18. Consider a perfectly competitive market where all firms have constant and equal average cost (a constant cost industry). How will an increase in demand affect the long run equilibrium price on such a market?
(A) Price will increase
(B) The price will remain constant
(C) The price will decrease
(D) Unclear

1. What does UK GDP per capita measure? (A) the total output of London’s economy (B) the average disposable income of a UK resident (C) the total output of the UK citizens, divided by the number of the citizens (D) the total output of the UK’s economy, divided by the country’s population

2. The local grocery store offers a discount of 20% if a customer pays the 10 USD monthly fee. How much should a customer’s monthly spending in this store be so that paying this fee makes sense for her? (A) At least 10 USD (B) At least 30 USD (C) At least 50 USD (D) At least 60 USD

3. Currently you work for 40 hours per week at the wage rate of $20 an hour. Your free hours are defined as the number of hours not spent in work per week, which in this case is 24 hours × 7 days − 40 hours = 128 hours per week. Suppose now that your wage rate has increased by 25%. If you are happy to keep your total weekly income constant, then: (A) Your total number of working hours per week will fall by 25%. (B) Your total number of working hours per week will be 30 hours. (C) Your total number of free hours per week will increase by 25%. (D) Your total number of free hours per week will increase by 6.25%

4. Countries A, B and C produce only watermelons (X) and grapefruits (Y). The production possibility frontiers are given by: XA + YA = 100, 2XB +3YB = 300, XC +2YC = 600. What is the maximum amount of watermelons that they can produce together if they want to produce at least 200 grapefruits? (A) 200 (B) 500 (C) 600 (D) None of the above

5. Four farmers are deciding whether to contribute to the maintenance of an irrigation project. For each farmer, the cost of contributing to the project is $10. But when any one farmer contributes, all four of them will benefit from an increase in their crop yields, in particular each gains additional $8. Which of the following statements is correct? (A) If all the farmers are selfish, none of them will contribute. (B) There are multiple Nash equilibria in this game. (C) If Kim is altruistic and contributes $10, the others might contribute too, even if they are selfish. (D) If the farmers have to reconsider this decision every year and consider infinite horizon of planning, they will never choose to contribute to the project if they are selfish.

6. GDP of the country X grows by 1% per year every year. GDP of the country Y grows by 2% per year every year. If in the year 2019 countries have equal GDP, by what year will their GDP differ by two times? (Choose the nearest estimate). (A) 2050 (B) 2090 (C) 2150 (D) 2180

7. Which of the following statements about the outcome of an economic interaction is correct? (A) If the allocation is Pareto efficient, then you cannot make anyone better off without making someone else worse off. (B) All participants are happy with what they get if the allocation is Pareto efficient. (C) There cannot be more than one Pareto-efficient outcome. (D) Pareto-efficient outcome is always fair.

8. Jane spends all her money on the ingredients of her favorite cocktail. To make a portion of the cocktail, she has to mix 200 ml of orange juice with 100 ml of apple juice and with 200 ml of water. Any juice costs 3 USD per liter, water costs 0.5 USD per liter. If she has 20 USD, how many portions of the cocktail can she make? (A) 10 (B) 12 (C) 20 (D) None of the above

9. Maria earns $12 per hour in her current job and works 35 hours a week. Her disutility of effort is equivalent to a cost of $2 per hour of work. If she loses her job, she will receive unemployment benefit equivalent to $6 per hour. Additionally, being unemployed has psychological and social costs equivalent to $1 per hour. Then: (A) The employment rent per hour is $3. (B) Maria’s reservation wage is $6 per hour. (C) If she is offered a job with the wage $11 and disutility of $0,5, she will refuse. (D) If she is offered a job with the wage $14 and disutility of $3, she will take it.

10. Which of the following statements best describes the concept of commitment device? (A) A student announces through social media that he will contribute to charity every time he gets a grade lower than B− and publish the receipts online. (B) A country leader announces the new policy of fighting corruption through increased fines for corrupt officials. (C) An investor buys treasury bonds. (D) The price of ice-creams increases after a surge in demand.

無年度 - 台灣經濟學奧林匹亞模擬試題範例#93359