MBA 701 | Questions with 100% Verified Answers | Latest Update
2026/2027
Question: Refer to the following indifference map for a consumer who
has an income of $48 to spend on goods X and Y and the
market prices of X and Y are both $4:
Now suppose the price of good X increases to $12 while the
price of good Y remains $4. Utility will be maximized on which
indifference curve?
Answer:
II
Question: The rate at which a consumer is able to substitute one good
for another is determined by
Answer:
the budget line.
Question: The demand for heart surgery is price inelastic. So it follows
that
Answer:
if the price of heart surgery increases, total expenditure by consumers on heart surgery
will rise.
Question: If the demand for umbrellas is price inelastic,
Answer:
if more umbrellas are sold as the result of a price decrease, total expenditures by
consumers on umbrellas will decrease.
Question: The slope of an indifference curve
Answer:
is the rate at which the consumer is willing to exchange one good for another, utility held
constant.
Question: Suppose that the Houston Rockets' management is
considering a plan in which fans who donate blood can attend
games for $35 instead of the usual $50. If both ticket revenues
and blood donations rise with this plan, which of the following
is true?
Answer:
The demand for Houston Rockets' tickets is price elastic.
, Question: Which of the following will NOT affect the elasticity of
demand for a product?
Answer:
the cost of producing the product
Question: If the quantity of gidgets demanded increases when the price
of gadgets decreases,
Answer:
gidgets and gadgets are complements.
Question: Marginal revenue
Answer:
"is the change in total revenue when output increases by one unit" and "measures the
slope of the total revenue curve".
Question: A utility function
Answer:
shows the relation between the amount of goods consumed and a consumer's utility.
Question: The cross-price elasticity of demand between goods X and Y
Answer:
both "measures the responsiveness of the quantity of X demanded to changes in the
price of Y" and "is greater than zero if X and Y are substitutes".
Question: An individual's demand curve for X
Answer:
shows how the utility-maximizing choice of X changes as the price of X changes.
Question: Which of the following assumptions is (are) NOT made in
consumer behavior theory?
Answer:
Consumers can measure the utility they get from all bundles of goods.
Question: When marginal revenue is positive,
Answer:
demand is elastic.
2026/2027
Question: Refer to the following indifference map for a consumer who
has an income of $48 to spend on goods X and Y and the
market prices of X and Y are both $4:
Now suppose the price of good X increases to $12 while the
price of good Y remains $4. Utility will be maximized on which
indifference curve?
Answer:
II
Question: The rate at which a consumer is able to substitute one good
for another is determined by
Answer:
the budget line.
Question: The demand for heart surgery is price inelastic. So it follows
that
Answer:
if the price of heart surgery increases, total expenditure by consumers on heart surgery
will rise.
Question: If the demand for umbrellas is price inelastic,
Answer:
if more umbrellas are sold as the result of a price decrease, total expenditures by
consumers on umbrellas will decrease.
Question: The slope of an indifference curve
Answer:
is the rate at which the consumer is willing to exchange one good for another, utility held
constant.
Question: Suppose that the Houston Rockets' management is
considering a plan in which fans who donate blood can attend
games for $35 instead of the usual $50. If both ticket revenues
and blood donations rise with this plan, which of the following
is true?
Answer:
The demand for Houston Rockets' tickets is price elastic.
, Question: Which of the following will NOT affect the elasticity of
demand for a product?
Answer:
the cost of producing the product
Question: If the quantity of gidgets demanded increases when the price
of gadgets decreases,
Answer:
gidgets and gadgets are complements.
Question: Marginal revenue
Answer:
"is the change in total revenue when output increases by one unit" and "measures the
slope of the total revenue curve".
Question: A utility function
Answer:
shows the relation between the amount of goods consumed and a consumer's utility.
Question: The cross-price elasticity of demand between goods X and Y
Answer:
both "measures the responsiveness of the quantity of X demanded to changes in the
price of Y" and "is greater than zero if X and Y are substitutes".
Question: An individual's demand curve for X
Answer:
shows how the utility-maximizing choice of X changes as the price of X changes.
Question: Which of the following assumptions is (are) NOT made in
consumer behavior theory?
Answer:
Consumers can measure the utility they get from all bundles of goods.
Question: When marginal revenue is positive,
Answer:
demand is elastic.
