1. Which of the following functions is not a function of the state?

a. Redistribution function
b. Stabilization function
c. Intervention function
d. Allocation function

2. In an economy consisting of two sectors X and Y, if the opportunity cost of producing one
unit of X is constant and equal to 2 regardless of the quantity produced, it necessarily means
that:
a. The production possibility frontier is a straight line
b. Due to a technical progress in sector Y, the opportunity cost of procing one unit of Y
will be greater than 2.
c. Due to a technical progress in sector X, the opportunity cost of producing one unit of
Y will be greater than 2.
d. The opportunity cost of producing one unit of Y is constant and equal to 2 regardless
of the quantity produced.

3. What can we predict with certainty as a result of technological progress allowing the
reduction of the production costs of a good taking place in parallel with the increase in the
price of another good that is a close substitution to it?
a. The equilibrium price will decrease
b. The equilibrium quantity will increase
c. The equilibrium price will increase
d. The equilibrium quantity will remain constant.

4. Following an increase in the production costs of a good, there is:

a. A decrease in the equilibrium price.
b. A shift along the supply curve
c. A downward shift (to the right) of the supply curve
d. A decrease of the quantity exchanged

5. The indifference curve between two perfectly substitutable goods:

a. Is negatively sloped and convex
b. Is a negatively sloped straight line
c. Is right-angled
d. Is positively sloped
6. The area bounded by the consumer’s budget constraint:
a. Represents all combinations of goods that cost him the same
b. Represents all combinations of goods that the individual is likely to consume if he
exhausts his income given the prices of the goods
c. Represents all combinations of goods that the individual can afford to consume with
his income given the prices of the two goods
d. Extends when the income of the individual and the prices of the goods double
simultaneously

7. Given an individual fully allocating his income to the consumption of two goods X and Y
whose respective prices are Px = 2 and Py = 3. Given his current consumption basked, the
marginal utility associated with the consumption of good X is 8 and that associated with the
consumption of good Y is 15. What can be deducted?
a. The individual maximizes his utility with this basked of goods.
b. To maximize his utility, the individual should increase his consumption of good Y and
decrease that of good X
c. Nothing can be deducted with certainty, as we do not know the income of the
individual
d. The individual minimizes his utility with this basked of goods instead of maximizing it

8. Which of the following statements is strictly correct?

a. the cross price elasticity of demand indicates the change of the price of a good due
to a change in the quantity consumed of another good
b. a decrease in consumer income could increase the quantity demanded of a good if it
is an inferior good
c. at the consumer optimum, the marginal utility of each good is equal to its price
d. the marginal rate of substitution indicates the rate at which the two goods are
exchanged in the market.

9. In the case of a “Giffen” good, which of the following statements is necessarily true?
a. the income elasticity of demand of this good is negative
b. following a decrease in the price of the good in question, the income effect leads the
individual to consume a greater amount of the good
c. it is a luxury good
d. the Engle curve for this good is positively sloped

10. given a consumer faced with the choice between goods x and y, and maximizing his utility
under his income constraint. Graphically, what will happen when the income of the
individual decreases?
a. the budget line moves parallel towards the origin.
b. the budget line rotates inward while keeping its intersection with the x-axis
c. the budget line remains unchanged if the prices of the two goods increase
simultaneously and in the same proportion
d. The budget line rotates outward while keeping its intersection with the y-axis
11. Following the increase in the price of a good by 1%, the quantity demanded of this good by
an individual decreases by 2%. We can deduce that:
a. The price elasticity of demand of the individual is equal to 0.5.
b. The price elasticity of demand of the individual is equal to 2.
c. The expenditure on this good by the individual increases.
d. In contrary to the income effect, the substitution effect causes the individual to
consume a larger quantity of this good.

12. since the cross-price elasticity of demand for a good compared to another good is -4, what
can we say with certainty?
a. the two goods are complementary goods
b. the two goods are substitutable goods
c. one is a normal good and one is an inferior good.
d. both are normal goods

13. A demand function as a straight line is written as (q: quantity ; p: price)

a. q = a + bp, where a and b are positive parameters.
b. q = a + bp, where a is a positive parameter and b is a negative parameter.
c. q = a + bp, where a is a negative parameter and b is a positive parameter.
d. q = a + bp, where a and b are positive parameters.

14. The phenomenon of the backward-bending market supply curve for labor:
a. Reflects the policy of labor unions.
b. Results from workers’ preference for leisure over work.
c. Results from the effect of the decrease in the cost of leisure as wage rates rise.
d. Indicates an increasing desire for leisure as income rises.

15. A company produces 39 units of a good when three workers are employed. By hiring an
additional worker, production moves to 52 units. What can be said with certainty?
a. The marginal productivity of labor is equal to the average productivity of labor.
b. The company is in a phase of diminishing average returns
c. The average productivity of labor is lower than the marginal productivity of labor.
d. The company is in a phase of increasing marginal returns.

16. Graphically, the marginal cost:

a. is a branch of an equilateral hyperbola
b. is a straight line
c. corresponds to the slope of the straight line linking the origin to a point on the fixed-
cost function
d. corresponds to the slope of the variable cost function
17. Which of the following statements is necessarily true?
a. Maximizing total profit means that the company maximizes the difference between
its unit revenue and unit total cost
b. The function of the unit variable cost intersects that of the marginal cost t the
minimum of the latter.
c. the function of the unit fixed cost is a branch of an equilateral hyperbola.
d. A company that makes a loss has an interest in stopping the production

18. Which of the following statements describes best the necessary condition for total profit
maximization of a company operating in a situation of perfect competition
a. its marginal profit must be zero
b. its marginal profit must be at its maximum
c. its unit profit must be zero
d. Its unit profit must be at its maximum

19. For a firm under perfect competition, producing a quantity that corresponds to the
shutdown point means that:
a. the quantity produced is greater than that corresponding to the breakeven point
b. the profit is zero
c. the profit is minimized instead of being maximized
d. it can only cover its variable cost.

20. Consider a company with the following total cost function: TC(q) = q^2 + 1. Which of the
following statements is true?
a. The marginal cost function is written: MC(q) = q^2
b. The variable cost function is written: VC(q) = 2q
c. The unit variable cost function is written: UVC(q) = q + 1/q
d. The unit fixed cost function is written: UFC = 1/q

21. One of the conditions for perfect competition is the atomicity of supply. What does this
condition mean?
a. That an individual producer cannot influence the market price.
b. That every company can know the conditions of production of other companies
c. That the company in perfect competition is the smallest production unit that one can
find on any type of market
d. That each company sees its survival depending on the actions of other firms in the
market.

22. In a perfectly competitive market, at the short-run equilibrium:

a. The price is minimized
b. The quantity exchanged is maximized
c. The marginal utility is maximized
d. The marginal cost is minimized
23. Consider a perfectly competitive market in a short-run equilibrium situation. For an
individual producer in this market, which of the following variables do not necessarily
correspond to the equilibrium price?
a. The marginal cost.
b. The marginal revenue.
c. The unit total cost.
d. The unit revenue.

24. A company in perfect competition has a fixed cost equal to 4 and a marginal cost function
MC(q) = 2q+1. If the price the company is facing is equal to 41, and if it maximizes its profit,
which of the following statements is true?
a. The quantity produced is equal to 21.
b. the variable cost is equal to 424
c. The profit is equal to 396
d. the total revenue is equal to 810

25. The price elasticity of supply:

a. is the weaker the longer the time left to producers for adjustment in case of a price
change.
b. is equal to 1 if the supply function is a straight line passing through the origin.
c. is equal to 0 if the supply function is a horizontal line
d. tend to infinity as the supply function becomes a vertical line

26. An isoquant represents:

a. the set of all combinations of the two inputs labor and capital leading to the same
level of satisfaction.
b. the set of all combinations of a fixed factor and a variable factor leading to the same
level of production
c. the set of all combinations of two goods produced with constant quantities of the
production
d. the set of all combinations of the two inputs labor and capital leading to the same
level of production

27. Returns to scale refers to:

a. The increase in output that accompanies an increase in one input, all other inputs
held constant
b. A change in a production process that enables a firm to achieve more output from a
given combination of inputs
c. The number of units of increase in output that can be obtained from an increase in
one unit of input
d. The percentage by which output will increase when all inputs are increased by a
given percentage
28. Given a production function Q = 3KL, we can say that:
a. This production function is not Cobb-Douglas
b. This production function is Cobb-Douglas and exhibits decreasing returns to scale
c. This production function is Cobb-Douglas and exhibits increasing returns to scale
d. This Cobb-Douglas production function does not exhibit a constant elasticity of
substitution
29. Consider a market characterized by the following supply and demand functions: (Qs: quantity
supplied, P: Price, Qd: quantity demanded)

Qs = P – 1

Qd = 5 – P

Suppose that an increase in production costs changes the supply function that becomes: Qs =
P – 3. Following the change in costs:

a. The equilibrium price increased from 1 o 3.

b. At the equilibrium, producer revenues increased from 3 to 4.
c. The quantity exchanged in this market decreased from 2 to 1.
d. The total consumer expenditure for this good passes from 4 to 6.

30. A firm’s long-run average total cost line is:

a. Identical to its long-run marginal cost line.
b. Also its long-run supply curve.
c. In fact the average total cost curve of the optimal plant.
d. Tangent to all the curves of short-run average total cost.