Question 1

The seller side of the market is known as the:

Accepted Answer

A)  income side. 
B)  demand side. 
C)  supply side. 
D)  seller side. 
A)  income side. 
B)  demand side. 
C)  supply side. 
D)  seller side.

Question 2

In a competitive market,the market demand is Qd = 60 − 6P and the market supply is Qs = 4P.A price ceiling of $3 will result in a:

Accepted Answer

A)  shortage of 30 units. 
B)  shortage of 15 units. 
C)  surplus of 30 units. 
D)  surplus of 12 units. 
A)  shortage of 30 units. 
B)  shortage of 15 units. 
C)  surplus of 30 units. 
D)  surplus of 12 units.

Question 3

Good X is an inferior good if a decrease in income leads to:

Accepted Answer

A)  an increase in the supply of good X. 
B)  a decrease in the supply of good X. 
C)  an increase in the demand for good X. 
D)  a decrease in the demand for good X. 
A)  an increase in the supply of good X. 
B)  a decrease in the supply of good X. 
C)  an increase in the demand for good X. 
D)  a decrease in the demand for good X.

Question 4

Other things held constant,the greater the price of a good:

Accepted Answer

A)  the lower the demand. 
B)  the higher the demand. 
C)  the greater the consumer surplus. 
D)  the lower the consumer surplus. 
A)  the lower the demand. 
B)  the higher the demand. 
C)  the greater the consumer surplus. 
D)  the lower the consumer surplus.

Question 5

A floor price is:

Accepted Answer

A)  the minimum legal price that can be charged in a market. 
B)  the maximum legal price that can be charged in a market. 
C)  below the initial market equilibrium price. 
D)  equal to the initial market equilibrium price. 
A)  the minimum legal price that can be charged in a market. 
B)  the maximum legal price that can be charged in a market. 
C)  below the initial market equilibrium price. 
D)  equal to the initial market equilibrium price.

Question 6

Suppose the demand for X is given by Qxd = 100 − 2PX + 4PY + 10M + 2A,where PX represents the price of good X,PY is the price of good Y,M is income,and A is the amount of advertising on good X.If advertising on good X increases by $10,000,then the demand for X will:

Accepted Answer

A)  decrease by $20,000. 
B)  decrease by $100,000. 
C)  increase by $100,000. 
D)  increase by $20,000. 
A)  decrease by $20,000. 
B)  decrease by $100,000. 
C)  increase by $100,000. 
D)  increase by $20,000.

Question 7

Suppose the market demand for good X is given by QXd = 20 - 2PX.If the equilibrium price of X is $5 per unit,then consumer surplus is:

Accepted Answer

A)  $100. 
B)  $75. 
C)  $50. 
D)  $25. 
A)  $100. 
B)  $75. 
C)  $50. 
D)  $25.

Question 8

Good Y is a complement to good X if an increase in the price of good Y leads to:

Accepted Answer

A)  an increase in the demand for good X. 
B)  an increase in the supply of good X. 
C)  a decrease in the demand for good X. 
D)  a decrease in the supply of good X. 
A)  an increase in the demand for good X. 
B)  an increase in the supply of good X. 
C)  a decrease in the demand for good X. 
D)  a decrease in the supply of good X.

Question 9

In early 1998,crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact do such lower crude oil prices have on the price of gasoline?

Accepted Answer

Since crude oil is an input to producing

Question 10

Which of the following can explain an increase in the demand for housing in retirement communities?

Accepted Answer

A)  A drop in real estate prices 
B)  An increase in the population of the elderly 
C)  A drop in the average age of retirees 
D)  Mandatory government legislation 
A)  A drop in real estate prices 
B)  An increase in the population of the elderly 
C)  A drop in the average age of retirees 
D)  Mandatory government legislation

Question 11

Suppose the market supply for good X is given by QXS = −100 + 5PX.If the equilibrium price of X is $100 per unit,then producer surplus is:

Accepted Answer

A)  $400. 
B)  $1,600. 
C)  $16,000. 
D)  None of the statements associated with this question are correct. 
A)  $400. 
B)  $1,600. 
C)  $16,000. 
D)  None of the statements associated with this question are correct.

Question 12

The law of demand indicates that as the price of a good increases,the quantity that:

Accepted Answer

A)  producers are willing to produce of an item increases. 
B)  producers are willing to produce of an item decreases. 
C)  buyers are able to purchase increases. 
D)  buyers are able to purchase decreases. 
A)  producers are willing to produce of an item increases. 
B)  producers are willing to produce of an item decreases. 
C)  buyers are able to purchase increases. 
D)  buyers are able to purchase decreases.

Question 13

Suppose good X is a normal good.Then a decrease in income would lead to:

Accepted Answer

A)  an outward shift of the demand curve. 
B)  an inward shift of the demand curve. 
C)  no shift of the demand curve. 
D)  a movement along the demand curve. 
A)  an outward shift of the demand curve. 
B)  an inward shift of the demand curve. 
C)  no shift of the demand curve. 
D)  a movement along the demand curve.

Question 14

Which of the following are least likely to be complements?

Accepted Answer

A)  Peanut butter and jelly 
B)  Bread and butter 
C)  Sports coats and dress slacks 
D)  Cars and trucks 
A)  Peanut butter and jelly 
B)  Bread and butter 
C)  Sports coats and dress slacks 
D)  Cars and trucks

Question 15

If supply increases,then the:

Accepted Answer

A)  supply curve shifts to the left. 
B)  equilibrium price goes down. 
C)  equilibrium quantity goes down. 
D)  demand curve shifts to the right. 
A)  supply curve shifts to the left. 
B)  equilibrium price goes down. 
C)  equilibrium quantity goes down. 
D)  demand curve shifts to the right.

Question 16

Changes in the prices of other goods lead to:

Accepted Answer

A)  a change in quantity demanded. 
B)  a change in demand. 
C)  no change in the demand curve. 
D)  a movement along the demand curve. 
A)  a change in quantity demanded. 
B)  a change in demand. 
C)  no change in the demand curve. 
D)  a movement along the demand curve.

Question 17

The minimum legal price that can be charged in a market is:

Accepted Answer

A)  a price floor. 
B)  a price ceiling. 
C)  non-pecuniary price. 
D)  full economic price. 
A)  a price floor. 
B)  a price ceiling. 
C)  non-pecuniary price. 
D)  full economic price.

Question 18

Consider a market characterized by the following inverse demand and supply functions: PX = 10 − 2QX and PX = 2 + 2QX. Compute the number of units exchanged and the price at which those units will be exchanged when there is an $8 per unit price floor.

Accepted Answer

A)  1 unit and $6 per unit 
B)  1 unit and $8 per unit 
C)  3 units and $6 per unit 
D)  3 units and $8 per unit 
A)  1 unit and $6 per unit 
B)  1 unit and $8 per unit 
C)  3 units and $6 per unit 
D)  3 units and $8 per unit

Question 19

The demand curve for product X is given by QX = 50 - 2PX.How much consumer surplus do consumers receive when PX = $5?

Accepted Answer

A)  $400 
B)  $200 
C)  $100 
D)  $500 
A)  $400 
B)  $200 
C)  $100 
D)  $500

Question 20

Given a linear supply function of the form QXS = 3,000 + 3PX − 2Pr − Pw,find the inverse linear supply function,assuming Pr = $1,000 and Pw = $100.

Accepted Answer

A)  QXS = 900 + 3PX 
B)  PX = 300 + 0.3333QX 
C)  PX = −300 + 0.3333QX 
D)  PX = 2,900 + 3PX 
A)  QXS = 900 + 3PX 
B)  PX = 300 + 0.3333QX 
C)  PX = −300 + 0.3333QX 
D)  PX = 2,900 + 3PX

The seller side of the market is known as the:

In a competitive market,the market demand is Q^d = 60 − 6P and the market supply is Q^s = 4P.A price ceiling of $3 will result in a:

Good X is an inferior good if a decrease in income leads to:

Other things held constant,the greater the price of a good:

A floor price is:

Suppose the demand for X is given by Q_x^d = 100 − 2P_X + 4P_Y + 10M + 2A,where P_X represents the price of good X,P_Y is the price of good Y,M is income,and A is the amount of advertising on good X.If advertising on good X increases by $10,000,then the demand for X will:

Suppose the market demand for good X is given by Q_X^d = 20 - 2P_X.If the equilibrium price of X is $5 per unit,then consumer surplus is:

Good Y is a complement to good X if an increase in the price of good Y leads to:

In early 1998,crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact do such lower crude oil prices have on the price of gasoline?

Which of the following can explain an increase in the demand for housing in retirement communities?

Suppose the market supply for good X is given by Q_X^S = −100 + 5P_X.If the equilibrium price of X is $100 per unit,then producer surplus is:

The law of demand indicates that as the price of a good increases,the quantity that:

Suppose good X is a normal good.Then a decrease in income would lead to:

Which of the following are least likely to be complements?

If supply increases,then the:

Changes in the prices of other goods lead to:

The minimum legal price that can be charged in a market is:

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 − 2Q_X and P_X = 2 + 2Q_X. Compute the number of units exchanged and the price at which those units will be exchanged when there is an $8 per unit price floor.

The demand curve for product X is given by Q_X = 50 - 2P_X.How much consumer surplus do consumers receive when P_X = $5?

Given a linear supply function of the form Q_X^S = 3,000 + 3P_X − 2P_r − P_w,find the inverse linear supply function,assuming P_r = $1,000 and P_w = $100.

The Fundamentals of Managerial Economics

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 2: Market Forces: Demand and Supply

The seller side of the market is known as the:

In a competitive market,the market demand is Qd = 60 − 6P and the market supply is Qs = 4P.A price ceiling of $3 will result in a:

Good X is an inferior good if a decrease in income leads to:

Other things held constant,the greater the price of a good:

A floor price is:

Suppose the demand for X is given by Qxd = 100 − 2PX + 4PY + 10M + 2A,where PX represents the price of good X,PY is the price of good Y,M is income,and A is the amount of advertising on good X.If advertising on good X increases by $10,000,then the demand for X will:

Suppose the market demand for good X is given by QXd = 20 - 2PX.If the equilibrium price of X is $5 per unit,then consumer surplus is:

Good Y is a complement to good X if an increase in the price of good Y leads to:

In early 1998,crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact do such lower crude oil prices have on the price of gasoline?

Which of the following can explain an increase in the demand for housing in retirement communities?

Suppose the market supply for good X is given by QXS = −100 + 5PX.If the equilibrium price of X is $100 per unit,then producer surplus is:

The law of demand indicates that as the price of a good increases,the quantity that:

Suppose good X is a normal good.Then a decrease in income would lead to:

Which of the following are least likely to be complements?

If supply increases,then the:

Changes in the prices of other goods lead to:

The minimum legal price that can be charged in a market is:

Consider a market characterized by the following inverse demand and supply functions: PX = 10 − 2QX and PX = 2 + 2QX. Compute the number of units exchanged and the price at which those units will be exchanged when there is an $8 per unit price floor.

The demand curve for product X is given by QX = 50 - 2PX.How much consumer surplus do consumers receive when PX = $5?

Given a linear supply function of the form QXS = 3,000 + 3PX − 2Pr − Pw,find the inverse linear supply function,assuming Pr = $1,000 and Pw = $100.

The Fundamentals of Managerial Economics

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

In a competitive market,the market demand is Q^d = 60 − 6P and the market supply is Q^s = 4P.A price ceiling of $3 will result in a:

Suppose the demand for X is given by Q_x^d = 100 − 2P_X + 4P_Y + 10M + 2A,where P_X represents the price of good X,P_Y is the price of good Y,M is income,and A is the amount of advertising on good X.If advertising on good X increases by $10,000,then the demand for X will:

Suppose the market demand for good X is given by Q_X^d = 20 - 2P_X.If the equilibrium price of X is $5 per unit,then consumer surplus is:

Suppose the market supply for good X is given by Q_X^S = −100 + 5P_X.If the equilibrium price of X is $100 per unit,then producer surplus is:

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 − 2Q_X and P_X = 2 + 2Q_X. Compute the number of units exchanged and the price at which those units will be exchanged when there is an $8 per unit price floor.

The demand curve for product X is given by Q_X = 50 - 2P_X.How much consumer surplus do consumers receive when P_X = $5?

Given a linear supply function of the form Q_X^S = 3,000 + 3P_X − 2P_r − P_w,find the inverse linear supply function,assuming P_r = $1,000 and P_w = $100.