1/ A bakery discovers that if it decreases the price of its birthday cakes by $1, it

sells 12 more cakes each month. (a) Assuming that monthly sales, M, are related
to prices, P, by a linear model, M = aP + b, state the value of a.
A) a = 12
B) a = -12
C) a = 1
D) a = -1
ANSWER: B
2/ A bakery discovers that if it decreases the price of its birthday cakes by $1, it
sells 12 more cakes each month. If the bakery sells 240 cakes in a month when
the price of the cake is $14, work out the value of b in the equation M = aP + b.
A) b = 408
B) b = -72
C) b = 240
D) b = 0
ANSWER: A
3/ A company's total cost (TC) function is given by TC = 300 + 40Q, where Q is
the quantity produced. What does the 300 represent in this equation?Hint: total
cost = fixed cost + variable costfixed cost is the cost that doesn't react to
change in the level of business activities variable cost is the cost that change
when level of business activities changes
A) Variable cost per unit
B) Fixed costs
C) Total revenue
D) Profit margin
ANSWER: B
4/ A line passes through the points (2, 5) and (6, 13). What is the y-intercept of
this line?
A) 1
B) 2
C) 3
D) 4
ANSWER: A
5/ A taxi firm charges a fixed cost of $4 plus a charge of $2.50 a mile. (a) Write
down a formula for the cost, C, of a journey of x miles
A) C = 4 + 2.50x
B) C = 2.50 + 4x
C) C = 4x + 2.50
D) C = 4 + 2x
ANSWER: A
6/ Monthly sales revenue, S (in $), and monthly advertising expenditure, A (in $),
are modelled by the linear relation, S = 9000 + 12A. If the firm increases
monthly expenditure on advertising by $1, what is the corresponding increase in
sales revenue?
A) $9000
B) $12
C) $9012
D) $1
ANSWER: B
7/ Monthly sales revenue, S (in $), and monthly advertising expenditure, A (in $),
are modelled by the linear relation, S = 9000 + 12A. If the firm does not spend
any money on advertising, what is the expected sales revenue that month?
A) $9,000
B) $12,000
C) $15,000
D) $0
ANSWER: A
8/ Monthly sales revenue, S (in $), and monthly advertising expenditure, A (in $),
are modelled by the linear relation, S = 9000 + 12A. If the firm increases
monthly expenditure on advertising by $2, what is the corresponding increase in
sales revenue?
A) $9
B) $24
C) $15
D) $21
ANSWER: B
9/ State the value of the slope and y-intercept for the following line: 4x + 2y = 5
A) Slope = -2, y-intercept = 2.5
B) Slope = 2, y-intercept = 5/2
C) Slope = -2, y-intercept = 5/4
D) Slope = -4, y-intercept = 5/2
ANSWER: A
10/ The demand and supply functions for two interdependent commodities are
given by QD1 = 40 − 5P1 − P2, QD2 = 50 − 2P1 − 4P2, QS1 = −3 + 4P1, QS2 =
−7 + 3P2. Where QDi, QSi and Pi denote the quantity demanded, quantity
supplied and price of good i, respectively. Determine the equilibrium price and
quantity for this two-commodity model. Are these goods substitutable or
complementary?
A) Substitutable goods
B) Complementary goods
ANSWER: B
11/ The demand and supply functions of a good are given by P = −3QD + 48 P =
1/2QS + 23 Find the equilibrium quantity if the government imposes a fixed tax
of $4 on each good.
A) 4 units
B) 6 units
C) 8 units
D) 10 units
ANSWER: B
12/ The demand function for a product is given by P = 200 - 2Q, where P is the
price and Q is the quantity demanded. At what price will the quantity demanded
be zero?
A) $0
B) $100
C) $200
D) $400
ANSWER: C
13/ Two new smartphone models are launched. Their sales (S) in tens of
thousands after n months are given by: Model 1: S1 = 4 + 0.5n, Model 2: S2 = 8
+ 0.1n. What does the 4 and 8 represent in these equations?
A) The price of the phones
B) The initial sales at launch
C) The monthly increase in sales
D) The total sales after one year
ANSWER: B
14/ Which of the following equations represents a horizontal line to y = 3?
A) x = 5
B) y = 3
C) y = 2x + 1
D) 2x + 3y = 6
ANSWER: B
15/ Which of the following is true for all linear functions?
A) They always pass through the origin (0, 0)
B) They have a constant rate of change
C) Their graph is always an increasing function
D) They always have a positive y-intercept
ANSWER: B
16/ ALL OF THE FOLLOWING WILL RESULT IN A SHIFT IN A DEMAND CURVE
EXCEPT: Cầu (Q)
A) A change in the income of buyers
B) A change in the supply of a good (cung)
C) A change in expected future prices
D) A change in the price of related goods
E) A change in buyers' preferences
ANSWER: B
17/ Doherty Industries is a leading producer of an energy drink. Which of the
following will cause Doherty Industries to offer more of the product at all possible
sale prices?
A) A competitor lowers the price of the product.
B) The price of a key ingredient increases.
C) The price of a key ingredient decreases.
D) The demand for the energy drink decreases.
E) The demand is perfectly elastic.
ANSWER: C
18/ For a closed economy with no government intervention, the consumption
function is C = 0.6Y + 30, and planned investment is I = 100. What is the
equilibrium level of national income?
A) Y = 325
B) Y = 300
C) Y = 350
D) Y = 275
ANSWER: A
19/ If average household income rises and we observe that the demand for pork
chops increases, pork chops must be
A) an inferior good.
B) a normal good.
C) a surplus good.
D) a public good.
E) a shortage good.
ANSWER: B
20/ If the consumption function is given by C = 4200 + 0.75Y, what is the
marginal propensity to consume (MPC) and the marginal propensity to save
(MPS)?
A) MPC = 0.75, MPS = 0.25
B) MPC = 0.80, MPS = 0.20
C) MPC = 0.70, MPS = 0.30
D) MPC = 0.75, MPS = 0.30
ANSWER: A
21/ If the national income, Y, is 1000 units, then consumption, C, is 800 units.
Also, whenever income rises by 100, consumption increases by 70. Assuming
that the consumption function is linear, what are the marginal propensity to
consume (MPC) and the marginal propensity to save (MPS)?
A) MPC = 0.7, MPS = 0.3
B) MPC = 0.8, MPS = 0.2
C) MPC = 0.6, MPS = 0.4
D) MPC = 0.75, MPS = 0.25
ANSWER: A
22/ If the government subsidizes (hỗ trợ cho) the production of corn,
A) the demand curve will shift to the left.
B) the demand curve will shift to the right.
C) the supply curve will shift to the left.
D) the supply curve will shift to the right.
E) the quantity supplied will increase along a fixed supply curve.
ANSWER: D
23/ Sally works at a clothing store and the manager has cut her weekly shift from
30 to 20 hours, reducing her income. As a result, her demand for fresh
vegetables decreases and her demand for canned vegetables increases. In this
example, which type of good is a can of vegetables?
A) a shortage good
B) an inferior good
C) a necessity
D) a capital good
E) a normal good
ANSWER: B
24/ Suppose it is necessary for tin to be used in the production of guitar strings.
If the price of tin decreases and all other variables are constant, what will most
likely result? ‘
A) The demand for silver will increase.
B) The quantity demanded for guitars will decrease.
C) The demand for guitars will increase.
D) The supply of guitars will decrease.
E) The supply of guitar strings will increase.
ANSWER: E
25/ Suppose that aluminum is a key production input in the production of
bicycles. If the price of aluminum falls, and all other variables are held constant,
we expect
A) the demand for aluminum to rise.
B) the supply of bicycles to rise.
C) the supply of bicycles to fall.
D) the demand for bicycles to rise.
E) the demand for bicycles to fall.
ANSWER: B
26/ The apple market is in equilibrium. Suppose we observe that apple growers
are using more pesticides to increase apple production. At the same time, we
hear that the price of pears, a substitute for apples, is rising. Which of the
following is a reasonable prediction for the new price and quantity of apples?
A) Price rises, but quantity is ambiguous.
B) Price falls, but quantity is ambiguous.
C) Price is ambiguous, but quantity rises.
D) Price is ambiguous, but quantity falls.
E) Both price and quantity are ambiguous
ANSWER: C
27/ giống 12/ The demand and supply functions of a good are given by P =
−3QD + 48, P = 1/2QS + 23. Find the equilibrium quantity if the government
imposes a fixed tax of $4 on each good.
A) Q = 6
B) Q = 0
C) Q = 5
D) Q = 4
ANSWER: A
28/ The demand and supply functions of a good are given by P = −5QD + 80, P
= 2QS + 10. If the government deducts, as tax, 15% of the market price of each
good, determine the new equilibrium price and quantity
A) Q = 9.28
B) Q = 8.75
C) Q = 10.12
D) Q = 9.56
ANSWER: A
29/ The equilibrium price is established
A) at the next price above where the demand and supply curves intersect
B) when the quantity supplied equals the quantity demanded Qd=Qs
C) at the next price below where the demand and supply curves intersect
D) when you take the difference between the two lowest points plotted on the
demand and supply curves
E) at the price where either the demand or supply curve becomes horizontal
ANSWER: B
30/ The figure shows the market for fidget spinners. Which of the following is
true at $30?

A) There is a shortage of 60 fidget spinners.

B) There is a shortage of 40 fidget spinners.
C) There is a surplus of 60 fidget spinners.
D) There is a surplus of 40 fidget spinners. (cung vượt cầu)
ANSWER: D
31/ The market for denim jeans is in equilibrium, and the price of polyester
pants, a substitute good, rises. In the jean market
A) supply falls, increasing the price and decreasing the quantity.
B) supply falls, increasing the price and increasing the quantity.
C) demand falls, increasing the price and decreasing the quantity.
D) demand rises, increasing the price and increasing the quantity.
E) supply and demand both fall, causing an ambiguous change in price but a
definite decrease in quantity.
ANSWER: D
32/ What is point A commonly known as
A) market equilibrium
B) Nash equilibrium
C) marginal revenue
ANSWER: A
33/ WHICH OF THE FOLLOWING COULD CAUSE THE MOVEMENT INDICATED BY
THE ARROW IN THE GRAPH SHOWN HERE?

A) A decrease in consumer income

B) Lower worker wages
C) Seller's expectation that the good's price will fall in the future
D) Reduced government regulation of producers
E) Increased government regulations of producers
ANSWER: E
34/ Which of the following situations will cause the demand curve for chicken, a
normal good, to shift to the left?
A) Consumer incomes decrease.
B) Consumer incomes increase.
C) The price of steak decreases.
D) There is a decrease in the cost of raising chickens on a farm.
E) There is a scientific discovery that relates eating chicken to lower blood
pressure
ANSWER: A
35/ Which of the following would cause the demand for good X to decrease? Q
A)
Producers of good X find that the cost of producing Y has increased dramatically.
B) The workers who produce good X receive a large increase in wages.
C) Goods X and Y are substitutes, and the government imposes a tax on good Y
D) Good X is a normal good, and the government lowers income taxes by 10%.
E) Good X is an inferior good, and the government decreases income taxes by
15%.
ANSWER: E

1/ A city tour guide currently charges $34 per person for a full day's
tour, attracting an average of 48 customers. According to market
research, for every $1 increase in the tour price, the guide loses two
customers. What price should the tour guide charge to maximize
revenue, and what will the maximum revenue be?

Answer
To find the price that maximizes revenue, we define the revenue function as:
Revenue (R) = price (p) × quantity demanded (q).

From the demand function derived earlier, we have q = 116 - 2p.

Thus, the revenue function becomes:
R(p) = p × (116 - 2p) = 116p - 2p².

This is a quadratic function, and the maximum revenue occurs at the vertex of
the parabola. Using the formula p = -b/2a for the vertex, where a = -2 and b =
116, we calculate the optimal price:
p = -116 / (2 × -2) = 29.

Therefore, the price that maximizes revenue is $29. Substituting this value into
the revenue function gives:
R(29) = 29 × (116 - 58) = 29 × 58 = 1682.

Thus, the maximum revenue is $1682.

2/ The manager of a movie theater finds that she will sell all 800 tickets
to the Friday evening movie if the charge for admission is $4 per
person. For each $1 increase in admission price, she expects 100 fewer
people to buy tickets. How much should she charge for admission so
that the revenue, R, from ticket sales is $3,500? (Note: Enter the larger
of the two possible admission prices in the answer box.)

Solution
1. **Let the price of admission be p dollars.**
At p = 4 dollars, the manager sells 800 tickets. For every $1 increase in
price, 100 fewer people buy tickets. Thus, the number of tickets sold, q,
can be modeled as:
 q = 800 - 100(p - 4).
Simplifying, we get:
q = 800 - 100p + 400 = 1200 - 100p.

2. **Total Revenue (R):**

Revenue is given by the product of the price and the quantity of tickets
sold:
R = p × q = p × (1200 - 100p).
We know that R = 3500, so:
3500 = p × (1200 - 100p).

3. **Solve the equation:**

Expanding the equation gives:
3500 = 1200p - 100p².
Rearranging it into standard quadratic form:
100p² - 1200p + 3500 = 0.
Dividing the whole equation by 100 to simplify:
p² - 12p + 35 = 0.

solve the quadratic to find the two possible prices: $7 and $5. Since we
need to enter the larger value, the answer is $7.

3/ The manufacturer of a stereo system finds that the number of units,

x, ordered per day (demand) is given by:
x = 125 - p/4,
where p is the price per unit. The total cost, C, per day to manufacture
x units is given by:
C = 11,200 + 60x.
How many units must be produced and sold each day to break even;
that is, so that the revenue, R, is equal to the cost, C? (Note: Enter the
smaller of the two possible values in the answer box.)

Solution
1. **Let the price per unit be p and the number of units sold be x.**
From the demand function, we have:
x = 125 - p/4, so p = 4(125 - x) = 500 - 4x.

2. **Total Revenue (R):**

Revenue is given by the product of the price and the number of units sold:
R = p × x = (500 - 4x) × x = 500x - 4x².

3. **Total Cost (C):**

The total cost function is given as:
C = 11,200 + 60x.

4. **Break-Even Point:**
The break-even point occurs when total revenue equals total cost, or R =
C. Setting the two equal:
 500x - 4x² = 11,200 + 60x.
Rearranging the equation:
-4x² + 500x - 60x - 11,200 = 0,
which simplifies to:
-4x² + 440x - 11,200 = 0.
Dividing the entire equation by -4 to simplify:
x² - 110x + 2800 = 0.

5. **Quadratic Formula:**
Using the quadratic formula to solve for x: the two possible break-even
values of x are 70 and 40. The smaller value is 40.

4/ Supply and Demand Functions with Tax Imposition

The supply and demand functions of a good are given by:
P = 2Q_S² + 3Q_S + 10 (Supply Function)
P = -Q_D² - 3Q_D + 154 (Demand Function)
If the government imposes a tax of $5 per item, determine the new
values of equilibrium price and quantity.(Round your answers to two
decimal places.)
Solution
1. **Supply and Demand Functions:**
We are given the supply and demand functions as follows:
Supply: P = 2Q_S² + 3Q_S + 10,
Demand: P = -Q_D² - 3Q_D + 154.
The tax of $5 per item will increase the price paid by consumers. The price
received by suppliers is reduced by $5.
2. **Incorporating the Tax:**
When a tax of $5 is imposed, the price paid by consumers (demand price) must
include this tax, so we adjust the supply function as follows:
P = 2Q_S² + 3Q_S + 10 + 5 = 2Q_S² + 3Q_S + 15.

The new supply function becomes:

P = 2Q_S² + 3Q_S + 15.
3. **Setting Supply Equal to Demand to Find Equilibrium:**
At equilibrium, the quantity supplied equals the quantity demanded, so we set
the two functions equal to each other:
2Q²_S + 3Q_S + 15 = -Q_D² - 3Q_D + 154.
At equilibrium, Q_S = Q_D, so:
2Q² + 3Q + 15 = -Q² - 3Q + 154.

Rearranging this equation gives:

3Q² + 6Q - 139 = 0.
4. **Solving the Quadratic Equation:**
the equilibrium quantity is approximately 5.88 units.
5. **Substitute Q back into the Demand Function to Find the Price:**
Now that we have the equilibrium quantity, we substitute it back into the
demand function:
P = -(5.88)² - 3(5.88) + 154 = -34.58 - 17.64 + 154 ≈ 101.78.

Thus, the new equilibrium price is approximately $101.78.