MBA 701 EXAM 3 QUESTIONS AND
CORRECT ANSWERS.
Assume coffee and doughnuts are complements. When the price of doughnuts goes up,
which of the following will happen to the market for coffee?
A. The demand curve for coffee will shift to the right
B. The supply curve for coffee will shift to the left
C. The equilibrium price for coffee will increase
D. The equilibrium quantity of coffee will decrease
D. The equilibrium quantity of coffee will decrease
On any given supply curve, each point represents:
A. the highest price sellers can get for each unit over time
B. the lowest price buyers will accept per unit of good
C. the highest price buyers will pay for the good
D. the lowest price for which a supplier can profitably sell another unit
D. the lowest price for which a supplier can profitably sell another unit
*supply curve is all about suppliers, NOT buyers
Given a supply curve for a normal good; while moving along the supply curve, which of the
following is NOT held constant?
A. the price of the good itself
B. expected future prices
C. prices of resources used in production
D. the number of sellers
A. the price of the good itself
, An increase in quantity demanded caused by a decrease in price is represented by a
A. movement down and to the right along the demand curve
B. movement up and to the left along the demand curve
C. rightward shift of the demand curve
D. leftward shift of the demand curve
A. movement down and to the right along the demand curve
Movie tickets is a normal good, in the market for movie tickets, a decrease in income will
cause the
A. quantity demanded for movie tickets to decrease
B. supply curve for movie tickets to shift left
C. demand curve for movie tickets to shift left
D. demand curve for movie tickets to shift right
C. demand curve for movie tickets to shift left
*an increase in income would cause the curve to shift right
DEMAND CURVE: Change in Demand
this is a shift (left or right) in the entire curve and can be affected by a number of things: taste,
preference, income, etc.
*price NEVER shifts the curve
DEMAND CURVE: Change in Quantity Demanded
that is movement along the demand curve and can ONLY be affected by price
DEMAND CURVE: What type of relationship does price and quantity have?
Inverse relationship; the higher the price, the less likely people are to purchase (and vice versa);
downward sloping line
CORRECT ANSWERS.
Assume coffee and doughnuts are complements. When the price of doughnuts goes up,
which of the following will happen to the market for coffee?
A. The demand curve for coffee will shift to the right
B. The supply curve for coffee will shift to the left
C. The equilibrium price for coffee will increase
D. The equilibrium quantity of coffee will decrease
D. The equilibrium quantity of coffee will decrease
On any given supply curve, each point represents:
A. the highest price sellers can get for each unit over time
B. the lowest price buyers will accept per unit of good
C. the highest price buyers will pay for the good
D. the lowest price for which a supplier can profitably sell another unit
D. the lowest price for which a supplier can profitably sell another unit
*supply curve is all about suppliers, NOT buyers
Given a supply curve for a normal good; while moving along the supply curve, which of the
following is NOT held constant?
A. the price of the good itself
B. expected future prices
C. prices of resources used in production
D. the number of sellers
A. the price of the good itself
, An increase in quantity demanded caused by a decrease in price is represented by a
A. movement down and to the right along the demand curve
B. movement up and to the left along the demand curve
C. rightward shift of the demand curve
D. leftward shift of the demand curve
A. movement down and to the right along the demand curve
Movie tickets is a normal good, in the market for movie tickets, a decrease in income will
cause the
A. quantity demanded for movie tickets to decrease
B. supply curve for movie tickets to shift left
C. demand curve for movie tickets to shift left
D. demand curve for movie tickets to shift right
C. demand curve for movie tickets to shift left
*an increase in income would cause the curve to shift right
DEMAND CURVE: Change in Demand
this is a shift (left or right) in the entire curve and can be affected by a number of things: taste,
preference, income, etc.
*price NEVER shifts the curve
DEMAND CURVE: Change in Quantity Demanded
that is movement along the demand curve and can ONLY be affected by price
DEMAND CURVE: What type of relationship does price and quantity have?
Inverse relationship; the higher the price, the less likely people are to purchase (and vice versa);
downward sloping line
