Worksheets2022 IEO-NEO FINAL ROUND
Total questions: 51
Worksheet time: 2hrs 42mins
1) Which of the following statements best describes the Efficient Market Hypothesis?
Share prices on the market reflect all available information
Stock markets produce no externalities
Government interventions can make markets more efficient
Natural monopolies should not be regulated
A cake weights 900 g. Paul cuts it in 4 pieces. The biggest piece is as heavy as the 3 others weight altogether. What's the weight of the biggest piece?
250 g
300 g
400 g
450 g
Country A's production possibility frontier is given by the equation X2 + Y2 = 200. Country B's production possibility frontier is given by the equation X + Y = 100.
Choose the correct statement.
For any given X < 100 same for both countries, country A can produce less of good Y than country B.
If the countries want to produce 60 units of X together, the maximum possible amount of Y that they can produce together equals approximately 54.
The opportunity cost of producing an additional unit of X is equal between the countries at all points of their PPFs.
If the countries join their production possibilities, their PPF will be given by X2 + X + Y2 + Y = 300.
At the summer camp, 7 pupils eat ice cream every day, 9 pupils eat ice cream every second day and the rest of the pupils don't eat ice cream at all. Yesterday, 13 pupils had ice cream. How many pupils will eat ice cream today?
7
8
9
10
Choose the correct statement about externalities:
When a person is vaccinated against COVID-19, it creates a positive externality in the future
If some action is associated with negative externality, it must be forbidden to achieve economic efficiency
Positive externalities increase efficiency, so markets with them should not be subject to government intervention
If externality appears in a monopolized market, the inefficiency is doubled and strict regulation is called for
A natural number has three digits. When we multiply the digits we get 135. What result do we get if we add the digits?
14
15
16
17
Choose the correct statement about monopoly.
A monopoly charges the highest price possible on the market.
For a non-discriminating monopoly, price equals marginal revenue.
Unlike a perfectly competitive firm, the goal of a monopoly is to maximise average profit.
A monopoly would benefit from the ability to sell additional units at a price lower than the first units.
In a restaurant there are 16 tables, each having either 3, 4 or 6 chairs. Together, the tables having 3 or 4 chairs can accommodate 36 people. Knowing that the restaurant can accommodate 72 people, how many tables are there with 3 chairs?
4
5
6
7
When investors buy a share to cover their short positions, which results in a rapid increase in this share price, this is called…
Short squeeze
Game stop
Long squeeze
Fundamental shock
Trees grow on only side of Park Avenue. There are 60 trees in total. Every second tree is a maple, and every third tree is either a linden or a maple. The remaining trees are birches. How many birches are there?
10
15
20
24
Which of the following statements about industries that are oligopolies is false?
Firms in these industries may attempt to cooperate.
Firms in these industries are interdependent.
The fact that there is more than one firm in an oligopoly means that there are no barriers to entry.
An oligopoly with two firms is called a duopoly.
Granny has 10 grandchildren. Alice is the eldest. One day, Granny notices that her grandchildren all have di erent ages. If the sum of her grandchildrens' ages is 180, what is the youngest Alice could be?
23
22
21
20
Which of the following best describes the Lucas Critique?
The economy of the Galactic Empire in ‘Star Wars’ is very unrealistic
Economists should not use too much math in their papers
It is generally not a good idea to use relationships found in historical data for policy-making
Consumers do not maximize utility in real life
Each year, the date of the Kangaroo competition is the third Thursday of March. What is the latest possible date of the competition in any year?
14th March
15th March
20th March
21st March
Which of the following statements about duopolists in the Cournot model of oligopoly is false?
Each firm makes an assumption about how much the other will produce, and sets its own output at the level which will maximize its profit if the other firm behaves as assumed.
Each firm has a reaction curve showing its chosen output for different outputs that the other might set.
The equilibrium is where the reaction curves intersect.
If the duopolists produce homogeneous products, then the equilibrium price will be the same as if the industry had a monopoly.
An antique scale is not working properly. If something is lighter than 1000 g, the scale shows the correct weight. However, if something is heavier than or equal to 1000 g, the scale can show any number above 1000 g. We have 5 weights A g, B g, C g, D g, E g each under 1000 g. When they are weighed in pairs, the scale shows the following: B + D = 1200, C + E = 2100, B + E = 800, B + C = 900, A + E = 700. Which of the weights is the heaviest?
A
B
C
D
Investor J is convinced that there is a price bubble on the market and that it will burst in the future after the price rises a little more. If he acts in accordance with this belief, which of the following is true?
J will buy this asset and wait until the price falls to sell it
J will short sell this asset and wait until the price drops to buy it, gaining risk-free profit
J will short sell this asset and wait until the price drops to buy it, taking into account the importance of timing
J will remain inactive since bubbles are risky and could lead to significant losses, unlike other assets
Think about the Lorenz curve constructed by lining up all the individuals in the world from lowest to highest income, irrespective of the country people live in. What is the closest estimate of the Gini coefficient of this curve?
0.1
0.2
0.3
0.7
Choose the correct statement about public goods.
Public goods are efficiently provided by markets.
A public good is a type of a natural monopoly.
A free face mask that you receive from the government is an example of a public good.
National defence is an example of a public good.
Choose the correct statement for a perfectly competitive market with supply and demand curves looking as usual:
If the government sets the price floor above the equilibrium price, consumers are better off
If the government sets the price floor above the equilibrium price, producers (sellers) are better off
If a government introduces a per-unit tax, the tax revenue is smaller than the combined loss of consumers and producers (sellers)
If a government introduces a per-unit subsidy, the government expenditure is smaller than the combined gain of consumers and producers (sellers)
Choose the correct statement about a perfectly competitive market.
Market outcomes are fair, that is, in equilibrium, everyone gets what they deserve.
The distribution of the total surplus between consumers and producers depends on the relative elasticities of demand and supply.
Market equilibrium is Pareto-efficient in the presence of externalities.
If the market is monopolized, the quantity produced will rise.
Two players are negotiating where to place some object on the Cartesian plane. They choose the coordinates (x, y) in the following way: Player A sets the coordinate on the X-axis, Player B sets the coordinate on the Y-axis. Player A wants the object to be as close as possible to the point (2, 4); Player B wants the object to be as close as possible to the point (3, 1). Find the Nash equilibrium location of the object.
(2, 1)
(2.5, 2.5)
(3, 4)
(0, 0)
The Coase theorem result does NOT apply if…
there is a significant externality between two parties.
the court system vigorously enforces all contracts.
transaction costs make negotiating difficult.
both parties understand the externality fully.
Rational João Pedro spends all his money on two goods, X and Y, and always knows for sure his optimal bundle. When the prices of both goods are 3, he chooses the bundle (4, 4). Choose the correct statement (other things being equal):
If his income goes up, his consumption of X must increase
If the new prices of goods (X, Y) become (1, 5), it is possible that the bundle (3, 5) becomes the optimal choice
If the new prices of goods (X, Y) become (2, 4), it is possible that the bundle (6, 3) becomes the optimal choice
If the new prices of goods (X, Y) become (2, 4), it is possible that the bundle (2, 5) becomes the optimal choice
The plumber labor market of the town X is perfectly competitive, supply is a linear function that passes through the origin. The equilibrium wage is 10$ per hour. After the minimum wage of 12$ per hour was introduced, the quantity supplied of labor increased by 10 workers, the quantity demanded fell by 12 workers. Find the unemployment rate (pick the nearest estimate).
0%
17%
37%
46%
Which of the following is true regarding involuntary unemployment?
Involuntary unemployment is forbidden by law in most countries
If a worker is fired against her will but finds a new job immediately, involuntary unemployment increases
If wages are above the market-clearing (efficiency wages), there is no involuntary unemployment
Setting a minimum wage above the market-clearing wage creates involuntary unemployment
Which of the following policies will most likely increase the Gini coefficient? (Consider only the immediate effects)
A lump-sum tax of 100 dollars for every citizen
Fixed subsidy of 10 dollars for every citizen.
Removing the regressive income tax.
None of the options.
If the Central Bank of country K is trying to speed up the recovery of the country’s economy using monetary policy, which of the following is correct, other things equal?
The currency of country K is likely to appreciate
It is likely that country K’s exports will become cheaper for foreigners
Country K’s bonds will go down in prices
The money supply will shrink
The Nobel Memorial Prize in Economic Sciences in 2019 was awarded…
for the experimental approach to fighting global poverty.
for having developed and applied dynamic models for the analysis of economic processes.
for the work in the theory of financial economics.
for studies of climate change.
Which of the following scholars is most famous for using field experiments in their research?
Eric Maskin
Esther Duflo
Eugene Fama
Gregory Mankiw
Economist N calculates income inequality based on the Gini coefficient and the incomes of all individuals in the society. Economist M calculates income inequality based on the Gini coefficient and the incomes of all families in the society (simply adds up all family members’ incomes before constructing the Lorenz curve). Which of the following is true?
N’s Gini coefficient is likely to be smaller than M’s
M’s Gini coefficient is likely to be smaller than N’s
The two Gini coefficients will be the same
None of the other statements is true
If some investment project has multiple stages, one can often realize it is failing before the final stage. Yet, sometimes instead of abandoning further investment, people continue to invest because they don’t want to feel as if they wasted money. This is called…
Survivorship bias
Sunk cost fallacy
Self-fulfilling prophecy
Endowment effect
If two firms compete by choosing quantities (Cournot or Stackelberg models), which of the following is true?
Each of them will want to choose the quantity first (be the leader).
Each of them will want to choose the quantity second (be the follower).
Both will prefer a situation when the output is chosen simultaneously.
All other answers are wrong.
Which of the following statements about cheating on agreements is false?
Each firm may benefit if it alone cheats.
If two firms repeat their game a known number of times, then threats of punishment will not deter cheating
If two firms repeat their game an unknown number of times, then threats of punishment may deter cheating.
With a tit-for-tat strategy, if one firm cheats in one period, the other firm refuses to cooperate indefinitely.
Which of the following statements about price leadership is false?
With barometric price leadership, the leader may change even if the relative size of each firm stays the same.
Price leadership breaks down if input prices or demand conditions change.
Price leadership is a form of tacit collusion.
With dominant price leadership, the leader in an industry is the biggest firm.
Which of the following outcomes could not occur in a game with two Players who each have two available strategies?
A game where only one player has a dominant strategy.
A game where neither player has a dominant strategy.
A game where one player has two dominant strategies.
A game where the combined payoff for the two players is the same with every possible combination of strategies.
Which of the following best describes the concept of a speculative bubble?
.
Asset price strongly exceeds its intrinsic value.
Inflation rate exceeds 100% a year.
Unemployment rate exceeds 30% .
The Central Bank decreases interest rate more than by 50 basis points.
NiceCream, Inc. is a monopolist at the market of ice creams in town N. It enjoys the monopoly profit with the demand function given by D = 100 − P and constant marginal cost MC < 100. Another firm with the same technology is going to enter the market, in this case, the firms will compete by choosing their outputs simultaneously. Choose the correct statement:
The sum of profits of the two firms will be greater than the NiceCream’s profit before entry
The sum of outputs of the two firms will be greater than the NiceCream’s output before entry
The ice cream price after entry will be higher than before entry
None of the other statements is true
Country A's statistical agency has revealed the following data about the country's economy in 2019:
● GDP = 11000
● Private consumption (C) = 5000
● Investment (I) = 3000
● Import (Im) = 1000
● Taxes collected = 500
What can we infer from this information about government spending (G)?
G = 0
G = 1000
G = 3000
Impossible to tell
Globalization during the late 19th century involved the exchange of agricultural and manufactured goods between land-abundant/labor-scarce countries and labor-abundant/land-scarce countries. Based on this information, which of the following statements is correct?
As a result of specialization, France would export agricultural goods and import manufactured goods
In Russia, the workers would be the winners while the land-owners would be the losers
The U.S. would see the ratio of wages to land rents fall
German workers would demand tariffs on agricultural imports
A bond that matures 3 years from now has a face value of 100 and matures 3 years from now. Estimate the interest rate if the current price of this bond is 91.
r ≈ 1%
r ≈ 3%
r ≈ 5%
r ≈ 10%
In April 2020, the WTI oil futures contract fell below zero. This happened because…
Oil was needed less because the world is switching to 'green' sources of energy.
Futures trading was temporarily prohibited after multiple substantial frauds were discovered.
Demand for oil fell due to the COVID-19 pandemic while supply failed to decrease because OPEC+ failed to sustain the agreement.
Major oil producers ran out of oil to extract.
Which of the following distincts the COVID-19 economic crisis from all other major crises of the last 100 years?
A significant part of the economic decline was caused by government policies intentionally aimed at slowing down the economies.
No monetary policies were implemented in response.
The crisis started in one country and continued worldwide.
The crisis will last longer than a year
Firm X uses capital and labor to produce its final product. For every unit of a product, 1 unit of capital and 2 units of labor are needed. If labor and capital both cost $2 per unit, what is the marginal cost of producing the 18'th unit of a product?
$0
$2
$3
$6
Choose the correct statement regarding economic growth:
Economic growth in all countries of the world has had the same pace in all countries for the last few decades
Compared to the pace of the 20th century, economic growth in the world was very slow before 1700
Economic growth is defined as a long-lasting increase in the country’s nominal GDP
All the differences in the pace of economic growth between countries can be explained by their geographical location
All prices in the economy have grown by 12% over the last year, Zoe's income has grown by 6%. Pick the right sentence.
Zoe's real income has increased by roughly 9%.
Zoe's real income has decreased by roughly 6%.
Zoe's real income remains the same.
Zoe's real income has increased by roughly 6%.
Which of the following is typically not a role of a central bank?
The executor of monetary policy
Lender of last resort
The sole issuer of legal tender
All other options are typical CB’s roles
The product of two numbers is 36 and their sum is 37. What is their di erence?
35
4
10
26
Captain Sparrow and his pirate crew dug up several gold coins. They divide the coins amongst themselves so that each person gets the same number of coins. If there were four fewer pirates, then each person would get 10 more coins. However, if there were 50 fewer coins, then each person would get 5 fewer coins. How many coins dig they dig up?
80
100
120
150
The average of two positive numbers is 30% less than one of them. By what percentage is the average greater than the other number?
75%
70%
30%
25%
Liz and Mary compete in solving problems. Each of them is given the same list of 100 problems. For any problem, the rst of them to solve it gets 4 points, while the second to solve it gets 1 point. Liz solved 60 problems, and Mary also solved 60 problems. Together, they got 312
points. How many problems were solved by both of them?
53
54
55
56
