Managerial Economics: Exam 1, 2 & 3 Review
BADM 7200E – FAIK KORAY ONLINE EXAMS 1, 2 & 3 QUESTIONS AND
CORRECT ANSWERS | 2026/2027
BADM 7200E Faik koray online EXAM 1,2&3
1. A decrease in the price of a good, holding all other factors constant,
results in:
A. A movement down along the demand curve to a larger quantity
demanded
B. A rightward shift of the demand curve
C. A leftward shift of the demand curve
D. A rightward shift of the supply curve
ANSWER : A. A movement down along the demand curve to a larger
quantity demanded
A change in the good's own price moves consumers along an existing
demand curve; only non-price determinants shift the curve.
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, Managerial Economics: Exam 1, 2 & 3 Review
2. Consumer income rises and the demand for Good X falls. Good X is
best described as:
A. A complement
B. A normal good
C. A luxury good
D. An inferior good
ANSWER : D. An inferior good
Demand for an inferior good moves in the opposite direction to income,
so its income elasticity is negative.
3. The price of coffee rises sharply. Assuming coffee and tea are
substitutes, the market for tea will experience:
A. An increase in demand
B. An increase in quantity demanded only
C. No change in demand
D. A decrease in demand
ANSWER : A. An increase in demand
A higher price for a substitute pushes buyers toward tea, shifting the tea
demand curve to the right.
4. The price of inkjet printers falls significantly. The demand for ink
cartridges will most likely:
A. Remain unchanged
B. Increase
C. Decrease
D. Become perfectly elastic
ANSWER : B. Increase
Printers and cartridges are complements; cheaper printers raise printer
sales and therefore raise demand for cartridges.
5. An improvement in production technology in an industry will cause:
A. A movement up along the supply curve
B. The supply curve to shift to the left
C. The demand curve to shift to the right
D. The supply curve to shift to the right
ANSWER : D. The supply curve to shift to the right
Better technology lowers production costs, so sellers offer more at every
price and supply shifts right.
Page 2 of 56
, Managerial Economics: Exam 1, 2 & 3 Review
6. If demand and supply both increase at the same time, the
equilibrium:
A. Price rises, but the change in quantity is indeterminate
B. Price and quantity both fall
C. Price falls and quantity is unchanged
D. Quantity rises, but the change in price is indeterminate
ANSWER : D. Quantity rises, but the change in price is indeterminate
Both shifts push quantity up, while they push price in opposite directions,
so the price effect depends on relative magnitudes.
7. Demand increases while supply decreases. The equilibrium:
A. Price falls and quantity rises
B. Price and quantity both fall
C. Quantity rises, but the change in price is indeterminate
D. Price rises, but the change in quantity is indeterminate
ANSWER : D. Price rises, but the change in quantity is indeterminate
Both shifts raise price, while their effects on quantity work in opposite
directions.
8. A binding price ceiling set below the equilibrium price will produce:
A. A shortage
B. A surplus
C. A new equilibrium at the ceiling
D. An increase in quantity supplied
ANSWER : A. A shortage
At a price below equilibrium, quantity demanded exceeds quantity
supplied.
9. A binding price floor set above the equilibrium price will produce:
A. A shortage
B. A surplus
C. No effect on the market
D. Higher quantity demanded
ANSWER : B. A surplus
At a price above equilibrium, quantity supplied exceeds quantity
demanded.
Page 3 of 56
, Managerial Economics: Exam 1, 2 & 3 Review
10. Market demand is Qd = 100 − 2P and market supply is Qs = 20 + 2P.
The equilibrium price is:
A. $40
B. $25
C. $30
D. $20
ANSWER : D. $20
Setting 100 − 2P = 20 + 2P gives 4P = 80, so P = $20.
11. Using Qd = 100 − 2P and Qs = 20 + 2P, the equilibrium quantity is:
A. 60 units
B. 40 units
C. 50 units
D. 80 units
ANSWER : A. 60 units
Substituting P = 20 into either equation gives Q = 60.
12. Using Qd = 100 − 2P and Qs = 20 + 2P, a price ceiling of $10 creates:
A. A surplus of 40 units
B. A shortage of 40 units
C. A surplus of 20 units
D. A shortage of 20 units
ANSWER : B. A shortage of 40 units
At P = 10, Qd = 80 and Qs = 40, leaving 40 units of unmet demand.
13. Consumer surplus is defined as the:
A. Excess of quantity demanded over quantity supplied
B. Total amount spent by consumers in a market
C. Difference between the price received and the seller's cost
D. Difference between what buyers are willing to pay and what they
actually pay
ANSWER : D. Difference between what buyers are willing to pay and
what they actually pay
It is the area below the demand curve and above the market price.
Page 4 of 56
BADM 7200E – FAIK KORAY ONLINE EXAMS 1, 2 & 3 QUESTIONS AND
CORRECT ANSWERS | 2026/2027
BADM 7200E Faik koray online EXAM 1,2&3
1. A decrease in the price of a good, holding all other factors constant,
results in:
A. A movement down along the demand curve to a larger quantity
demanded
B. A rightward shift of the demand curve
C. A leftward shift of the demand curve
D. A rightward shift of the supply curve
ANSWER : A. A movement down along the demand curve to a larger
quantity demanded
A change in the good's own price moves consumers along an existing
demand curve; only non-price determinants shift the curve.
Page 1 of 56
, Managerial Economics: Exam 1, 2 & 3 Review
2. Consumer income rises and the demand for Good X falls. Good X is
best described as:
A. A complement
B. A normal good
C. A luxury good
D. An inferior good
ANSWER : D. An inferior good
Demand for an inferior good moves in the opposite direction to income,
so its income elasticity is negative.
3. The price of coffee rises sharply. Assuming coffee and tea are
substitutes, the market for tea will experience:
A. An increase in demand
B. An increase in quantity demanded only
C. No change in demand
D. A decrease in demand
ANSWER : A. An increase in demand
A higher price for a substitute pushes buyers toward tea, shifting the tea
demand curve to the right.
4. The price of inkjet printers falls significantly. The demand for ink
cartridges will most likely:
A. Remain unchanged
B. Increase
C. Decrease
D. Become perfectly elastic
ANSWER : B. Increase
Printers and cartridges are complements; cheaper printers raise printer
sales and therefore raise demand for cartridges.
5. An improvement in production technology in an industry will cause:
A. A movement up along the supply curve
B. The supply curve to shift to the left
C. The demand curve to shift to the right
D. The supply curve to shift to the right
ANSWER : D. The supply curve to shift to the right
Better technology lowers production costs, so sellers offer more at every
price and supply shifts right.
Page 2 of 56
, Managerial Economics: Exam 1, 2 & 3 Review
6. If demand and supply both increase at the same time, the
equilibrium:
A. Price rises, but the change in quantity is indeterminate
B. Price and quantity both fall
C. Price falls and quantity is unchanged
D. Quantity rises, but the change in price is indeterminate
ANSWER : D. Quantity rises, but the change in price is indeterminate
Both shifts push quantity up, while they push price in opposite directions,
so the price effect depends on relative magnitudes.
7. Demand increases while supply decreases. The equilibrium:
A. Price falls and quantity rises
B. Price and quantity both fall
C. Quantity rises, but the change in price is indeterminate
D. Price rises, but the change in quantity is indeterminate
ANSWER : D. Price rises, but the change in quantity is indeterminate
Both shifts raise price, while their effects on quantity work in opposite
directions.
8. A binding price ceiling set below the equilibrium price will produce:
A. A shortage
B. A surplus
C. A new equilibrium at the ceiling
D. An increase in quantity supplied
ANSWER : A. A shortage
At a price below equilibrium, quantity demanded exceeds quantity
supplied.
9. A binding price floor set above the equilibrium price will produce:
A. A shortage
B. A surplus
C. No effect on the market
D. Higher quantity demanded
ANSWER : B. A surplus
At a price above equilibrium, quantity supplied exceeds quantity
demanded.
Page 3 of 56
, Managerial Economics: Exam 1, 2 & 3 Review
10. Market demand is Qd = 100 − 2P and market supply is Qs = 20 + 2P.
The equilibrium price is:
A. $40
B. $25
C. $30
D. $20
ANSWER : D. $20
Setting 100 − 2P = 20 + 2P gives 4P = 80, so P = $20.
11. Using Qd = 100 − 2P and Qs = 20 + 2P, the equilibrium quantity is:
A. 60 units
B. 40 units
C. 50 units
D. 80 units
ANSWER : A. 60 units
Substituting P = 20 into either equation gives Q = 60.
12. Using Qd = 100 − 2P and Qs = 20 + 2P, a price ceiling of $10 creates:
A. A surplus of 40 units
B. A shortage of 40 units
C. A surplus of 20 units
D. A shortage of 20 units
ANSWER : B. A shortage of 40 units
At P = 10, Qd = 80 and Qs = 40, leaving 40 units of unmet demand.
13. Consumer surplus is defined as the:
A. Excess of quantity demanded over quantity supplied
B. Total amount spent by consumers in a market
C. Difference between the price received and the seller's cost
D. Difference between what buyers are willing to pay and what they
actually pay
ANSWER : D. Difference between what buyers are willing to pay and
what they actually pay
It is the area below the demand curve and above the market price.
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