negative
26 Compute the slope of D1 between points J and L. 0.4 (-8/20) dental Y/ dental X
27 What is the slope of D1 between points L and N? Why would you not have to calculate this answer?
0.4 (ko phải tính vì nó giống y hệt con d)
28 What is it called if we move from D1 to
D2? Shift or An increase in demand
29 How do you know that the slope of D2 is the same as the slope of
D1? Because the 2 lines are parallel price 40 36 32 28 J K 24 20 L M 16 12 N 8 4 D1D2
10 20 30 40 50 60 70 80 quantity lOMoARcPSD|46958826 TUTORIAL 2:
THE MARKET FORCES, SUPPLYAND DEMAND
Coverage: Chapter 4 23 Multiple Choice
Identify the choice that best completes the statement or answers the question.
1.In a competitive market, the quantity of a product produced and the price of the product are determined by 23 a single buyer. 24 a single seller.
25 one buyer and one seller working together. 26 all buyers and all sellers.
23 Which of the following is not a characteristic of a perfectly competitive market?
23 Different sellers sell identical products. 24 There are many sellers.
25 Sellers must accept the price the market determines.
26 All of the above are characteristics of a perfectly competitive market.
24 Which of the following is not a characteristic of a perfectly competitive market?
23 Sellers set the price of the product. 24 There are many sellers.
25 Buyers must accept the price the market determines.
26 All of the above are characteristics of a perfectly competitive market.
25The law of demand states that, other things equal,
23 when the price of a good falls, the demand for the good rises.
24 when the price of a good rises, the quantity demanded of the good rises.
25 when the price of a good rises, the demand for the good falls.
26 when the price of a good falls, the quantity demanded of the good rises. Table 4-1 Price Aaron’s Angela’s Austin’s Alyssa’s Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded $0.00 20 16 4 8 $0.50 18 12 6 6 $1.00 14 10 2 5 $1.50 12 8 0 4 $2.00 6 6 0 2 $2.50 0 4 0 0
23 Refer to Table 4-1. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is 23 0 units. 24 3.5 units. 25 6 units. 26 14 units. Table 4-2 Price Audrey’s Bob’s Chuck’s Dottie’s Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded $12 2 1 3 4 $10 4 4 4 5 lOMoARcPSD|46958826 $8 6 7 5 6 $6 8 8 4 7 $4 10 9 3 8 $2 12 10 2 9
23Refer to Table 4-2. Whose demand does not obey the law of demand? 23 Audrey’s 24 Bob’s 25 Chuck’s 26 Dottie’s
7. Which of the following events would cause a movement upward and to the left along the demand curve for olives? 5888
The number of buyers of olives decreases. 5889
Consumer income decreases, and olives are a normal good. 5890
The price of pickles decreases, and pickles are a substitute for olives. 5891 The price of olives rises. 5888
You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has
been wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result, 5888
your demand for peanut butter will increase, but not until the end of the year. 5889
your demand for peanut butter increases today. 5890
your demand for peanut butter decreases as you look for a substitute good. 5891
your demand for peanut butter shifts left today. Figure 4-2 price P A P' B D quantity Q Q' lOMoARcPSD|46958826
0 Refer to Figure 4-2. The movement from point A to point B on the graph shows 0 a decrease in demand. 1 an increase in demand. 2
a decrease in quantity demanded. 3
an increase in quantity demanded. Figure 4-4 Panel (a) Panel (b) p r ice price P' 0 D D' D Q'Q quantity quantity
10. Refer to Figure 4-4. The graphs show the demand for cigarettes. In Panel (b), the arrows are consistent
with which of the following events?
a. The price of cigarettes increased. Movement
b. A tax was placed on cigarettes. Movement
c. The prohibition of cigarette advertisements on television. Shift. (Advertising đó) 0
Tobacco and marijuana are complements and the price of marijuana decreased.
0 A movement downward and to the left along a supply curve is called 0 an increase in supply. 1 a decrease in supply.
2 a decrease in quantity supplied.
3 an increase in quantity supplied.
1 An increase in the price of oranges would lead to
0 an increased supply of oranges.
1 a reduction in the prices of inputs used in orange production.
2 an increased demand for oranges.
3 a movement up and to the right along the supply curve for oranges.
2 What will happen in the rice market now if sellers expect higher rice prices in the near future?
0 The supply of rice will increase.
1 The supply of rice will decrease.
2 The supply of rice will be unaffected.
3 The demand for rice will decrease. lOMoARcPSD|46958826
0 In a given market, how are the equilibrium price and the market-clearing price related? 0 There is no relationship. 1 They are the same price. 2
The market-clearing price exceeds the equilibrium price. 3
The equilibrium price exceeds the market-clearing price.
1 If there is a shortage of farm laborers, we would expect 0
the wage of farm laborers to increase. 1
the wage of farm laborers to decrease. 2
the price of farm commodities to decrease. 3
a decrease in the demand for substitutes for farm labor. Table 4-7
The demand schedule below pertains to sandwiches demanded per week. Price Charlie’s Maxine’s Quinn’s Quantity Quantity Quantity Demanded Demanded Demanded $3 3 4 3 $5 1 2 x
0 Refer to Table 4-7. Suppose Charlie, Maxine, and Quinn are the only demanders of sandwiches. Also suppose the following: Ȁ Ā
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⸀ ᜀĀᜀĀᜀĀᜀĀᜀĀᜀĀᜀĀ0 Nhìn vào đề bài
và cái bảng có thể thấy rằng market supplied chỉ có 4 trong khi đó Quantity demanded của cả
3 người cộng vào (3+4+4=10) lên tới 10 thiếu 6 san guých Ȁ Ā
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⸀ ᜀĀᜀĀᜀĀᜀĀᜀĀᜀĀᜀĀ1 Tại sao giá vẫn là $5??? ЀĀȀ Ā
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ĀᜀĀᜀĀЀĀȀ⸀ĀᜀĀᜀĀᜀĀᜀĀᜀ0 x = 2 ЀĀȀ Ā
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ĀᜀĀᜀĀЀĀȀ⸀ĀᜀĀᜀĀᜀĀᜀĀᜀ1 the current price of a sandwich is $3.00 ЀĀȀ Ā
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ĀᜀĀᜀĀЀĀȀ⸀ĀᜀĀᜀĀᜀĀᜀĀᜀ2 the market quantity supplied of sandwiches is 4 ЀĀȀ Ā
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ĀᜀĀᜀĀЀĀȀ⸀ĀᜀĀᜀĀᜀĀᜀĀᜀ3 the slope of the supply curve is 2 Then 0
there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is less than $3.00. 1
there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00. 2
there is currently a surplus of 6 sandwiches and the equilibrium price of a sandwich is less than $3.00. 3
there is currently a surplus of 6 sandwiches and the equilibrium price of a sandwich is $5.00. lOMoARcPSD|46958826 Figure 4-11 price 20 S 18 16 14 12 10 8 6 4 2 D 1 2 3 4 5 6 7 8 9 10 quantity
17. Refer to Figure 4-11. At a price of $4, which of the following is correct?
Vì demand hẳn 8 mà supply có 2 thôi 0 there is a surplus of 3 units 1 there is a surplus of 6 units 2 there is a shortage of 3 units 3 there is a shortage of 6 units Figure 4-13
The diagram below pertains to the supply of paper in university markets. price SA y SB x Quantity
23 Refer to Figure 4-13. All else equal, the return of college students to campus in the fall would cause a move a. from x to y.