MICROECONOMICS

1. Which of the following is true in market for goods and services'?

(a) firms sell labor to households
(b) households sell capital to firms
(c) firms sell goods and services to households
(d) households sell goods and services to firms
2. What is a shortage?
(a) There are too many goods but not enough buyers in the market
(b) There are too many buyers but not enough goods in the market
(c) There are too many sellers and too many goods in the market
(d) When goods cannot be sold
3. For normal goods, when price of a good falls,
(a) demand increases
(b) demand decreases
(c) supply increases
(d) supply remains the same
4. It an increase in the price of blue jeans leads to a decrease in the demand
for 1-shirts, then blue jeans and T-shirts are
(a) complements
(b) inferior goods
(c) luxury goods
(d) substitutes
5. Which of the following points in the following production possibilities
frontier graph is feasible and efficient? ( khả thi và hiệu quả)
(a) A
(b) B
(c) C
(d) C and D
6. What does the law of supply say?
(a) When prices go down, sellers want to sell more
(b) When prices go up, sellers want to sell more
(c) When prices go down, buyers want to buy more
(d) Prices do not affect how much sellers produce
7. Suppose that at a price of 30,000 VND per ticket, there are 30,000 visitors
to the amusement park in Da Nang. If the park raises its price to 40,000
VND per ticket, the number of visitors will fall to 20,000. Using the
midpoint method for calculating the elasticity, the price elasticity of demand
for the amusement park is
(a) 1.4
(b) 0.66
(c) 0.75
(d) 1.0
8. Supposed soya milk is considered substitute for cow milk. An increase in
cow milk price will lead to
(a) an increase in demand of cow milk
(b) an increase in demand of soya milk
(c) a decrease in cow milk supply
(d) no affect to cow milk demand
9. Which of the following creates movement along the supply curve for
electronic vehicles (EVs)?
(a) an advance in the technology used for manufacturing Evs
(b) a decrease in price of Evs
(c) a decrease price of raw material for manufacturing Evs
(d) an increase in labor wages for manufacturing EVs
10. Which of the following is an example of a price floor?
(a) setting the minimum wage to 5 mil VND per month
(b) setting the rent controls to no more than 10 mil VND per month
(c) restricting petrol prices to 20,000 VND per liter when the equilibrium price
is 23,000 VND per liter
(d) A and B.
11. Which of the following price elasticity of demand value indicates "unit
elastic demand?
(a) price elasticity of demand < 1 (Inelastic demand)
(b) price elasticity of demand> 1( Elastic demand)
(c) price elasticity of demand = 1
(d) price elasticity of demand 0 (Perfecty inelastic demand)
12. Country I can produce cars using fewer inputs and resources than
Country & goes. Coentry has in producing cars.
(a) An absolute advantage
(b) A comparative advantage
(c) A special advantage
(d) No advantage
13. In the following chart, which of the following price level setting will be
binding?
(a) Price celling of 4$
(b) Price floor of 4$
(c) Price floor of 2$
(d) Price floor of O$
14. If price and quantity demanded of Bluetooth headsets are 6$ and 45
units; and 10$ and 30 units respectively, the elasticity of Bluetooth headsets
((Ed() is
(a) 1.25
(b) 1.00
(c) 0.80
(d) 0
15. In country A, there are many buyers and many sellers in soft drink
market. Each has a negligible or no impact on market price. This market
structure is considered as
(a) a monopoly
(b) a perfect competition
(c) an oligopoly
(d) a monopolistic competition

16. Which of the following is true in 'market for factors of production"?

(e) firms sell capital to households
(f) firms sell goods and services to households
(g) households sell goods and services to firms
(h) households sell labor to firms
17. What is a surplus?
(e) There are too many goods but not enough buyers in the market
(f) There are too many buyers and not enough goods in the market
(g) There are not many sellers and not enough goods in the market
(h) When goods are not available in the market
18. Any point inside of the production possibilities frontier curve is
(a) feasible and efficient
(b) feasible but inefficient
(c) not feasible but efficient
(d) not feasible at all
19. The law of demand states that an increase in the price of a good,
(a) increases the supply of that good.
(b) decreases the quantity demanded for that good.
(c) decreases the demand for that good.
(d) increases the quantity supplied of that good.

20. Which of the following creates movement along the supply curve for
electronic vehicles (EVs)?
(a) an advance in the technology used for manufacturing Evs
(b) an increme in the price of EVs
(c) on increase in the price of raw materials for manufacturing EVs
(d) an increase in camber of EV manufacturers
21. Supposed soya milk is considered substitute for cow milk. A decrease in
cow milk price will lead to
(e) a decrease in demand of soya milk
(1) a decrease in demand of cow milk
(g) a decrease in cow milk supply
(h) an increase in demand of soya milk
22. Which of the following price elasticity of demand value indicates "unit
elastic demand?
(e) price elasticity of demand =1
(f) price elasticity of demand < 1
(g) price elasticity of demand> 1
(h) price elasticity of demand = 0
23. If an increase in the price of blue jeans leads to a decrease in the
demand for T-shirt, then blue jeans and T-shirt are
(e) inferior goods
(f) luxury goods
(g) complements
(h) substitutes
24. Which of the following points in the following production possibilities
frontier graph is feasible and efficient?
(e) A
(f) B
(g) C
(h) B and D
25. Suppose that at a price of 20,000 VND per ticket, there are 30,000
visitors to an exhibition in Da Nang. If the exhibition organizer raises its
price to 30,000 VND per ticket, the number of visitors will fall to 25,000.
Using the midpoint method for calculating the elasticity, the price elasticity
of demand for the exhibition is
(e) 0
(f) 0.45
(g) 2.2
(h) 1.0
26. Which of the following is an example of a price ceiling?
(e) setting the rent controls to no more than 20 mil VND per month
(f) setting the minimum wage to 5 mil VND per month
(g) setting buying price of rice from farmers to 20,000 VND per kg when the
equilibrium price is 15,000 VND per kg
(h) B and C.
27. Country J can produce cars using fewer inputs and resources than
Country P. Country Jhas in producing cars.
(e) An absolute advantage
(f) A comparative advantage
(g) A special advantage
(h) No advantage
28. In the following chart, which of the following price level imposing will
be binding?
(e) Price celling of 4$
(f) Price floor of 2$
(g) Price ceiling of 25
(h) Price floor of OS
29. Price and quantity demanded of phone Bluetooth headsets are 55 and 60
units; and 8$ and 50 units, the elasticity of phone Bluetooth headsets (Ed) is
(e) 0
(f) 0.39
(g) 1.00
(h) 2.53
30. In country E, market for railway transportation is dominated by one
public company. This market is best described as
(a) a monopolistic competition
(b) a monopoly
(c) an oligopoly
(d) a perfect competition

Short Questions:
1.opportunity cost. Example.
- Opportunity cost is the value of the next best alternative that
is forgone when a decision is made to pursue one option over
another.
Ex: If you decide to spend $20 on a movie ticket instead of saving that money,
the opportunity cost is what you could have done with that $20, such as saving it
for a future purchase or spending it on a meal.

2. supply curve; Relationship between price and quantity supplied

- The supply curve represents the relationship between the price of a good or
service and the quantity supplied by producers.
- The supply value of the good will be proportional to the price. When the price
is high, the supply will be large and vice versa, when the price is low, the supply
will also decrease

3. Market for factors of production; buyers and sellers

-In the market for factors of production, buyers and sellers interact to exchange
resources used in the production of goods and services.

4. Monopoly market; example.

-A monopoly market is where one seller controls the entire supply of a product.
Ex: Vinamilk is a Vietnamese dairy company
5. The relationship between income and demand for inferior goods.
as income rises, demand decreases, and as income falls, demand increases.

6. surplus in the market, example

- A surplus occurs when supply exceeds demand at a certain price
Ex: Unsold winter clothing after the season ends.

7. price ceiling; example.

- A price ceiling is a maximum price set by the government.
Ex: rent controls that sets a limit on how much landlords can charge for rent.

8. elastic demand, example,

- Elastic demand occurs when the quantity demanded changes significantly in
response to a price change.
Ex: luxury goods, where a small increase in price can lead to a large drop in
demand.

9. Equilibrium point, equilibrium price, equilibrium quantity

-The equilibrium point is where the supply and demand curves intersect.
-Equilibrium price is the price at which the quantity demanded equals the
quantity supplied.
-Equilibrium quantity is the amount of goods or services bought and sold at the
equilibrium price.
10. Demand curve; relationship between price and quantity demanded
-The demand curve shows an inverse relationship between price and quantity
demanded: as price falls, demand increases, and as price rises, demand
decreases.
11. market for goods and services. buyers and sellers
- The market for goods and services is where buyers and sellers interact to
exchange products.

12. perfectly competitive market, example.

A perfectly competitive market has many buyers and sellers offering identical
products
Ex: the agricultural market for products like wheat or corn

13. the relationship between income and demand of inferior goods

-As income increases, demand for inferior goods decreases, and vice versa.

14. shortage in the market

- A shortage occurs when demand exceeds supply at a given price. This typically
happens when the price is set below the equilibrium price.

15. price floor; an example.

- A price floor is a minimum price set by the government, preventing prices from
falling below a certain level.
Ex: the government sets the lowest legal wage employers can pay workers.
16. inelastic demand; example.
-Inelastic demand occurs when the quantity demanded changes
little despite a price change.
Ex: insulin for diabetics, where demand remains relatively
constant even if the price increases.
17. supply curve shift left or right; Why? Reasons
The supply curve shifts right (increase in supply) due to lower costs or improved
production. It shifts left (decrease in supply) due to higher costs or production
difficulties.

*Assume that linear demand and supply functions of a medicine are given
as below.
Qd=85-5P
Qs-35+10P
Answer the following questions.
(a) Calculate the quantities demanded and supplied for prices from $5 to $12.
(b) Plot the above answers to give the demand and supply curves for the
product.
(c) Identify the equilibrium price and quantity.
(d) If the government imposes a price ceiling of 56 on the market, calculate the
shortage as a result of this price ceiling. Show this on the diagram. Summarize
your answer.

Price Supply Demand

1
2
3
4
5
6
7
8
9
10
11
12
13
14

*Assume that the following are linear demand and supply functions of a
medicine.
Qd=70-5P
Qs=-50+10P
Answer the following questions.
(a) Calculate the quantities demanded and supplied for prices from 55 to 514.
(b) Plot the above answers to give the demand and supply curves for the
product.
(c) Identify the equilibrium price and quantity
(d) If the government impases a price ceiling of $6 on the market, calculate the
shortage as a result of this price ceiling. Show this on the diagram. Summarize
your answer

Price Supply Demand

1
2
3
4
5
6
7
8
9
10
11
12
13
14