Question 1

​A product can be classified as an inferior good if an increase in the income causes

Accepted Answer

A) ​A decrease in the quantity demanded 
B) A decrease in demand 
C) An increase in demand 
D) ​An increase in the quantity demanded. 
A) ​A decrease in the quantity demanded 
B) A decrease in demand 
C) An increase in demand 
D) ​An increase in the quantity demanded.

Question 2

The government decided to reduce taxes on fast-food to increase revenue.The government assumes that fast-food products have

Accepted Answer

A) ​An inelastic demand 
B) An elastic demand 
C) A demand curve that is upward sloping 
D) ​Unitary elastic demand curve 
A) ​An inelastic demand 
B) An elastic demand 
C) A demand curve that is upward sloping 
D) ​Unitary elastic demand curve

Question 3

​If MR<MC,then the firm should

Accepted Answer

A) ​increase production 
B) decrease production 
C) keep the prices constant 
D) ​keep the production level constant 
A) ​increase production 
B) decrease production 
C) keep the prices constant 
D) ​keep the production level constant

Question 4

Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would:

Accepted Answer

A) ​lower tax revenue in both the short and long run. 
B) raise tax revenue in both the short and long run. 
C) raise tax revenue in the short run but lower tax revenue in the long run. 
D) ​lower tax revenue in the short run but raise tax revenue in the long run. 
A) ​lower tax revenue in both the short and long run. 
B) raise tax revenue in both the short and long run. 
C) raise tax revenue in the short run but lower tax revenue in the long run. 
D) ​lower tax revenue in the short run but raise tax revenue in the long run.

Question 5

The manager of a gas station noticed that when prices in the convenience store of the gas station decreased,gas sales increased.This could possibly be because the convenience store products are

Accepted Answer

A) ​usually complements to the gas sales 
B) usually substitutes to the gas sales 
C) usually unrelated to the gas sales 
D) ​none of the above 
A) ​usually complements to the gas sales 
B) usually substitutes to the gas sales 
C) usually unrelated to the gas sales 
D) ​none of the above

Question 6

​What is an aggregate demand curve

Accepted Answer

A) ​The demand of an individual with respect to price 
B) The total demand of the market with respect to price of a good 
C) The preference of an individual in the market 
D) ​None of the above 
A) ​The demand of an individual with respect to price 
B) The total demand of the market with respect to price of a good 
C) The preference of an individual in the market 
D) ​None of the above

Question 7

​In general,the larger 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.

A product can be classified as an inferior good if an increase in the income causes

The government decided to reduce taxes on fast-food to increase revenue.The government assumes that fast-food products have

If MR<MC,then the firm should

Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would:

The manager of a gas station noticed that when prices in the convenience store of the gas station decreased,gas sales increased.This could possibly be because the convenience store products are

What is an aggregate demand curve

In general,the larger the price elasticity:

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

​A product can be classified as an inferior good if an increase in the income causes

The government decided to reduce taxes on fast-food to increase revenue.The government assumes that fast-food products have

​If MR<MC,then the firm should

Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would:

The manager of a gas station noticed that when prices in the convenience store of the gas station decreased,gas sales increased.This could possibly be because the convenience store products are

​What is an aggregate demand curve

​In general,the larger the price elasticity:

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

A product can be classified as an inferior good if an increase in the income causes

If MR<MC,then the firm should

What is an aggregate demand curve

In general,the larger the price elasticity: