1. Which of the following is likely to have the highest price elastic demand?- A. Salt B. Rice C. Candies D. Calculators 2. Which of the following is(are) classified as having price elastic demand?- 1. Price elasticity of demand of oranges is 1.2.- II. Price elasticity of demand of apples is 1.6. III. Price elasticity of demand of strawberries is 2.2.- A. I only B. I and II C. III only D. I, II and III 3. We face trade-offs in our daily lives because of A. scarcity B. efficiency C. equality D. incentive 4. In general, when unemployment rate falls, we can expect A. inflation rate to rise B. inflation rate to fall C. inflation rate to remain constant D. no relationship between unemployment rate and inflation rate 5. The original equilibrium price of apples is $10 and the equilibrium quantity is 160. The new equilibrium price of apples is $8 and the new equilibrium quantity is 200. Which classification of demand elasticity does apple belong if the mid-point method is used to calculate the price elasticity?" A. Perfectly elastic B. Elastic C. Unit elastice D. Inelastic 6. Which of the following is(are) correct?" I. "Sports cars has a higher price elasticity of demand than Porsche sports cars" II. "Rolex watch has a higher price elasticity of demand than "water" A. I only B. II only C. Both I and II D. Neither I nor II 7. When the price of cookies changes, the supply curve for cookies: A. does not shift because the movement is along the original demand curve. B. does not shift because the movement is along the original supply curve. C. shifts and the new equilibrium price is the intersection of the new demand curve and the original supply curve. D. shifts and the new equilibrium price is the intersection of the new supply curve and the original demand curve. 8. Iris hires domestic helper to clean her house. Daisy cleans her own house. Which of the following will be included in the calculation of GDP?4 I. Iris' payment to the domestic helper. II. Estimated value of Daisy's cleaning service. A. I only B. II only C. Both I and II D. Neither I nor II 9. Suppose a competitive firm produces and sells 250 units of output for a total revenue of $8,750. If the firm increases the output to 251, what is the average revenue of the 251st unit? A. $35 B. $38 C. $41 D. $454 10. Which of the following is(are) correct about how accountants and economists consider costs? I. Accountants consider only implicit costs. II. Economists consider both explicit and implicit costs. A. I only B. II only C. Both I and II D. Neither I nor II 11. There is a total of 100 vegetable farmers in Hong Kong. Because of the recent typhoon, 50 of the farmers' lands are badly damaged. Which of the following will likely happen to the supply curve of vegetable?- A. The supply curve will shift to the left. B. The supply curve will shift to the right. C. The supply curve will not shift as the price will rise along the supply curve. D. The supply curve will not shift as the price will fall along the supply curve. 12. There are two goods S and R. The demand for good R decreases when the price of good S rises. Assuming other things are constant, goods S and Rare A. inferior goods B. substitute goods C. complement goods D. abnormal goods 13. Matthew owns a hair salon and has the following revenue and costs:- Total revenue = $120,000 Total variable cost = $98,0004 Total fixed cost = $35,000 What would an economist recommend Matthew to do in the short-run? A. Stay in business because he has no other choice. B. Stay in business because the revenue is covering the variable costs. C. Shut down because the salon is making a loss. D. Shut down because he can sell the furniture and equipment. 14. Anthony opens a computer supplies store using his savings of $100,000 from his savings account and a loan of $30,000 from the bank. His savings account is earning 1.5% interest and the interest rate on the bank loan is 6%. What is the implicit cost of capital? A. $3,300- B. $1,500 C. $1,800 D. $1,950- 15. Disneyland announces that it will raise its ticket price 3 months later. As a result of this announcement, the demand curve for Disneyland tickets today will A. shift to the right B. shift to the left C. not change D. become horizontal