HBX Economics Exam | Verified Exam Questions and Answers | Latest
Updated Study Material 2026
Question:
Willingness to Pay (WTP)
Answer:
the maximum price an individual is
willing to pay for a good or service
Question:
Does a free good or service mean the WTP is 0?
Answer:
No
Question:
Is WTP affected by price?
Answer:
No, it is an individual value
developed by a variety of factors, but price is not one of them.
Question:
Are demand curves affected by price?
Answer:
No, a change in price
will move along the demand curve, but will not shift the curve.
Question:
The demand curve shifts as WTP decreases.
Answer:
left
Question:
The demand curve shifts as WTP increases.
Answer:
right
, Question:
Factors that affect WTP can also shift the demand curve. What are some examples?
Answer:
Income, gender, location, age, service level, brand, expectations, advertising,
competition
Question:
How is revenue shown on a graph?
Answer:
It is the square area under
the curve with the top right corner equal to x.
Question:
How is WTP shown on a graph?
Answer:
x=WTP, y=quantity; the graph
looks like a histogram
Question:
How is the demand curve developed?
Answer:
Aggregation of individual
WTP; axes are flipped so that y=price and x=number of consumers
Question:
An individual's demand curve slopes in what direction?
Answer:
Downward. The WTP for each consecutive item decreases.
Question:
Price affects .
Answer:
the quantity demanded, not overall
demand
Updated Study Material 2026
Question:
Willingness to Pay (WTP)
Answer:
the maximum price an individual is
willing to pay for a good or service
Question:
Does a free good or service mean the WTP is 0?
Answer:
No
Question:
Is WTP affected by price?
Answer:
No, it is an individual value
developed by a variety of factors, but price is not one of them.
Question:
Are demand curves affected by price?
Answer:
No, a change in price
will move along the demand curve, but will not shift the curve.
Question:
The demand curve shifts as WTP decreases.
Answer:
left
Question:
The demand curve shifts as WTP increases.
Answer:
right
, Question:
Factors that affect WTP can also shift the demand curve. What are some examples?
Answer:
Income, gender, location, age, service level, brand, expectations, advertising,
competition
Question:
How is revenue shown on a graph?
Answer:
It is the square area under
the curve with the top right corner equal to x.
Question:
How is WTP shown on a graph?
Answer:
x=WTP, y=quantity; the graph
looks like a histogram
Question:
How is the demand curve developed?
Answer:
Aggregation of individual
WTP; axes are flipped so that y=price and x=number of consumers
Question:
An individual's demand curve slopes in what direction?
Answer:
Downward. The WTP for each consecutive item decreases.
Question:
Price affects .
Answer:
the quantity demanded, not overall
demand
