Question 1

The curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

Accepted Answer

A)  market demand curve. 
B)  consumer surplus curve. 
C)  average cost curve. 
D)  market supply curve. 
A)  market demand curve. 
B)  consumer surplus curve. 
C)  average cost curve. 
D)  market supply curve.

Question 2

Suppose market demand and supply are given by Qd = 300 - 4P and QS = -50 + 3P. The equilibrium price is:

Accepted Answer

A)  $35. 
B)  $40. 
C)  $50. 
D)  $60. 
A)  $35. 
B)  $40. 
C)  $50. 
D)  $60.

Question 3

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 4

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. Good X is

Accepted Answer

A)  an inferior good. 
B)  a normal good. 
C)  a Giffen good. 
D)  a complement. 
A)  an inferior good. 
B)  a normal good. 
C)  a Giffen good. 
D)  a complement.

Question 5

Caviar and champagne are complements. Recently pollution has been a problem in the Volga River, where much of the world's caviar originates. The sturgeon that live in these waters are laying fewer eggs than before. Show graphically and explain the effects on the market for caviar and the market for champagne.

Accepted Answer

@#IMG-DLM& Figure 2-2(a)
The pollution problem shi

Question 6

The demand function

Accepted Answer

A)  describes how much of good X will be purchased at the alternative price of good X, given all the other variables being constant. 
B)  recognizes that the quantity of a good consumed depends on its price and demand shifters. 
C)  shows the relationship between the quantity demanded of X and variables other than its price. 
D)  does not include expectations. 
A)  describes how much of good X will be purchased at the alternative price of good X, given all the other variables being constant. 
B)  recognizes that the quantity of a good consumed depends on its price and demand shifters. 
C)  shows the relationship between the quantity demanded of X and variables other than its price. 
D)  does not include expectations.

Question 7

If steak is a normal good, what do you suppose would happen to price and quantity during an economic recession?

Accepted Answer

A)  Price would increase and quantity decrease. 
B)  Price and quantity would both increase. 
C)  Price and quantity would both decrease. 
D)  Price would decrease and quantity increase. 
A)  Price would increase and quantity decrease. 
B)  Price and quantity would both increase. 
C)  Price and quantity would both decrease. 
D)  Price would decrease and quantity increase.

Question 8

The demand function recognizes that the quantity of a good consumed depends on:

Accepted Answer

A)  the prices of other goods only. 
B)  price and supply shifters. 
C)  demand shifters and price. 
D)  demand shifters only. 
A)  the prices of other goods only. 
B)  price and supply shifters. 
C)  demand shifters and price. 
D)  demand shifters only.

Question 9

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. An $8 per unit price floor will result in a

Accepted Answer

A)  shortage of 1 unit. 
B)  surplus of 2 units. 
C)  shortage of 3 units. 
D)  surplus of 3 units. 
A)  shortage of 1 unit. 
B)  surplus of 2 units. 
C)  shortage of 3 units. 
D)  surplus of 3 units.

Question 10

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the loss in social welfare when an $8 per unit price floor is imposed on the market.

Accepted Answer

A)  $0. 
B)  $1. 
C)  $2. 
D)  $3. 
A)  $0. 
B)  $1. 
C)  $2. 
D)  $3.

Question 11

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 12

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Accepted Answer

A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  become steeper. 
A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  become steeper.

Question 13

Suppose that supply increases and demand decreases. What effect will this have on price and quantity?

Accepted Answer

A)  Price will increase and quantity may rise or fall. 
B)  Price will decrease and quantity will increase. 
C)  Price will decrease and quantity will decrease. 
D)  None of the statements associated with this question are correct. 
A)  Price will increase and quantity may rise or fall. 
B)  Price will decrease and quantity will increase. 
C)  Price will decrease and quantity will decrease. 
D)  None of the statements associated with this question are correct.

Question 14

For a wood furniture manufacturer, an increase in the cost of lumber will cause the supply curve to:

Accepted Answer

A)  become flatter. 
B)  become steeper. 
C)  shift to the left. 
D)  shift to the right. 
A)  become flatter. 
B)  become steeper. 
C)  shift to the left. 
D)  shift to the right.

Question 15

Changes in the price 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 16

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.

Question 17

Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If a price ceiling of $15 is imposed,

Accepted Answer

A)  there will be a surplus of 40 units. 
B)  there will be neither a surplus or shortage. 
C)  there will be a shortage of 40 units. 
D)  there will be a shortage of 20 units. 
A)  there will be a surplus of 40 units. 
B)  there will be neither a surplus or shortage. 
C)  there will be a shortage of 40 units. 
D)  there will be a shortage of 20 units.

Question 18

Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be:

Accepted Answer

A)  $1,650. 
B)  $1,375. 
C)  $900. 
D)  $1,125. 
A)  $1,650. 
B)  $1,375. 
C)  $900. 
D)  $1,125.

Question 19

Which of the following is a linear demand function?

Accepted Answer

A)  Qxd = α0 + αXPX + αYPY + αMM + αHH. 
B)  Qxd = αPXαX PYαY MαM HαH. 
C)  Qxd = α0 + αXPX2 + αYPY2 + αMM2 + αMH2. 
D)  Qxd = α + αX log PX + αY log PY + αM log M + αM log H. 
A)  Qxd = α0 + αXPX + αYPY + αMM + αHH. 
B)  Qxd = αPXαX PYαY MαM HαH. 
C)  Qxd = α0 + αXPX2 + αYPY2 + αMM2 + αMH2. 
D)  Qxd = α + αX log PX + αY log PY + αM log M + αM log H.

Question 20

Suppose both supply and demand increase. What effect will this have on the equilibrium quantity?

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.

The curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

Suppose market demand and supply are given by Q^d = 300 - 4P and Q^S = -50 + 3P. The equilibrium price is:

The seller side of the market is known as the:

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. Good X is

The demand function

If steak is a normal good, what do you suppose would happen to price and quantity during an economic recession?

The demand function recognizes that the quantity of a good consumed depends on:

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 - 2Q_X and P_X = 2 + 2Q_X. An $8 per unit price floor will result in a

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 loss in social welfare when an $8 per unit price floor is imposed on the market.

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

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Suppose that supply increases and demand decreases. What effect will this have on price and quantity?

For a wood furniture manufacturer, an increase in the cost of lumber will cause the supply curve to:

Changes in the price of other goods lead to

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:

Suppose market demand and supply are given by Q^d = 100 - 2P and Q^S = 5 + 3P. If a price ceiling of $15 is imposed,

Suppose market demand and supply are given by Q^d = 100 - 2P and Q^S = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be:

Which of the following is a linear demand function?

Suppose both supply and demand increase. What effect will this have on the equilibrium quantity?

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 curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

Suppose market demand and supply are given by Qd = 300 - 4P and QS = -50 + 3P. The equilibrium price is:

The seller side of the market is known as the:

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. Good X is

The demand function

If steak is a normal good, what do you suppose would happen to price and quantity during an economic recession?

The demand function recognizes that the quantity of a good consumed depends on:

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. An $8 per unit price floor will result in a

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the loss in social welfare when an $8 per unit price floor is imposed on the market.

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

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Suppose that supply increases and demand decreases. What effect will this have on price and quantity?

For a wood furniture manufacturer, an increase in the cost of lumber will cause the supply curve to:

Changes in the price of other goods lead to

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

Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If a price ceiling of $15 is imposed,

Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be:

Which of the following is a linear demand function?

Suppose both supply and demand increase. What effect will this have on the equilibrium quantity?

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 market demand and supply are given by Q^d = 300 - 4P and Q^S = -50 + 3P. The equilibrium 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. Good X is

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 - 2Q_X and P_X = 2 + 2Q_X. An $8 per unit price floor will result in a

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 loss in social welfare when an $8 per unit price floor is imposed on the market.

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:

Suppose market demand and supply are given by Q^d = 100 - 2P and Q^S = 5 + 3P. If a price ceiling of $15 is imposed,

Suppose market demand and supply are given by Q^d = 100 - 2P and Q^S = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be: