Part 1.

Choose the best answer

Question 1. Which of the following factors causes the demand curve for higher
education services to shifts to the left: B. Policy to increase university tuition
fees due to financial autonomy ( Yếu tố nào làm dịch chuyển đường cầu về dịch vụ
giáo dục đại học dịch chuyển sang trái: Chính sách tăng học phí đại học vì tự chủ
kinh tế )
Question 2. An increase in the demand for a good ( the demand curve shifts to
the right) will tend to: D. simultaneous decrease in equilibrium price and output
(tăng về lượng cầu của một hàng hoá ( đường cầu dịch chuyển sang phải) sẽ dẫn
đến sự tăng ở cả giá cân bằng và lượng cân bằng)
Question 3. What state will the market be in when the government imposes a
binding price ceiling: A. Demand increases, supply decreases, there is a shortage
of goods
Question 4. In the supply and demand model, taxes are levied directly on
sellers, causing displacement: D. supply curve to the left or up
Question 5. If the government sets an effective price floor, what will happen:
B. Excess of goods in the market ( dư thừa hàng hoá trên thị trường )
Question 6. Given the supply and demand functions of SP A as follows: QS =
2p – 80 and QD = -3p + 520. If the government sets a minimum price of 150,
the market will:
QS = QD => 2p – 80 = -3p + 520 => p = 120. PE = 120, QE = 160
If the government sets a minimum price of 150 that below the equilibrium price.
Qs = 220, Qd = 70 => leave a surplus of 150 units of output
Question 7. Which of the following policies is an example of a floor price: D.
all are correct
Question 8. Suppose the demand for beer during the Lunar New Year is 12
million liters, and the supply for beer is 15 million liters. The above figures
reflect: B. Price will decrease until supply = demand, according to self-regulating
mechanism
Question 9. For a secondary (or low-end) good, an increase in consumer
income will make: B. Decrease in demand
Question 10. Ms. K loves to eat lychee, but the price is too high because the
market supply is low, so she has switched to other fruits with suitable prices. So,
Ms. K is consuming: A. Substitute goods (hàng hoá thay thế)
Part 2. True/false answer and short explanation
Question 1. One of the reasons that dictates the shape of a downward sloping
market demand curve is that at lower prices more buyers enter the market.
 It is true
Question 2. A change in consumer income will shift the demand curve.
 It is true
Question 3. An increase in the substitute price of a given good will shift the
demand curve for that good.
 It is true
Question 4. Consumer surplus is calculated as the value of the buyer's willingness
to pay less the seller's cost of production
 It is false. Because Consumer surplus is calculated as the difference
between the maximum price a consumer is willing to pay and the actual
price they pay.
Question 5. The effective price ceiling policy causes an excess of goods in the
market
 It is false. Because The effective price ceiling policy causes an shortage of
goods in the market
Part 3. Exercise
Bài 2.
2.1. Setting Qd equal to Qs: 600 – 0.1P = 500 => P= 1000
The market price of rice is 1000 VND/kg
Vẽ đồ thị
2.2. to find the quantity at the floor price, we substitute the floor price into the
demand function: Qd = 600 – 0.1P => Qd= 600-0.1x1500=450
The excess rice: 500-450 = 50 kg
The government have to buy 50kg rice
The government spend: 50x1500= 75000 vnd
2.3.
Subsidy amount = (Market price - Subsidized price) * Quantity sold
Subsidy amount = (1000 - 500) * 500 = 250,000 VND
Therefore, the government must subsidize 250,000 VND in total.
Whether the government should choose price fixing or subsidies depends on
various factors such as the government's budget, the impact on farmers, and the
overall market dynamics. Price fixing can ensure a minimum price for farmers, but
it may lead to inefficiencies and surplus production. Subsidies, on the other hand,
can provide support to farmers without distorting market forces, but they require a
financial burden on the government. The government should carefully consider
these factors before making a decision.