Question 1

The law of demand states that,holding all else constant:

Accepted Answer

A)  as price falls, demand will fall also. 
B)  as price rises, demand will also rise. 
C)  price has no effect on quantity demanded. 
D)  as price falls, quantity demanded rises. 
A)  as price falls, demand will fall also. 
B)  as price rises, demand will also rise. 
C)  price has no effect on quantity demanded. 
D)  as price falls, quantity demanded rises.

Question 2

Which of the following are least likely to be substitutes?

Accepted Answer

A)  Chicken and beef 
B)  Cars and trucks 
C)  Automobile and housing 
D)  Automobile and gasoline 
A)  Chicken and beef 
B)  Cars and trucks 
C)  Automobile and housing 
D)  Automobile and gasoline

Question 3

Which of the following is NOT a supply shifter?

Accepted Answer

A)  Level of technology 
B)  Prices of inputs 
C)  Average income level 
D)  Weather 
A)  Level of technology 
B)  Prices of inputs 
C)  Average income level 
D)  Weather

Question 4

Suppose the supply curve for a product is given by Qsx = −300 + 4Px + 2Pz and Px = 30,Pz = 40.
a.How much X is produced?
b.What is the inverse supply curve for X given the above information?
c.Graph this supply curve.
d.Show what happens to this supply curve if the price of Z goes up by $10.

Accepted Answer

a.Q^s_x = −300 + 4(30)+ 2(40)= −100.Since ne

Question 5

As additional firms enter an industry,the market supply curve:

Accepted Answer

A)  shifts to the right. 
B)  shifts to the left. 
C)  remains the same. 
D)  None of the statements associated with this question are correct. 
A)  shifts to the right. 
B)  shifts to the left. 
C)  remains the same. 
D)  None of the statements associated with this question are correct.

Question 6

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Accepted Answer

A ban on advertising will like

Question 7

Under a price ceiling,the full economic price is:

Accepted Answer

A)  the dollar price paid to the firm. 
B)  the opportunity cost of not being able to buy a good when a consumer needs it. 
C)  lower than the free-market price. 
D)  higher than the free-market price. 
A)  the dollar price paid to the firm. 
B)  the opportunity cost of not being able to buy a good when a consumer needs it. 
C)  lower than the free-market price. 
D)  higher than the free-market price.

Question 8

The federal government recently decided to raise the excise tax on hard liquor.
a.Graphically illustrate the effects of this tax on the market for hard liquor.
b.Would a $1 increase in the excise tax on liquor increase the equilibrium price of liquor by $1?
 
c.How would the excise tax on hard liquor affect a beer distributor?

Accepted Answer

@#IMG-DLM& a.As can be seen from the figure shown

Question 9

Recently,the Brazilian Association of Citrus Exports (Abecitrus)announced that orange production would be down 25 percent this year because of poor weather conditions,disease,and tree stress resulting from three straight bumper crops.What effect will the decreased production of oranges have on the demand for tomato juice?

Accepted Answer

A 25 percent reduction in the production

Question 10

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

Accepted Answer

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

Question 11

If the price of good X becomes lower,then the level of consumer surplus becomes

Accepted Answer

A)  lower. 
B)  higher. 
C)  unchanged. 
D)  lower in the short run but higher in the long run. 
A)  lower. 
B)  higher. 
C)  unchanged. 
D)  lower in the short run but higher in the long run.

Question 12

Persuasive advertising influences demand by:

Accepted Answer

A)  providing information about the availability of a product. 
B)  offering reduced prices for the product. 
C)  altering the underlying tastes of consumers. 
D)  None of the statements are correct. 
A)  providing information about the availability of a product. 
B)  offering reduced prices for the product. 
C)  altering the underlying tastes of consumers. 
D)  None of the statements are correct.

Question 13

Suppose both supply and demand decrease.What effect will this have on price?

Accepted Answer

A)  It will fall. 
B)  It will rise. 
C)  It may rise or fall. 
D)  It will remain the same. 
A)  It will fall. 
B)  It will rise. 
C)  It may rise or fall. 
D)  It will remain the same.

Question 14

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

Accepted Answer

A)  $100. 
B)  $20,000. 
C)  $40,000. 
D)  This cannot be determined from the information contained in the question. 
A)  $100. 
B)  $20,000. 
C)  $40,000. 
D)  This cannot be determined from the information contained in the question.

Question 15

Producer surplus is the:

Accepted Answer

A)  area above the supply curve but below the demand curve. 
B)  area above the supply curve but below the market price of the good. 
C)  minimum amount required by a producer for producing the good. 
D)  maximum amount a producer can collect from consumers. 
A)  area above the supply curve but below the demand curve. 
B)  area above the supply curve but below the market price of the good. 
C)  minimum amount required by a producer for producing the good. 
D)  maximum amount a producer can collect from consumers.

Question 16

If good A is an inferior good,an increase in income leads to:

Accepted Answer

A) a decrease in the demand for good B. 
B) a decrease in the demand for good A. 
C) an increase in the demand for good A. 
D) no change in the quantity demanded for good A. 
A) a decrease in the demand for good B. 
B) a decrease in the demand for good A. 
C) an increase in the demand for good A. 
D) no change in the quantity demanded for good A.

Question 17

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

Accepted Answer

A)  the lower the producer surplus. 
B)  the greater the producer surplus. 
C)  the higher the supply. 
D)  the lower the supply. 
A)  the lower the producer surplus. 
B)  the greater the producer surplus. 
C)  the higher the supply. 
D)  the lower the supply.

Question 18

Which of the following pairs of goods are probably complements?

Accepted Answer

A)  Televisions and roller skates 
B)  Frozen yogurt and ice cream 
C)  Steak and chicken 
D)  Hamburgers and ketchup 
A)  Televisions and roller skates 
B)  Frozen yogurt and ice cream 
C)  Steak and chicken 
D)  Hamburgers and ketchup

Question 19

Suppose the supply of good X is given by Qsx = 10 + 2Px.How many units of good X are produced if the price of good X is 20?

Accepted Answer

A)  10 
B)  20 
C)  30 
D)  None of the statements associated with this question are correct. 
A)  10 
B)  20 
C)  30 
D)  None of the statements associated with this question are correct.

Question 20

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive,then:

Accepted Answer

A)  goods y and x are complements. 
B)  goods y and x are inferior goods. 
C)  goods y and x are normal goods. 
D)  goods y and x are substitutes. 
A)  goods y and x are complements. 
B)  goods y and x are inferior goods. 
C)  goods y and x are normal goods. 
D)  goods y and x are substitutes.

The law of demand states that,holding all else constant:

Which of the following are least likely to be substitutes?

Which of the following is NOT a supply shifter?

Suppose the supply curve for a product is given by Q^s_x = −300 + 4P_x + 2P_z and P_x = 30,P_z = 40. a.How much X is produced? b.What is the inverse supply curve for X given the above information? c.Graph this supply curve. d.Show what happens to this supply curve if the price of Z goes up by $10.

As additional firms enter an industry,the market supply curve:

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Under a price ceiling,the full economic price is:

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

If the price of good X becomes lower,then the level of consumer surplus becomes

Persuasive advertising influences demand by:

Suppose both supply and demand decrease.What effect will this have on price?

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 producers' revenue from X is:

Producer surplus is the:

If good A is an inferior good,an increase in income leads to:

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

Which of the following pairs of goods are probably complements?

Suppose the supply of good X is given by Q^s_x = 10 + 2P_x.How many units of good X are produced if the price of good X is 20?

Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive,then:

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 law of demand states that,holding all else constant:

Which of the following are least likely to be substitutes?

Which of the following is NOT a supply shifter?

Suppose the supply curve for a product is given by Qsx = −300 + 4Px + 2Pz and Px = 30,Pz = 40. a.How much X is produced? b.What is the inverse supply curve for X given the above information? c.Graph this supply curve. d.Show what happens to this supply curve if the price of Z goes up by $10.

As additional firms enter an industry,the market supply curve:

Russian state television has imposed a temporary ban on all TV commercials.Your firm specializes in exports to Russia.Ninety percent of its sales consist of consumer goods shipped to Russia.Your supervisor wants to know the likely impact of the ban on your firm's operations.What do you tell her?

Under a price ceiling,the full economic price is:

Suppose that good X is a substitute for good Y.Then an increase in the price of good Y leads to

If the price of good X becomes lower,then the level of consumer surplus becomes

Persuasive advertising influences demand by:

Suppose both supply and demand decrease.What effect will this have on price?

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

Producer surplus is the:

If good A is an inferior good,an increase in income leads to:

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

Which of the following pairs of goods are probably complements?

Suppose the supply of good X is given by Qsx = 10 + 2Px.How many units of good X are produced if the price of good X is 20?

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive,then:

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

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 producers' revenue from X is:

Suppose the supply of good X is given by Q^s_x = 10 + 2P_x.How many units of good X are produced if the price of good X is 20?

Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive,then: