Question 1

​The change in quantity demanded derived from a change in price is

Accepted Answer

A) ​the movement along a demand curve 
B) the movement along a supply curve 
C) a shift in the demand curve 
D) ​a shift in the supply curve 
A) ​the movement along a demand curve 
B) the movement along a supply curve 
C) a shift in the demand curve 
D) ​a shift in the supply curve

Question 2

​A market maker faces the following demand and supply for widgets.Eleven buyers are willing to buy at the following prices: $15,$14,$13,$12,$11,$10,$9,$8,$7,$6,$5.Eleven sellers are also willing to sell at the same prices.What is the equilibrium price in the market without the market maker

Accepted Answer

A) ​$12 
B) $11 
C) $10 
D) ​$9 
A) ​$12 
B) $11 
C) $10 
D) ​$9

Question 3

Financial Innovation
More and more of the back office tasks for commodity traders and market makers can be easily automated which lowers the costs of making transactions.What is the effect of these technical changes on the bid-ask spreads between commodity buyers and sellers at commodity exchanges?

Accepted Answer

The cost of making a market falls.This m

Question 4

​As the income of bus riders increased,the wages of bus drivers increased simultaneously.How does this affect the market for bus rides (inferior good)?

Accepted Answer

A) ​The demand curve will shift to the left;the supply curve will shift to the left 
B) The demand curve will shift to the left;the supply curve will shift to the right 
C) The demand curve will shift to the right;the supply curve will shift to the left 
D) ​The demand curve will shift to the right;the supply curve will shift to the right 
A) ​The demand curve will shift to the left;the supply curve will shift to the left 
B) The demand curve will shift to the left;the supply curve will shift to the right 
C) The demand curve will shift to the right;the supply curve will shift to the left 
D) ​The demand curve will shift to the right;the supply curve will shift to the right

Question 5

​Which of the following would shift the supply of Florida Oranges to the left?

Accepted Answer

A) ​a hurricane in Florida destroying a major part of the crop 
B) an increase in the price of water per unit,a major input,used to irrigate the orange trees 
C) one of the orange grooves shuts down 
D) ​all of the above 
A) ​a hurricane in Florida destroying a major part of the crop 
B) an increase in the price of water per unit,a major input,used to irrigate the orange trees 
C) one of the orange grooves shuts down 
D) ​all of the above

Question 6

​Which of these is an example of a controllable factor for a firm that sells pizzas

Accepted Answer

A) ​The price of the pizza 
B) The delivery rates of the pizza 
C) The quality of the wings sold by the street vendor across the street 
D) ​Both A & B 
A) ​The price of the pizza 
B) The delivery rates of the pizza 
C) The quality of the wings sold by the street vendor across the street 
D) ​Both A & B

Question 7

​An increase in income causes,the price for ipads _____________ and the quantity demanded for ipads ____________.

Accepted Answer

A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease 
A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease

Question 8

​How does an increase in income affect the market for iPads (normal good)?

Accepted Answer

A) ​The demand curve for iPads shifts to the right 
B) The demand curve for iPads shifts to the left 
C) The supply curve for iPads shifts to the right 
D) ​The supply curve for iPads shifts to the left 
A) ​The demand curve for iPads shifts to the right 
B) The demand curve for iPads shifts to the left 
C) The supply curve for iPads shifts to the right 
D) ​The supply curve for iPads shifts to the left

Question 9

​The wages for Nike workers increases.At the same time,we see the price for Adidas shoes increase.This would cause the price for Nike shoes_____________ and the quantity demanded for Nike shoes ____________.

Accepted Answer

A) ​Uncertain;decreases 
B) Decreases;increases 
C) Decreases;uncertain 
D) ​Increases;uncertain 
A) ​Uncertain;decreases 
B) Decreases;increases 
C) Decreases;uncertain 
D) ​Increases;uncertain

Question 10

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market.If there is a market maker in this market.What is the profit maximizing bid-ask spread per unit for a market maker?

Accepted Answer

A) ​$6 bid;$12 ask 
B) $7 bid;$11 ask 
C) $8 bid;$10 ask 
D) ​$9 bid;$9 ask 
A) ​$6 bid;$12 ask 
B) $7 bid;$11 ask 
C) $8 bid;$10 ask 
D) ​$9 bid;$9 ask

Question 11

Excess supply of a product exerts ___________pressure on prices​

Accepted Answer

A) ​Zero 
B) No 
C) Upward 
D) ​Downward 
A) ​Zero 
B) No 
C) Upward 
D) ​Downward

Question 12

​In the 1990s,many people had rising incomes.At the same time,there was a rise in the cost of lumber.This would cause the demand for houses to _________ and the supply for houses to_________.

Accepted Answer

A) ​Increase,increase 
B) Increase,decrease 
C) Decrease,increase 
D) ​Decrease,decrease 
A) ​Increase,increase 
B) Increase,decrease 
C) Decrease,increase 
D) ​Decrease,decrease

Question 13

A market maker faces the following demand and supply for widgets.Eleven buyers are willing to buy at the following prices: $15,$14,$13,$12,$11,$10,$9,$8,$7,$6,$5.Eleven sellers are also willing to sell at the same prices.If the market maker decides to only make one transaction what is his profit/bid-ask margin

Accepted Answer

A) ​$8 
B) $10 
C) $12 
D) ​$16 
A) ​$8 
B) $10 
C) $12 
D) ​$16

Question 14

​A recent medical study shows that peanuts are one of the leading causes of high cholesterol.This would cause the demand for peanuts to

Accepted Answer

A) ​Shift to the left 
B) Shift to the right 
C) go down the demand curve 
D) ​not change 
A) ​Shift to the left 
B) Shift to the right 
C) go down the demand curve 
D) ​not change

Question 15

​Excess demand of a product exerts __________pressure on prices

Accepted Answer

A) ​Zero 
B) No 
C) Upward 
D) ​Downward 
A) ​Zero 
B) No 
C) Upward 
D) ​Downward

Question 16

​An increase in the price of a complement shifts the demand curve to the

Accepted Answer

A) ​right 
B) left 
C) it does not change the demand curve 
D) ​none of the above 
A) ​right 
B) left 
C) it does not change the demand curve 
D) ​none of the above

Question 17

​In a market where the equilibrium price is $7,any price lower than $7 would cause

Accepted Answer

A) ​a balanced demand and supply 
B) an excess supply 
C) an excess demand 
D) ​none of the above 
A) ​a balanced demand and supply 
B) an excess supply 
C) an excess demand 
D) ​none of the above

Question 18

​If movie theatres decided to increase the price for the movie tickets,holding other factors constant,what would happen to the demand for popcorn in the theatres?

Accepted Answer

A) ​the demand for popcorn would shift to the left because popcorn and movies are substitute goods. 
B) the demand for popcorn would shift to the left because popcorn and movies are complementary goods. 
C) the demand for popcorn would shift to the right because popcorn and movies are substitute goods. 
D) ​the demand for popcorn would shift to the right because popcorn and movies are complementary goods. 
A) ​the demand for popcorn would shift to the left because popcorn and movies are substitute goods. 
B) the demand for popcorn would shift to the left because popcorn and movies are complementary goods. 
C) the demand for popcorn would shift to the right because popcorn and movies are substitute goods. 
D) ​the demand for popcorn would shift to the right because popcorn and movies are complementary goods.

Question 19

​At the equilibrium price

Accepted Answer

A) ​only sellers who value the product more than the equilibrium price would be willing to sell 
B) only buyers who value the product less than the equilibrium price would be willing to buy 
C) only buyers who value the product more than the equilibrium price would be willing to buy 
D) ​None of the parties would be willing to trade 
A) ​only sellers who value the product more than the equilibrium price would be willing to sell 
B) only buyers who value the product less than the equilibrium price would be willing to buy 
C) only buyers who value the product more than the equilibrium price would be willing to buy 
D) ​None of the parties would be willing to trade

Question 20

​Which of the following statements is true

Accepted Answer

A) ​in market equilibrium there are unconsummated value-creating transactions 
B) in market equilibrium there are unconsummated wealth-destroying transactions 
C) in market equilibrium there are no unconsummated wealth-creating transactions 
D) ​none of the above 
A) ​in market equilibrium there are unconsummated value-creating transactions 
B) in market equilibrium there are unconsummated wealth-destroying transactions 
C) in market equilibrium there are no unconsummated wealth-creating transactions 
D) ​none of the above

The change in quantity demanded derived from a change in price is

A market maker faces the following demand and supply for widgets.Eleven buyers are willing to buy at the following prices: $15,$14,$13,$12,$11,$10,$9,$8,$7,$6,$5.Eleven sellers are also willing to sell at the same prices.What is the equilibrium price in the market without the market maker

Financial Innovation More and more of the back office tasks for commodity traders and market makers can be easily automated which lowers the costs of making transactions.What is the effect of these technical changes on the bid-ask spreads between commodity buyers and sellers at commodity exchanges?

As the income of bus riders increased,the wages of bus drivers increased simultaneously.How does this affect the market for bus rides (inferior good)?

Which of the following would shift the supply of Florida Oranges to the left?

Which of these is an example of a controllable factor for a firm that sells pizzas

An increase in income causes,the price for ipads _ and the quantity demanded for ipads .

How does an increase in income affect the market for iPads (normal good)?

The wages for Nike workers increases.At the same time,we see the price for Adidas shoes increase.This would cause the price for Nike shoes_ and the quantity demanded for Nike shoes .

Excess supply of a product exerts ___________pressure on prices

In the 1990s,many people had rising incomes.At the same time,there was a rise in the cost of lumber.This would cause the demand for houses to _ and the supply for houses to_.

A recent medical study shows that peanuts are one of the leading causes of high cholesterol.This would cause the demand for peanuts to

Excess demand of a product exerts __________pressure on prices

An increase in the price of a complement shifts the demand curve to the

In a market where the equilibrium price is $7,any price lower than $7 would cause

If movie theatres decided to increase the price for the movie tickets,holding other factors constant,what would happen to the demand for popcorn in the theatres?

At the equilibrium price

Which of the following statements is true

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

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 7: Understanding Markets and Industry Changes