Question 1

If P1 = €10, Q1 = 500, P2 = €9.50 and Q2 = 550, then at point P1 the point price elasticity P equals:

Accepted Answer

A) -2. 
B) 2. 
C) -0.5. 
D) 0.5. 
A) -2. 
B) 2. 
C) -0.5. 
D) 0.5. A

Question 2

If consumption of Y is depicted on the vertical axis and consumption of X is depicted on the horizontal axis, a parallel inward shift in the budget constraint occurs when:

Accepted Answer

A) prices for both X and Y fall by a given percentage. 
B) the relative price of X rises. 
C) the relative price of Y rises. 
D) prices for both X and Y rise by a given percentage. 
A) prices for both X and Y fall by a given percentage. 
B) the relative price of X rises. 
C) the relative price of Y rises. 
D) prices for both X and Y rise by a given percentage. D

Question 3

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing price is:

Accepted Answer

A) €10. 
B) €4,500. 
C) €1,500. 
D) €7,500. 
A) €10. 
B) €4,500. 
C) €1,500. 
D) €7,500. D

Question 4

The law of diminishing marginal utility:

Accepted Answer

A) states that as an individual increases consumption of a given product within a set period of time, the marginal utility gained from consumption eventually becomes negative. 
B) contradicts the nonsatiation principle. 
C) measures the added satisfaction derived from a oneunit increase in consumption of a particular good or service, holding consumption of other goods and services constant. 
D) gives rise to a downward-sloping demand curve for all goods and services. 
A) states that as an individual increases consumption of a given product within a set period of time, the marginal utility gained from consumption eventually becomes negative. 
B) contradicts the nonsatiation principle. 
C) measures the added satisfaction derived from a oneunit increase in consumption of a particular good or service, holding consumption of other goods and services constant. 
D) gives rise to a downward-sloping demand curve for all goods and services.

Question 5

When the crossprice elasticity PX = 1.5:

Accepted Answer

A) the quantity demanded rises by 1% with a 1.5% increase in the price of X. 
B) demand rises by 1% with a 1.5% increase in the price of X. 
C) demand rises by 1.5% with a 1% increase in the price of X. 
D) the quantity demanded rises by 1.5% with a 1% increase in the price of X. 
A) the quantity demanded rises by 1% with a 1.5% increase in the price of X. 
B) demand rises by 1% with a 1.5% increase in the price of X. 
C) demand rises by 1.5% with a 1% increase in the price of X. 
D) the quantity demanded rises by 1.5% with a 1% increase in the price of X.

Question 6

Goods for which 0 < I < 1 are often referred to as:

Accepted Answer

A) cyclical normal goods. 
B) noncyclical normal goods. 
C) being relatively unaffected by changing income. 
D) inferior goods. 
A) cyclical normal goods. 
B) noncyclical normal goods. 
C) being relatively unaffected by changing income. 
D) inferior goods.

Question 7

If MC = €5 and P = -4, the profit-maximizing price equals:

Accepted Answer

A) €4. 
B) €20. 
C) €6.67. 
D) €6.25. 
A) €4. 
B) €20. 
C) €6.67. 
D) €6.25.

Question 8

The arc price elasticity of demand shows the percentage change in:

Accepted Answer

A) demand following a change in the price of a product itself. 
B) the quantity demanded following a change in price of a product itself. 
C) price following a change in the quantity demanded. 
D) the price of a product itself following a change in demand. 
A) demand following a change in the price of a product itself. 
B) the quantity demanded following a change in price of a product itself. 
C) price following a change in the quantity demanded. 
D) the price of a product itself following a change in demand.

Question 9

Utility theory does not assume that:

Accepted Answer

A) more is better. 
B) each incremental unit of consumption brings some additional satisfaction. 
C) consumers are able to rank order the desirability of various goods and services. 
D) consumers know how much one product is preferred over another. 
A) more is better. 
B) each incremental unit of consumption brings some additional satisfaction. 
C) consumers are able to rank order the desirability of various goods and services. 
D) consumers know how much one product is preferred over another.

Question 10

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing quantity is:

Accepted Answer

A) 50. 
B) 30. 
C) 10. 
D) 20. 
A) 50. 
B) 30. 
C) 10. 
D) 20.

If P1 = €10, Q1 = 500, P2 = €9.50 and Q2 = 550, then at point P1 the point price elasticity P equals:

If consumption of Y is depicted on the vertical axis and consumption of X is depicted on the horizontal axis, a parallel inward shift in the budget constraint occurs when:

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing price is:

The law of diminishing marginal utility:

When the crossprice elasticity PX = 1.5:

Goods for which 0 < I < 1 are often referred to as:

If MC = €5 and P = -4, the profit-maximizing price equals:

The arc price elasticity of demand shows the percentage change in:

Utility theory does not assume that:

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing quantity is:

Nature and Scope of Managerial Economics

Economic Optimization

Demand and Supply

Demand Estimation

Forecasting

Production Analysis and Compensation Policy

Cost Analysis and Estimation

Linear Programming

Competitive Markets

Performance and Strategy in Competitive Markets

Monopoly and Monopsony

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Pricing Practices

Risk Analysis

Capital Budgeting

Organization Structure and Corporate Governance

Government in the Market Economy

Filters

Exam 4: Demand Analysis

If P1 = €10, Q1 = 500, P2 = €9.50 and Q2 = 550, then at point P1 the point price elasticity P equals:

If consumption of Y is depicted on the vertical axis and consumption of X is depicted on the horizontal axis, a parallel inward shift in the budget constraint occurs when:

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing price is:

The law of diminishing marginal utility:

When the crossprice elasticity PX = 1.5:

Goods for which 0 < I < 1 are often referred to as:

If MC = €5 and P = -4, the profit-maximizing price equals:

The arc price elasticity of demand shows the percentage change in:

Utility theory does not assume that:

If MR = €9,000 - €300Q and MC = €5,000 + €100Q, the profit-maximizing quantity is:

Nature and Scope of Managerial Economics

Economic Optimization

Demand and Supply

Demand Estimation

Forecasting

Production Analysis and Compensation Policy

Cost Analysis and Estimation

Linear Programming

Competitive Markets

Performance and Strategy in Competitive Markets

Monopoly and Monopsony

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Pricing Practices

Risk Analysis

Capital Budgeting

Organization Structure and Corporate Governance

Government in the Market Economy

Filters