Question 1

​If the current margin is greater than the desired margin,the firm should

Accepted Answer

A) ​Increase price 
B) Decrease price 
C) Not change the price 
D) ​Marginal revenue and marginal cost are both zero 
A) ​Increase price 
B) Decrease price 
C) Not change the price 
D) ​Marginal revenue and marginal cost are both zero

Question 2

​Gas stations can price the products that they sell in their convenience store a little bit higher because

Accepted Answer

A) ​these products are usually complements to the gas sales and the demand for gas is inelastic 
B) these products are usually complements to the gas sales and the demand for gas is elastic 
C) these products are usually substitutes to the gas sales and the demand for gas is inelastic 
D) ​these products are usually substitutes to the gas sales and the demand for gas is elastic 
A) ​these products are usually complements to the gas sales and the demand for gas is inelastic 
B) these products are usually complements to the gas sales and the demand for gas is elastic 
C) these products are usually substitutes to the gas sales and the demand for gas is inelastic 
D) ​these products are usually substitutes to the gas sales and the demand for gas is elastic

Question 3

​Use the following table for question
  
-​If the government could raise taxes on one good,which product should the government increase tax rates in order to raise tax revenue?

Accepted Answer

A) ​Cigarettes 
B) Alcohol 
C) Sodas 
D) ​None of the above 
A) ​Cigarettes 
B) Alcohol 
C) Sodas 
D) ​None of the above

Question 4

​For substitutes,cross price elasticity of demand is:

Accepted Answer

A) ​Negative 
B) Positive 
C) between zero and one only 
D) ​zero. 
A) ​Negative 
B) Positive 
C) between zero and one only 
D) ​zero.

Question 5

​Jim recently graduated from college.His income increased dramatically;from$5000 a year to $60,000 a year.Jim decides that instead of using the bus,he would buy a car.This implies that

Accepted Answer

A) ​The car is a normal goods for Jim 
B) The car is an inferior goods for Jim 
C) The bus and the car are complementary for Jim 
D) ​Need information on the price of cars 
A) ​The car is a normal goods for Jim 
B) The car is an inferior goods for Jim 
C) The bus and the car are complementary for Jim 
D) ​Need information on the price of cars

Question 6

What is a normal good?​

Accepted Answer

A) ​A good whose demand increases when income decreases 
B) A good whose demand decreases when income decreases 
C) A good whose demand increases when price increases 
D) ​Both B&C 
A) ​A good whose demand increases when income decreases 
B) A good whose demand decreases when income decreases 
C) A good whose demand increases when price increases 
D) ​Both B&C

Question 7

​The demand for Nike shoes is _________________ than the demand for shoes in general.

Accepted Answer

A) ​More elastic 
B) More inelastic 
C) Less elastic 
D) ​Less inelastic 
A) ​More elastic 
B) More inelastic 
C) Less elastic 
D) ​Less inelastic

Question 8

​If the current margin is greater than the desired margin,

Accepted Answer

A) MR=MC B) MR>MC C) MRMC C) MR

Question 9

Coffee Mug Pricing
Manny's Merchandising can custom print logos onto coffee mugs.It sells it most popular style for $10 and has a marginal cost,including a blank mug and the printing,of $6.Manny recently ran a diff-in-diff experiment and determined your demand elasticity is -5.Should Manny raise or lower price?

Accepted Answer

Manny's current markup is (P-M

Question 10

​The price elasticity of demand for a printer is estimated to be 1 .This means that an increase in price by 10% will

Accepted Answer

A) ​Increase quantity demanded by 10% 
B) Decrease quantity demanded by 10% 
C) Increase demand by 10% 
D) ​Decrease demand by 10% 
A) ​Increase quantity demanded by 10% 
B) Decrease quantity demanded by 10% 
C) Increase demand by 10% 
D) ​Decrease demand by 10%

Question 11

​In general,the smaller the price elasticity:

Accepted Answer

A) ​the smaller the responsiveness of price to changes in quantity. 
B) the smaller the responsiveness of quantity to changes in price. 
C) the larger the responsiveness of price to changes in quantity. 
D) ​the larger the responsiveness of quantity to changes in price. 
A) ​the smaller the responsiveness of price to changes in quantity. 
B) the smaller the responsiveness of quantity to changes in price. 
C) the larger the responsiveness of price to changes in quantity. 
D) ​the larger the responsiveness of quantity to changes in price.

Question 12

​Its lunch time,you are hungry and would like to have some pizza.By the law of diminishing marginal value,

Accepted Answer

A) ​you would pay more for your first slice of pizza than your second 
B) you would pay more for your second slice of pizza than your first 
C) you would pay an equal amount of money for both the slices since they are identical 
D) ​none of the above 
A) ​you would pay more for your first slice of pizza than your second 
B) you would pay more for your second slice of pizza than your first 
C) you would pay an equal amount of money for both the slices since they are identical 
D) ​none of the above

Question 13

​You have the following demand schedule for cheeseburgers.Use the table for question
  
-​What is your total consumer surplus at the optimal consumption level?

Accepted Answer

A) ​$2 
B) $3 
C) $11.50 
D) ​$3.50 
A) ​$2 
B) $3 
C) $11.50 
D) ​$3.50

Question 14

​As the price of video games is raised from $20to $25,their quantity demanded fell from 1.5 million copies to 1 million copies. The price elasticity of demand for video games is:

Accepted Answer

A) ​-0.55 
B) -1.8 
C) -1.33 
D) ​-2.08 
A) ​-0.55 
B) -1.8 
C) -1.33 
D) ​-2.08

Question 15

​The demand for a product is more elastic

Accepted Answer

A) ​When it has few substitutes 
B) In the long-run 
C) When the expenditure on the product represent a small portion of the budget 
D) ​When the product is broadly defined 
A) ​When it has few substitutes 
B) In the long-run 
C) When the expenditure on the product represent a small portion of the budget 
D) ​When the product is broadly defined

Question 16

​What is the most likely effect of the development of XBOX with DVD capabilities on the DVD player industry?

Accepted Answer

A) ​Increased price elasticity of demand for the DVD player industry because XBOX are complements 
B) decreased price elasticity of demand for the DVD player industry because XBOX are complements 
C) Increased price elasticity of demand for the DVD player industry because XBOX are substitutes 
D) ​decreased price elasticity of demand for the DVD player industry because XBOX are substitutes 
A) ​Increased price elasticity of demand for the DVD player industry because XBOX are complements 
B) decreased price elasticity of demand for the DVD player industry because XBOX are complements 
C) Increased price elasticity of demand for the DVD player industry because XBOX are substitutes 
D) ​decreased price elasticity of demand for the DVD player industry because XBOX are substitutes

Question 17

​The demand for Dell laptops is more price elastic than the demand for laptops as a whole.This can be best explained by the fact that

Accepted Answer

A) ​There are fewer substitutes for Dell laptops than for laptops as whole 
B) There are more substitutes for Dell laptops than for laptops as whole 
C) Dell laptops are luxurious goods 
D) ​Dell laptops are a necessity 
A) ​There are fewer substitutes for Dell laptops than for laptops as whole 
B) There are more substitutes for Dell laptops than for laptops as whole 
C) Dell laptops are luxurious goods 
D) ​Dell laptops are a necessity

Question 18

Given that the own-price elasticity of demand for a brand of shoes is -2,if the price rises by 8%,what will happen to the quantity of shoes demanded?​

Accepted Answer

A) ​It will decrease by 16% 
B) It will increase by 16% 
C) It will decrease by 1.6% 
D) ​It will decrease by 1.6% 
A) ​It will decrease by 16% 
B) It will increase by 16% 
C) It will decrease by 1.6% 
D) ​It will decrease by 1.6%

Question 19

The quantity demanded of good X falls by 20% and,in response,your income goes down by 10% and,the income elasticity of demand would be:

Accepted Answer

A) ​2 
B) 4 
C) .5 
D) ​.20 
A) ​2 
B) 4 
C) .5 
D) ​.20

Question 20

What criteria do consumers apply when deciding whether or not to consume​

Accepted Answer

A) ​The consumer would consume only if the price is lower than his highest willingness to pay 
B) The consumer would only consume if his surplus is greater than zero 
C) The consumer would only consume if the price is higher than his highest willingness to pay 
D) ​Both A&B 
A) ​The consumer would consume only if the price is lower than his highest willingness to pay 
B) The consumer would only consume if his surplus is greater than zero 
C) The consumer would only consume if the price is higher than his highest willingness to pay 
D) ​Both A&B

If the current margin is greater than the desired margin,the firm should

Gas stations can price the products that they sell in their convenience store a little bit higher because

Use the following table for question -If the government could raise taxes on one good,which product should the government increase tax rates in order to raise tax revenue?

For substitutes,cross price elasticity of demand is:

Jim recently graduated from college.His income increased dramatically;from$5000 a year to $60,000 a year.Jim decides that instead of using the bus,he would buy a car.This implies that

What is a normal good?

The demand for Nike shoes is _________________ than the demand for shoes in general.

If the current margin is greater than the desired margin,

The price elasticity of demand for a printer is estimated to be 1 .This means that an increase in price by 10% will

In general,the smaller the price elasticity:

Its lunch time,you are hungry and would like to have some pizza.By the law of diminishing marginal value,

You have the following demand schedule for cheeseburgers.Use the table for question -What is your total consumer surplus at the optimal consumption level?

As the price of video games is raised from $20to $25,their quantity demanded fell from 1.5 million copies to 1 million copies. The price elasticity of demand for video games is:

The demand for a product is more elastic

What is the most likely effect of the development of XBOX with DVD capabilities on the DVD player industry?

The demand for Dell laptops is more price elastic than the demand for laptops as a whole.This can be best explained by the fact that

Given that the own-price elasticity of demand for a brand of shoes is -2,if the price rises by 8%,what will happen to the quantity of shoes demanded?

The quantity demanded of good X falls by 20% and,in response,your income goes down by 10% and,the income elasticity of demand would be:

What criteria do consumers apply when deciding whether or not to consume

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 5: Simple Pricing

​If the current margin is greater than the desired margin,the firm should

​Gas stations can price the products that they sell in their convenience store a little bit higher because

​Use the following table for question -​If the government could raise taxes on one good,which product should the government increase tax rates in order to raise tax revenue?

​For substitutes,cross price elasticity of demand is:

​Jim recently graduated from college.His income increased dramatically;from$5000 a year to $60,000 a year.Jim decides that instead of using the bus,he would buy a car.This implies that

What is a normal good?​

​The demand for Nike shoes is _________________ than the demand for shoes in general.

​If the current margin is greater than the desired margin,

​The price elasticity of demand for a printer is estimated to be 1 .This means that an increase in price by 10% will

​In general,the smaller the price elasticity:

​Its lunch time,you are hungry and would like to have some pizza.By the law of diminishing marginal value,

​You have the following demand schedule for cheeseburgers.Use the table for question -​What is your total consumer surplus at the optimal consumption level?

​As the price of video games is raised from $20to $25,their quantity demanded fell from 1.5 million copies to 1 million copies. The price elasticity of demand for video games is:

​The demand for a product is more elastic

​What is the most likely effect of the development of XBOX with DVD capabilities on the DVD player industry?

​The demand for Dell laptops is more price elastic than the demand for laptops as a whole.This can be best explained by the fact that

Given that the own-price elasticity of demand for a brand of shoes is -2,if the price rises by 8%,what will happen to the quantity of shoes demanded?​

The quantity demanded of good X falls by 20% and,in response,your income goes down by 10% and,the income elasticity of demand would be:

What criteria do consumers apply when deciding whether or not to consume​

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

If the current margin is greater than the desired margin,the firm should

Gas stations can price the products that they sell in their convenience store a little bit higher because

Use the following table for question -If the government could raise taxes on one good,which product should the government increase tax rates in order to raise tax revenue?

For substitutes,cross price elasticity of demand is:

Jim recently graduated from college.His income increased dramatically;from$5000 a year to $60,000 a year.Jim decides that instead of using the bus,he would buy a car.This implies that

What is a normal good?

The demand for Nike shoes is _________________ than the demand for shoes in general.

If the current margin is greater than the desired margin,

The price elasticity of demand for a printer is estimated to be 1 .This means that an increase in price by 10% will

In general,the smaller the price elasticity:

Its lunch time,you are hungry and would like to have some pizza.By the law of diminishing marginal value,

You have the following demand schedule for cheeseburgers.Use the table for question -What is your total consumer surplus at the optimal consumption level?

As the price of video games is raised from $20to $25,their quantity demanded fell from 1.5 million copies to 1 million copies. The price elasticity of demand for video games is:

The demand for a product is more elastic

What is the most likely effect of the development of XBOX with DVD capabilities on the DVD player industry?

The demand for Dell laptops is more price elastic than the demand for laptops as a whole.This can be best explained by the fact that

Given that the own-price elasticity of demand for a brand of shoes is -2,if the price rises by 8%,what will happen to the quantity of shoes demanded?

What criteria do consumers apply when deciding whether or not to consume