HBX Economics for Manager Exam | Verified Exam Questions and
Answers | Latest Updated Study Material 2026
Question:
Diminishing Marginal Returns
Answer:
An economic relationship
stating that a consumer's willingness to pay for a product should decrease for additional units of
a product (i.e. the tenth milkshake will not taste as good as the first).
Question:
Demand Curve, Market
Answer:
A graphical representation of the
willingness to pay of all buyers for various quantities of a product or service. The market
demand curve is the horizontal sum of each individual's demand curve at a given price.
Question:
Willingness to Pay (WTP)
Answer:
The highest price a consumer is
willing to pay for a product or service. One can think of it as the price at which the consumer is
just indifferent between purchasing the product and not purchasing it
Question:
Steep Curve or Vertical
Answer:
Inelastic
Question:
Flat Curve or Horizontal
Answer:
Elastic
, Question:
Demand curve: Steep or flat? Inelastic or Elastics?
Answer:
1. If the
product has close SUBSTITUTES
Question:
2. If the product is a necessity or a luxury.
3. Time horizon. (over time people can discover new alternative)
Demand curve
Answer:
Summarize all the willingness to pay for all
consumers
Question:
Demand
Answer:
Refers to the quantity of a good or service desired at
any given price. The term "demand" is often used colloquially to describe how many consumers
might be interested in purchasing a product; more precise concepts include Willingness to Pay
and Demand Curve.
Question:
Demand Curve, Individual
Answer:
A graphical representation of a
buyer's willingness to pay for various quantities of a product or service (price on Y-axis, quantity
on X-axis).
Question:
Elasticity
Answer:
A measure of the responsiveness in one variable to a
change in another variable. Mathematically, it is the percentage change in one variable, divided
by the percentage change in another variable; for more details, see price elasticity of demand.
Elasticity does not depend on the units in which variables are measured (unlike the concept of
Answers | Latest Updated Study Material 2026
Question:
Diminishing Marginal Returns
Answer:
An economic relationship
stating that a consumer's willingness to pay for a product should decrease for additional units of
a product (i.e. the tenth milkshake will not taste as good as the first).
Question:
Demand Curve, Market
Answer:
A graphical representation of the
willingness to pay of all buyers for various quantities of a product or service. The market
demand curve is the horizontal sum of each individual's demand curve at a given price.
Question:
Willingness to Pay (WTP)
Answer:
The highest price a consumer is
willing to pay for a product or service. One can think of it as the price at which the consumer is
just indifferent between purchasing the product and not purchasing it
Question:
Steep Curve or Vertical
Answer:
Inelastic
Question:
Flat Curve or Horizontal
Answer:
Elastic
, Question:
Demand curve: Steep or flat? Inelastic or Elastics?
Answer:
1. If the
product has close SUBSTITUTES
Question:
2. If the product is a necessity or a luxury.
3. Time horizon. (over time people can discover new alternative)
Demand curve
Answer:
Summarize all the willingness to pay for all
consumers
Question:
Demand
Answer:
Refers to the quantity of a good or service desired at
any given price. The term "demand" is often used colloquially to describe how many consumers
might be interested in purchasing a product; more precise concepts include Willingness to Pay
and Demand Curve.
Question:
Demand Curve, Individual
Answer:
A graphical representation of a
buyer's willingness to pay for various quantities of a product or service (price on Y-axis, quantity
on X-axis).
Question:
Elasticity
Answer:
A measure of the responsiveness in one variable to a
change in another variable. Mathematically, it is the percentage change in one variable, divided
by the percentage change in another variable; for more details, see price elasticity of demand.
Elasticity does not depend on the units in which variables are measured (unlike the concept of
