MBA 651 Final Exam || 100% Verified Solutions.
Suppose market demand and supply are given by Q d = 100 - 2P and Q S = 5 + 3P. The
equilibrium quantity is: correct answers 62.
Suppose the demand for good X is given by Qdx= 20 - 4Px + 2Py + M. The price of good X is
$5, the price of good Y is $15, and income is $150. Given these prices and income, how much of
good X will be purchased? correct answers 180
Jane pays the market price of $69 for a new pair of running shoes, even though she would be
happy to pay a maximum of $100 for the same pair of shoes. This is an example of the concept
of correct answers consumer surplus.
Suppose the demand for X is given by Q xd = 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. Based on this information, we know that good X is correct answers a
substitute for good Y and a normal good.
The demand function correct answers recognizes that the quantity of a good consumed depends
on its price and demand shifters.
Producer surplus is measured as the area correct answers above the supply curve and below the
market price.
As additional firms enter an industry, the market supply curve correct answers shifts to the right.
The supply function for good X is given by Q x s = 1,000 + PX - 5 PY - 2PW , where PX is the
price of X, PY is the price of good Y and PW is the price of input W. If PX = 100, PY = 150 PW
= 50, then the supply curve is correct answers Q x s = 150 + Px.
In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P. A
price ceiling of $4 will result in correct answers A shortage of 34 units.
Consumer surplus correct answers is the value consumers get from a good but do not pay for.
Suppose you produce wooden desks, and government legislation protecting the spotted owl has
made it more expensive for you to purchase wood. What do you expect to happen to the
equilibrium price and quantity of wooden desks? correct answers price will increase but quantity
will decrease.
Competitive market equilibrium correct answers is determined by the intersection of the market
demand and supply curves.
The supply function for good X is given by Q x s = 1,000 + PX - 5 PY - 2PW , where PX is the
price of X, PY is the price of good Y and PW is the price of input W. If the price of input W
increases by $10, then the supply of good X correct answers none of the above.
,Firms advertise in order to cause the demand for their products to correct answers shift to the
right.
An ad valorem tax shifts the supply curve correct answers by rotating it counter-clockwise.
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 correct answers A shortage of 30 units.
Suppose the demand for X is given by Q xd = 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. Based on this information, we know that good Y is correct answers a
substitute for good X.
All else held constant, as additional firms enter an industry correct answers more output is
available at each given price.
Technological advances will cause the supply curve to: correct answers shift to the right.
Advertising provides consumers with information about the underlying existence or quality of a
product. These types of advertising messages are called correct answers informative advertising.
An ad valorem tax causes supply curve to: correct answers become steeper.
Other things held constant, the greater the price of a good correct answers the lower the
consumer surplus.
Persuasive advertising influences demand by: correct answers altering the underlying tastes of
consumers.
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: correct answers $1,650.
Which of the following can explain an increase in the demand for housing in retirement
communities? correct answers an increase in the population of the elderly.
When government imposes a price floor above the market price, the result will be that correct
answers surpluses occur.
The demand for food (a broad group) is more correct answers inelastic than the demand for beef
(specific commodity).
Assume that the price elasticity of demand is -0.75 for a certain firm's product. If the firm lowers
price, the firm's managers can expect total revenue to correct answers decrease
, When the own price elasticity of good X is -3.5 then total revenue can be increased by correct
answers decreasing the price.
If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of
ketchup will lead to a correct answers 5% drop in demanded of hamburgers.
If quantity demanded for sneakers falls by 10% when price increases 25% we know that the
absolute value of the own-price elasticity of sneakers is: correct answers 0.4.
When a demand curve is linear, correct answers demand is inelastic at low prices.
The demand for good X has been estimated by Q xd =12 - 3Px + 4Py. Suppose that good X sells
at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity. correct answers
-0.6.
The demand for good X has been estimated to be lnQ xd = 100 - 2.5 lnPX + 4 lnPY + lnM. The
cross price elasticity of demand between goods X and Y is correct answers 4.
The demand for good X has been estimated by Q xd = 6 - 2Px + 5Py. Suppose that good X sells
at $3 per unit and good Y sells for $2 per unit. Calculate the own price elasticity. correct answers
-0.6.
The demand for good X has been estimated to be lnQ xd = 100 - 2.5 lnPX + 4 lnPY + lnM. The
own price elasticity of good X is correct answers -2.5.
We would expect the own price elasticity of demand for food to be: correct answers less elastic
than the demand for cereal.
The own-price elasticity of demand for apples is -1.2. If the price of apples falls by 5%, what
will happen to the quantity of apples demanded? correct answers It will increase 6%.
The demand for video recorders has been estimated to linear and given by the demand relation
Qv = 145 - 3.2Pv + 7M - .95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes
the price of video recorder film, Pm is the price of attending a movie, Pv is the price of video
recorders, and M is income. Based on the estimated demand equation we can conclude: correct
answers a and b. (video recorders are normal goods. AND
video recorder film is a complement for video recorders.)
Suppose demand is given by Q xd = 50 - 4Px + 6Py + Ax , where Px= $4, Py = $2, and Ax =
$50. What is the advertising elasticity of demand for good x? correct answers 0.52.
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PX is
the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on
X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units.
Based on this information, the cross price elasticity between goods X and Y is correct answers
0.008.
Suppose market demand and supply are given by Q d = 100 - 2P and Q S = 5 + 3P. The
equilibrium quantity is: correct answers 62.
Suppose the demand for good X is given by Qdx= 20 - 4Px + 2Py + M. The price of good X is
$5, the price of good Y is $15, and income is $150. Given these prices and income, how much of
good X will be purchased? correct answers 180
Jane pays the market price of $69 for a new pair of running shoes, even though she would be
happy to pay a maximum of $100 for the same pair of shoes. This is an example of the concept
of correct answers consumer surplus.
Suppose the demand for X is given by Q xd = 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. Based on this information, we know that good X is correct answers a
substitute for good Y and a normal good.
The demand function correct answers recognizes that the quantity of a good consumed depends
on its price and demand shifters.
Producer surplus is measured as the area correct answers above the supply curve and below the
market price.
As additional firms enter an industry, the market supply curve correct answers shifts to the right.
The supply function for good X is given by Q x s = 1,000 + PX - 5 PY - 2PW , where PX is the
price of X, PY is the price of good Y and PW is the price of input W. If PX = 100, PY = 150 PW
= 50, then the supply curve is correct answers Q x s = 150 + Px.
In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P. A
price ceiling of $4 will result in correct answers A shortage of 34 units.
Consumer surplus correct answers is the value consumers get from a good but do not pay for.
Suppose you produce wooden desks, and government legislation protecting the spotted owl has
made it more expensive for you to purchase wood. What do you expect to happen to the
equilibrium price and quantity of wooden desks? correct answers price will increase but quantity
will decrease.
Competitive market equilibrium correct answers is determined by the intersection of the market
demand and supply curves.
The supply function for good X is given by Q x s = 1,000 + PX - 5 PY - 2PW , where PX is the
price of X, PY is the price of good Y and PW is the price of input W. If the price of input W
increases by $10, then the supply of good X correct answers none of the above.
,Firms advertise in order to cause the demand for their products to correct answers shift to the
right.
An ad valorem tax shifts the supply curve correct answers by rotating it counter-clockwise.
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 correct answers A shortage of 30 units.
Suppose the demand for X is given by Q xd = 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. Based on this information, we know that good Y is correct answers a
substitute for good X.
All else held constant, as additional firms enter an industry correct answers more output is
available at each given price.
Technological advances will cause the supply curve to: correct answers shift to the right.
Advertising provides consumers with information about the underlying existence or quality of a
product. These types of advertising messages are called correct answers informative advertising.
An ad valorem tax causes supply curve to: correct answers become steeper.
Other things held constant, the greater the price of a good correct answers the lower the
consumer surplus.
Persuasive advertising influences demand by: correct answers altering the underlying tastes of
consumers.
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: correct answers $1,650.
Which of the following can explain an increase in the demand for housing in retirement
communities? correct answers an increase in the population of the elderly.
When government imposes a price floor above the market price, the result will be that correct
answers surpluses occur.
The demand for food (a broad group) is more correct answers inelastic than the demand for beef
(specific commodity).
Assume that the price elasticity of demand is -0.75 for a certain firm's product. If the firm lowers
price, the firm's managers can expect total revenue to correct answers decrease
, When the own price elasticity of good X is -3.5 then total revenue can be increased by correct
answers decreasing the price.
If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of
ketchup will lead to a correct answers 5% drop in demanded of hamburgers.
If quantity demanded for sneakers falls by 10% when price increases 25% we know that the
absolute value of the own-price elasticity of sneakers is: correct answers 0.4.
When a demand curve is linear, correct answers demand is inelastic at low prices.
The demand for good X has been estimated by Q xd =12 - 3Px + 4Py. Suppose that good X sells
at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity. correct answers
-0.6.
The demand for good X has been estimated to be lnQ xd = 100 - 2.5 lnPX + 4 lnPY + lnM. The
cross price elasticity of demand between goods X and Y is correct answers 4.
The demand for good X has been estimated by Q xd = 6 - 2Px + 5Py. Suppose that good X sells
at $3 per unit and good Y sells for $2 per unit. Calculate the own price elasticity. correct answers
-0.6.
The demand for good X has been estimated to be lnQ xd = 100 - 2.5 lnPX + 4 lnPY + lnM. The
own price elasticity of good X is correct answers -2.5.
We would expect the own price elasticity of demand for food to be: correct answers less elastic
than the demand for cereal.
The own-price elasticity of demand for apples is -1.2. If the price of apples falls by 5%, what
will happen to the quantity of apples demanded? correct answers It will increase 6%.
The demand for video recorders has been estimated to linear and given by the demand relation
Qv = 145 - 3.2Pv + 7M - .95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes
the price of video recorder film, Pm is the price of attending a movie, Pv is the price of video
recorders, and M is income. Based on the estimated demand equation we can conclude: correct
answers a and b. (video recorders are normal goods. AND
video recorder film is a complement for video recorders.)
Suppose demand is given by Q xd = 50 - 4Px + 6Py + Ax , where Px= $4, Py = $2, and Ax =
$50. What is the advertising elasticity of demand for good x? correct answers 0.52.
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PX is
the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on
X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units.
Based on this information, the cross price elasticity between goods X and Y is correct answers
0.008.
