Economics Midterm Multiple Choice

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THE UNIVERSITY OF HONG KONG
School of Economics & Finance
2010 Spring Semester, First Midterm Examination
Economics: ECON1001 (J and K)
Introduction to Economic I

Version A

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February 27, 2009

A note from the instructor:

9:00-10:00a.m.

We expect students to nish all the multiple choice questions in 60 minutes,

i.e., one minute
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(b) include the cost of the ticket plus the entertainment value of the concert in the opportunity cost of going to museum.
(c) include only the entertainment value of the concert in the opportunity cost of going to museum.
(d) include neither the cost of the ticket nor the entertainment value of the concert in the opportunity cost of going to museum.
(e) have a psychiatric evaluation because museum cannot be evaluated using cost-benet analysis.

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7. If the government wanted to use the incentive principle to encourage the control of pollution, it would
(a) increase the prices of plastic bags
(b) decrease the prices of plastic bags
(c) increase the prices of energy-saving light bulbs
(d) none of the above
(e) all of the above
8. If the government wanted to use the incentive principle to encourage people to reside farther away from the central business district, it would
(a) increase the subsidy on public transportation.
(b) increase the property taxes in the residential properties proportional to their distance from the central business district.
(c) reduce gasoline tax.
(d) (a) and (c) are correct, (b) is wrong.
(e) (a), (b) and (c) are all correct.
9. You have already incurred $100 production cost to produce computer software, and you expect to sell it for $200 to a loyal client Matthew. Matthew is the only potential customer of this computer software, if he does not buy the product, your computer software

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