MBA 701 EXAM QUESTIONS AND CORRECT
ANSWERS.
If the price of a good or service exceeds the equilibrium price, a _____ exists. As a result,
price tends to _____.
surplus;fall
What type of price control will the government impose if it considers the equilibrium price
to be too high?
Price Celing
Other things remaining constant, when demand for a good or service increases, which of
the following occur(s)?
-Equilibrium quantity is unchanged
-Equilibrium price increases
-Equilibrium price decreases
-Equilibrium quantity increases
Equilibrium price increases
Equilibrium quantity increases
True or false: When a price floor applies to a product, rather than labor, the deadweight
loss will always be less.
False
Which of the following occur(s) when the supply of a good or service decreases and demand
remains the same?
Multiple select question.
-Equilibrium quantity increases
-Equilibrium quantity decreases
-Equilibrium price increases
-Equilibrium price decreases
,Equilibrium quantity decreases
Equilibrium price increases
Comparative static analysis assumes which of the following?
-Goods are allocated by quantity
-No price floors
-Goods are allocated by price
-No price ceilings
No price floors
Goods are allocated by price
No price ceilings
If the price of a good or service is less than the equilibrium price, a _____ exists. As a
result, the price tends to _____.
shortage; rise
Determine the effect in the market for chicken if the federal government subsidizes chicken
production and, at the same time, the price of pork, a substitute, decreases.
Equilibrium price decreases.
The effect on equilibrium quantity is uncertain.
Other things remaining constant, when demand for a good or service decreases, which of
the following occur(s)?
Equilibrium quantity decreases
Equilibrium price decreases
Equilibrium price is unchanged
Equilibrium quantity increases
Equilibrium quantity decreases
Equilibrium price decreases
Which of the following occur(s) when the supply of a good or service increases but the
demand remains the same?
Multiple select question.
, Equilibrium price increases
Equilibrium quantity increases
Equilibrium quantity decreases
Equilibrium price decreases
Equilibrium quantity increases
Equilibrium price decreases
What type of analysis studies the movement from one equilibrium to another?
Comparative static analysis
Other things remaining constant, when demand for a good or service increases, which of
the following occur(s)?
Multiple select question.
Equilibrium price increases
Equilibrium quantity is unchanged
Equilibrium price decreases
Equilibrium quantity increases
Equilibrium price increases
Equilibrium quantity increases
Suppose there is an increase in the price of pork. If chicken is a substitute for pork, what
can producers and consumers of chicken expect to see in the market for chicken?
Multiple select question.
An increase in the price of chicken
A decrease in the quantity of chicken purchased
A decrease in the price of chicken
An increase in the quantity of chicken purchased
An increase in the price of chicken
An increase in the quantity of chicken purchased
When a price floor is applied to a product and the government buys and discards the
resulting surplus, the deadweight loss from the price floor _________.
ANSWERS.
If the price of a good or service exceeds the equilibrium price, a _____ exists. As a result,
price tends to _____.
surplus;fall
What type of price control will the government impose if it considers the equilibrium price
to be too high?
Price Celing
Other things remaining constant, when demand for a good or service increases, which of
the following occur(s)?
-Equilibrium quantity is unchanged
-Equilibrium price increases
-Equilibrium price decreases
-Equilibrium quantity increases
Equilibrium price increases
Equilibrium quantity increases
True or false: When a price floor applies to a product, rather than labor, the deadweight
loss will always be less.
False
Which of the following occur(s) when the supply of a good or service decreases and demand
remains the same?
Multiple select question.
-Equilibrium quantity increases
-Equilibrium quantity decreases
-Equilibrium price increases
-Equilibrium price decreases
,Equilibrium quantity decreases
Equilibrium price increases
Comparative static analysis assumes which of the following?
-Goods are allocated by quantity
-No price floors
-Goods are allocated by price
-No price ceilings
No price floors
Goods are allocated by price
No price ceilings
If the price of a good or service is less than the equilibrium price, a _____ exists. As a
result, the price tends to _____.
shortage; rise
Determine the effect in the market for chicken if the federal government subsidizes chicken
production and, at the same time, the price of pork, a substitute, decreases.
Equilibrium price decreases.
The effect on equilibrium quantity is uncertain.
Other things remaining constant, when demand for a good or service decreases, which of
the following occur(s)?
Equilibrium quantity decreases
Equilibrium price decreases
Equilibrium price is unchanged
Equilibrium quantity increases
Equilibrium quantity decreases
Equilibrium price decreases
Which of the following occur(s) when the supply of a good or service increases but the
demand remains the same?
Multiple select question.
, Equilibrium price increases
Equilibrium quantity increases
Equilibrium quantity decreases
Equilibrium price decreases
Equilibrium quantity increases
Equilibrium price decreases
What type of analysis studies the movement from one equilibrium to another?
Comparative static analysis
Other things remaining constant, when demand for a good or service increases, which of
the following occur(s)?
Multiple select question.
Equilibrium price increases
Equilibrium quantity is unchanged
Equilibrium price decreases
Equilibrium quantity increases
Equilibrium price increases
Equilibrium quantity increases
Suppose there is an increase in the price of pork. If chicken is a substitute for pork, what
can producers and consumers of chicken expect to see in the market for chicken?
Multiple select question.
An increase in the price of chicken
A decrease in the quantity of chicken purchased
A decrease in the price of chicken
An increase in the quantity of chicken purchased
An increase in the price of chicken
An increase in the quantity of chicken purchased
When a price floor is applied to a product and the government buys and discards the
resulting surplus, the deadweight loss from the price floor _________.
