MBA 658 Quiz #3 questions n answers
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A firm experiencing constant economies of scale will have a long-run average cost curve that is:
- ANS ✔✔horizontal
Which one of the statements is true? - ANS ✔✔Diminishing returns is a short-run concept while
decreasing returns to scale is a long-run concept
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts
needed to make bikes falls. The demand curve would _________ and the supply curve
would__________ - ANS ✔✔shift to the right, shift to the right
The wages for Nike workers increases. At the same time, we see the price for Adidas shoes
increase. How does this affect the market for Nike shoes? - ANS ✔✔The demand curve will shift
to the right; the supply curve will shift to the left
How does an increase in the price of laptop memory chips affect the market of laptops? - ANS
✔✔The supply curve for laptops shifts to the left
Alan is offered a gamble. Heads he wins $100, tails he wins $20. If the game costs $60, would he
play? - ANS ✔✔No, he would not play since this is a fair bet and he is not being offered any risk
premium
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to
buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are
also willing to sell at the same prices. If the market maker wants to make three transactions,
what should he ask (the buyers) - ANS ✔✔$13
rated A+
A firm experiencing constant economies of scale will have a long-run average cost curve that is:
- ANS ✔✔horizontal
Which one of the statements is true? - ANS ✔✔Diminishing returns is a short-run concept while
decreasing returns to scale is a long-run concept
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts
needed to make bikes falls. The demand curve would _________ and the supply curve
would__________ - ANS ✔✔shift to the right, shift to the right
The wages for Nike workers increases. At the same time, we see the price for Adidas shoes
increase. How does this affect the market for Nike shoes? - ANS ✔✔The demand curve will shift
to the right; the supply curve will shift to the left
How does an increase in the price of laptop memory chips affect the market of laptops? - ANS
✔✔The supply curve for laptops shifts to the left
Alan is offered a gamble. Heads he wins $100, tails he wins $20. If the game costs $60, would he
play? - ANS ✔✔No, he would not play since this is a fair bet and he is not being offered any risk
premium
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to
buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are
also willing to sell at the same prices. If the market maker wants to make three transactions,
what should he ask (the buyers) - ANS ✔✔$13
