Be 301 Exam 2 Updated Actual Questions And Correct Answers

BE 301 EXAM 2 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
Suppose the demand for pens increases and the supply
for pens decreases. What effect will it have on the
quantity?
a. It will rise
b. It will fall
c. uncertain
d. None
Answer:
c. uncertain

Question:
A recent research signified the large health benefits of
eating cooked tomatoes. Holding other things constant,
this will cause
a. The demand curve for tomatoes to shift to the right
b. The demand curve for tomatoes to shift to the left
c. The supply curve for tomatoes to shift to the right
d. The supply curve for tomatoes to shift to the left
Answer:
a. The demand curve for tomatoes to shift to the right

Question:
How does an increase in income affect the market of
ipads (normal good)?
a. The demand curve for ipads to shift to the right
b. The demand curve for ipads to shift to the left
c. The supply curve for ipads to shift to the right
d. The supply curve for ipads to shift to the left
Answer:
a. The demand curve for ipads to shift to the right

Question:
The price of peanuts (an input in the production of
peanut butter) increases. At the same time, we see the
price for Jelly (a complement in the consumption of
peanut butter) rise. How does this affect the market for
peanut butter?
a. The demand curve will shift to the left; the supply curve
will shift to the left
b. The demand curve will shift to the left; the supply
curve will shift to the right
c. The demand curve will shift to the right; the supply

,curve will shift to the left
d. The demand curve will shift to the right; the supply
curve will shift to the right
Answer:
a. The demand curve will shift to the left; the supply curve will shift to the left

Question:
Based on the answer to question 4, the price for peanut
butter_____________ and the quantity demanded for peanut
butter ____________.
a. Uncertain; decreases
b. Decreases; increases
c. Decreases; uncertain
d. Increases; uncertain
Answer:
a. Uncertain; decreases

Question:
Suppose there are 11 buyers and 11 sellers, each willing to
buy or sell one unit of a good, with values {$14, $13, $12,
$11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction
costs and a competitive market, what is the equilibrium
price in this market?
a. 7
b. 8
c. 9
d. 10
Answer:
c. 9

Question:
If the government imposes a price floor at $10 (i.e. the
price must be $10 or higher) in the market in question 6,
how many goods will be traded?
a. Four
b. Five
c. Six
d. Seven
Answer:
b. Five

Question:
Changes in the price of a good cause [Mark all that
apply]:
a. Movement along the demand curve
b. Movement along the supply curve
c. A shift of the demand curve

, d. A shift of the supply curve
Answer:
a. Movement along the demand curve
b. Movement along the supply curve

Question:
9. Which of the following will cause shifts in the demand
curve [Mark all that apply]:
a. The price of related goods
b. The price of the good itself
c. The number of buyers of the good
d. The number of sellers of the goods
Answer:
a. The price of related goods
c. The number of buyers of the good

Question:
10. A market is said to be in equilibrium if [Mark all that
apply]:
a. The market clears
b. Quantity supplied = quantity demanded
c. There are no unconsummated wealth-creating
transactions
d. Total surplus is maximized
Answer:
a. The market clears
b. Quantity supplied = quantity demanded
c. There are no unconsummated wealth-creating transactions
d. Total surplus is maximized

Question:
11. These are characteristics of a perfectly competitive
industry, except: a. Many sellers
b. No barriers to entry
c. Homogenous products
d. Limited information
Answer:
d. Limited information

Question:
12. In the long-run, a perfectly competitively firm will
achieve
a. Negative economic profits
b. Zero economic profits
c. Positive economic profits
d. Not enough information can be provided
Answer: