BNAD 301 EXAM 2 ACTUAL TEST PAPER 2026
QUESTIONS SOLUTIONS GRADED A+
◉ If the market for widgets has one seller that controls a large
fraction of the market and exercises substantial control over the
market price, then this suggests that:
Answer: Supply and demand is not the appropriate model for
analyzing the widget market
◉ Which versions of this statement are examples of positive
economics? (Check all that apply.) Increasing the income tax rate on
the wealthiest persons would:
Answer: increase economic growth; decrease economic growth
◉ In an economic model, the exogenous variables:
Answer: Are used to predict other variables.
◉ If the quantity supplied exceeds the quantity demanded, then we
normally expect the market price to fall, because the:
Answer: Unsatisfied suppliers bid the price down.
◉ Selfish behavior, according to economists, may be motivated by
the desire to improve or increase (mark all that apply):
, Answer: (A) Power.
(B) Health.
(C) Wealth.
(D) Education.
(E) Social status.
◉ Which would have more impact on the equilibrium quantity, a
20% increase in supply (i.e., at any given price, quantity supplied
increases by 20%) or a 20% increase in demand?
Answer: A 20% increase in demand has more impact
◉ If there is a 20% increase in supply AND a 20% increase in
demand, then the equilibrium price:
Answer: Does not change.
◉ Changes in a downstream market affect ______ in the upstream
market; changes in an
upstream market affect ______ in the downstream market
Answer: Demand; supply
◉ Based on the class discussion, the market for Ramen may violate:
Answer: The rule that higher income increases demand.
QUESTIONS SOLUTIONS GRADED A+
◉ If the market for widgets has one seller that controls a large
fraction of the market and exercises substantial control over the
market price, then this suggests that:
Answer: Supply and demand is not the appropriate model for
analyzing the widget market
◉ Which versions of this statement are examples of positive
economics? (Check all that apply.) Increasing the income tax rate on
the wealthiest persons would:
Answer: increase economic growth; decrease economic growth
◉ In an economic model, the exogenous variables:
Answer: Are used to predict other variables.
◉ If the quantity supplied exceeds the quantity demanded, then we
normally expect the market price to fall, because the:
Answer: Unsatisfied suppliers bid the price down.
◉ Selfish behavior, according to economists, may be motivated by
the desire to improve or increase (mark all that apply):
, Answer: (A) Power.
(B) Health.
(C) Wealth.
(D) Education.
(E) Social status.
◉ Which would have more impact on the equilibrium quantity, a
20% increase in supply (i.e., at any given price, quantity supplied
increases by 20%) or a 20% increase in demand?
Answer: A 20% increase in demand has more impact
◉ If there is a 20% increase in supply AND a 20% increase in
demand, then the equilibrium price:
Answer: Does not change.
◉ Changes in a downstream market affect ______ in the upstream
market; changes in an
upstream market affect ______ in the downstream market
Answer: Demand; supply
◉ Based on the class discussion, the market for Ramen may violate:
Answer: The rule that higher income increases demand.
