2025-2026 Econ 315 HW Questions Mock
Exam With 100% Correct Answers.
Southwest Airlines begins a ''Bags Fly Free'' campaign, charging no fees for the first and second
checked bags. This situation best represents - Answer producer-producer rivalry
It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United
States this year.
Using the concept of net present value and opportunity cost, when is it rational for an individual
to pursue an MBA degree.
multiple choice
A:When the benefits of attending school are greater than zero.
B: When the costs of attending school are near zero.
C: When the net present value of attending graduate school is at least $100,000.
D: When the net present value of attending graduate school is greater than zero. - Answer D
It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United
States this year.
What would you expect to happen to the number of applicants if the starting salaries of
managers with MBA degrees remained constant but salaries of managers without such degrees
decreased by 20 percent?
A:There is no way of telling.
B: It would increase.
C: It would not change.
D: It would decrease - Answer B
Suppose the firm achieves total revenue of $1,000 by selling 100 units, while facing total costs
of $900. If the firm produces and sells 101 units, their total revenue is $1,009 and their total
costs is $905. Should the firm produce and sell the extra unit?
A: no, since marginal profits are declining
B: yes, since marginal profits are positive
C: yes, since profits are positive
,A: a lower price of a good favors both producers and consumers.
B: a higher price of a good hurts producers while favoring consumers.
C: a higher price of a good favors producers while hurting consumers.
D: a lower price of a good hurts both producers and consumers. - Answer C
You are considering paying $200,000 for an annuity today, and you know you need a yearly cash
stream of $10,000 for expenses. What is the minimum annual interest rate (that would create a
perpetual cash flow stream) needed for the annuity?
A: 0.5 percent
B: 5 percent
C: 20 percent
D: 1 percent - Answer B
Generally when calculating profits as total revenue minus total costs, accounting profits are
larger than economic profits because economists take into account
A: only explicit costs.
B: only implicit costs.
C: both explicit and implicit costs.
D: that both types of profits are always equal because they account for the same costs. - Answer
C
Because of producer-producer rivalry, the price will tend to
A: be driven to a lower price.
B: rise up to the maximum price the consumers are willing and able to pay.
C: be the same as the competitive price.
D: be the same as the monopoly price. - Answer A
Trade will take place
, C: only if the maximum that a consumer is willing and able to pay is equal to the minimum price
the producer is willing and able to accept for a good.
D: if the maximum amount that a consumer is willing to pay equals 0. - Answer B
The value of the firm is the
A: current value of profits.
B: present discounted value of all future profits.
C: average value of all future profits.
D: total value of all future profits. - Answer B because in order to calculate the firm's value, we
need to calculate the present value of its profit.
If the interest rate is 5 percent, $100 received at the end of seven years is worth how much
today?
A: 100/(0.05)^7
B: 100/(1 + 0.05)^7
C: 100/(1 + 5)^7
D: 100 - Answer B
The behavior of bidders in an auction is an example of
A: Consumer-consumer rivalry.
B: consumer-producer rivalry.
C: producer-producer rivalry.
D: supplier-consumer rivalry. - Answer A
The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-
Corporation, makes a substitute good that it markets under the name "Y." Good Y is an inferior
good.
How will the demand for good X change if consumer incomes decrease?
A: It will decrease.
B: It will stay the same.
Exam With 100% Correct Answers.
Southwest Airlines begins a ''Bags Fly Free'' campaign, charging no fees for the first and second
checked bags. This situation best represents - Answer producer-producer rivalry
It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United
States this year.
Using the concept of net present value and opportunity cost, when is it rational for an individual
to pursue an MBA degree.
multiple choice
A:When the benefits of attending school are greater than zero.
B: When the costs of attending school are near zero.
C: When the net present value of attending graduate school is at least $100,000.
D: When the net present value of attending graduate school is greater than zero. - Answer D
It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United
States this year.
What would you expect to happen to the number of applicants if the starting salaries of
managers with MBA degrees remained constant but salaries of managers without such degrees
decreased by 20 percent?
A:There is no way of telling.
B: It would increase.
C: It would not change.
D: It would decrease - Answer B
Suppose the firm achieves total revenue of $1,000 by selling 100 units, while facing total costs
of $900. If the firm produces and sells 101 units, their total revenue is $1,009 and their total
costs is $905. Should the firm produce and sell the extra unit?
A: no, since marginal profits are declining
B: yes, since marginal profits are positive
C: yes, since profits are positive
,A: a lower price of a good favors both producers and consumers.
B: a higher price of a good hurts producers while favoring consumers.
C: a higher price of a good favors producers while hurting consumers.
D: a lower price of a good hurts both producers and consumers. - Answer C
You are considering paying $200,000 for an annuity today, and you know you need a yearly cash
stream of $10,000 for expenses. What is the minimum annual interest rate (that would create a
perpetual cash flow stream) needed for the annuity?
A: 0.5 percent
B: 5 percent
C: 20 percent
D: 1 percent - Answer B
Generally when calculating profits as total revenue minus total costs, accounting profits are
larger than economic profits because economists take into account
A: only explicit costs.
B: only implicit costs.
C: both explicit and implicit costs.
D: that both types of profits are always equal because they account for the same costs. - Answer
C
Because of producer-producer rivalry, the price will tend to
A: be driven to a lower price.
B: rise up to the maximum price the consumers are willing and able to pay.
C: be the same as the competitive price.
D: be the same as the monopoly price. - Answer A
Trade will take place
, C: only if the maximum that a consumer is willing and able to pay is equal to the minimum price
the producer is willing and able to accept for a good.
D: if the maximum amount that a consumer is willing to pay equals 0. - Answer B
The value of the firm is the
A: current value of profits.
B: present discounted value of all future profits.
C: average value of all future profits.
D: total value of all future profits. - Answer B because in order to calculate the firm's value, we
need to calculate the present value of its profit.
If the interest rate is 5 percent, $100 received at the end of seven years is worth how much
today?
A: 100/(0.05)^7
B: 100/(1 + 0.05)^7
C: 100/(1 + 5)^7
D: 100 - Answer B
The behavior of bidders in an auction is an example of
A: Consumer-consumer rivalry.
B: consumer-producer rivalry.
C: producer-producer rivalry.
D: supplier-consumer rivalry. - Answer A
The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-
Corporation, makes a substitute good that it markets under the name "Y." Good Y is an inferior
good.
How will the demand for good X change if consumer incomes decrease?
A: It will decrease.
B: It will stay the same.
