MBA 701 Problem Set 1 & 2 - Osmani, Test ACTUAL UPDATED QUESTIONS AND
CORRECT ANSWERS
Economic Profit Is Negative when total costs exceed total revenues
Consumer Surplus All of the choices are correct
In markets characterized by monopolistic competition, entry into the market is relatively easy so that profit in the long run is zero.
A price-setting firm can lower the price of its product and sell more units.
When a firm is a price-taking firm, All of the choices are correct
Which of the following is NOT one of features the level of capital investment in research and development
characterizing market structures?
Which of the following would decrease the demand for a decrease in average household income when tennis balls are a normal good
tennis balls?
Which of the following will cause a change in quantity a change in the market price of the good
supplied?
A risk premium is a measure calculated to reflect the riskiness of future profits.
Use the following demand and supply functions: surplus of 30 units
Demand: Q = 50 − 4 P Supply: Q = 20 + 2 P If the price is
$10, there is a
If the market price of a good is $150 and the supply price $80
of the good is $70, what is the producer surplus if any?
In the figure, the equilibrium price and quantity are P = $6 and Q = 300.
The principal-agent problem arises when both "the principal and the agent have different objectives" and "the principal
cannot enforce the contract with the agent or finds it too costly to monitor the
agent".
CORRECT ANSWERS
Economic Profit Is Negative when total costs exceed total revenues
Consumer Surplus All of the choices are correct
In markets characterized by monopolistic competition, entry into the market is relatively easy so that profit in the long run is zero.
A price-setting firm can lower the price of its product and sell more units.
When a firm is a price-taking firm, All of the choices are correct
Which of the following is NOT one of features the level of capital investment in research and development
characterizing market structures?
Which of the following would decrease the demand for a decrease in average household income when tennis balls are a normal good
tennis balls?
Which of the following will cause a change in quantity a change in the market price of the good
supplied?
A risk premium is a measure calculated to reflect the riskiness of future profits.
Use the following demand and supply functions: surplus of 30 units
Demand: Q = 50 − 4 P Supply: Q = 20 + 2 P If the price is
$10, there is a
If the market price of a good is $150 and the supply price $80
of the good is $70, what is the producer surplus if any?
In the figure, the equilibrium price and quantity are P = $6 and Q = 300.
The principal-agent problem arises when both "the principal and the agent have different objectives" and "the principal
cannot enforce the contract with the agent or finds it too costly to monitor the
agent".
