Question 1

​All these factors would shift the supply curve of tobacco,except

Accepted Answer

A) ​Bad weather 
B) Change in the price of tobacco 
C) Changes in the wages of agricultural workers 
D) ​A tax charged on the production of tobacco 
A) ​Bad weather 
B) Change in the price of tobacco 
C) Changes in the wages of agricultural workers 
D) ​A tax charged on the production of tobacco B

Question 2

​Assuming that beer is a normal good,what will happen to the demand for beer near college towns if student income increased?

Accepted Answer

A) ​Demand will fall because students love these beers 
B) Demand will fall 
C) Demand will rise 
D) ​Supply would rise 
A) ​Demand will fall because students love these beers 
B) Demand will fall 
C) Demand will rise 
D) ​Supply would rise C

Question 3

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?​

Accepted Answer

A) ​7 
B) 8 
C) 9 
D) ​10 
A) ​7 
B) 8 
C) 9 
D) ​10 D

Question 4

​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 makes three transactions,what is his total profit?

Accepted Answer

A) ​$12 
B) $15 
C) $18 
D) ​$21 
A) ​$12 
B) $15 
C) $18 
D) ​$21

Question 5

​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 bought and sold at the equilibrium price,what is his profit

Accepted Answer

A) ​$1 
B) $2.5 
C) $3​ 
D) ​$0 
A) ​$1 
B) $2.5 
C) $3​ 
D) ​$0

Question 6

​Olive Oil
Spain is the world's number 1 producer of olive oil,mostly in the southern Andalusia region.But very dry weather there has ravaged olive trees.What affect will the poor weather have on the olive oil market?

Accepted Answer

Olive trees will not produce a

Question 7

Natural Gas Boom
Technological improvements in hydraulic fracturing,or "Fracking," have decreased the cost of extracting smaller pockets of natural gas.What affect does this have on supply and demand as well as on the equilibrium price and quantity?

Accepted Answer

Lower extraction costs will ca

Question 8

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 bid (the suppliers)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 bid (the suppliers)​

Accepted Answer

A) ​$9 
B) $8 
C) $7 
D) ​$6 
A) ​$9 
B) $8 
C) $7 
D) ​$6

Question 9

​An increase in income causes the demand of normal goods to _________ and the price of normal goods to

Accepted Answer

A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease 
A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease

Question 10

An increase in the price of laptop memory chips causes the price for laptops _____________ and the quantity supplied for laptops ____________.​

Accepted Answer

A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease 
A) ​Increase;increase 
B) Increase;decrease 
C) Decrease;increase 
D) ​Decrease,decrease

Question 11

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.If the equilibrium price in the market is $2500,how many cars would be sold?

Accepted Answer

A) ​1 
B) 2 
C) 3 
D) ​4 
A) ​1 
B) 2 
C) 3 
D) ​4

Question 12

​People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?

Accepted Answer

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 
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

Question 13

​A supply curve slopes upwards because

Accepted Answer

A) ​the higher the price the lower the quantity that the sellers are willing to supply 
B) the higher the price the higher the quantity that the sellers are willing to supply 
C) the quantity supplied in insensitive to price 
D) ​an increase in price brings the quantity sold down to zero 
A) ​the higher the price the lower the quantity that the sellers are willing to supply 
B) the higher the price the higher the quantity that the sellers are willing to supply 
C) the quantity supplied in insensitive to price 
D) ​an increase in price brings the quantity sold down to zero

Question 14

Nutella and Hazelnuts
A key ingredient of Nutella is hazelnuts which are grown mostly around the Black Sea in Turkey.Nutella uses about a quarter of the world crop.Two things have occurred recently.Nutella is becoming more popular worldwide and a frost destroyed much of this season's crop.How do these occurrences affect the market for hazelnuts?

Accepted Answer

The increased popularity of Nutella shif

Question 15

​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?

Accepted Answer

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 
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

Question 16

​In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.What could the market price be in order to induce five sellers to offer their cars for sale?

Accepted Answer

A) ​$4001 
B) $5001 
C) $6001 
D) ​$7001 
A) ​$4001 
B) $5001 
C) $6001 
D) ​$7001

Question 17

​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 is free to choose the number of transactions he can make,what is his maximum profit?

Accepted Answer

A) ​$8 
B) $10 
C) $18 
D) ​$28 
A) ​$8 
B) $10 
C) $18 
D) ​$28

Question 18

​People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.This would make the price for peanut butter_____________ and the quantity demanded for peanut butter ____________.

Accepted Answer

A) ​Uncertain;decreases 
B) Decreases;increases 
C) Decreases;uncertain 
D) ​Increases;uncertain 
A) ​Uncertain;decreases 
B) Decreases;increases 
C) Decreases;uncertain 
D) ​Increases;uncertain

Question 19

​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.At the optimal bid,ask spread,what is the total profit that the market maker makes?

Accepted Answer

A) ​$8 
B) $12 
C) $18 
D) ​$20 
A) ​$8 
B) $12 
C) $18 
D) ​$20

Question 20

A recent medical study reports new benefits of cycling.Simultaneously,the price of the parts needed to make bikes falls.If the change in supply is greater than the change in demand,the price will _________ and the quantity will _________.​

Accepted Answer

A) ​Rise,rise 
B) Rise,fall 
C) Fall,rise 
D) ​Fall,fall 
A) ​Rise,rise 
B) Rise,fall 
C) Fall,rise 
D) ​Fall,fall

All these factors would shift the supply curve of tobacco,except

Assuming that beer is a normal good,what will happen to the demand for beer near college towns if student income increased?

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 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 makes three transactions,what is his total profit?

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 bought and sold at the equilibrium price,what is his profit

Olive Oil Spain is the world's number 1 producer of olive oil,mostly in the southern Andalusia region.But very dry weather there has ravaged olive trees.What affect will the poor weather have on the olive oil market?

Natural Gas Boom Technological improvements in hydraulic fracturing,or "Fracking," have decreased the cost of extracting smaller pockets of natural gas.What affect does this have on supply and demand as well as on the equilibrium price and quantity?

An increase in income causes the demand of normal goods to _________ and the price of normal goods to

An increase in the price of laptop memory chips causes the price for laptops _ and the quantity supplied for laptops .

In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.If the equilibrium price in the market is $2500,how many cars would be sold?

People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.How does this affect the market for peanut butter?

A supply curve slopes upwards because

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?

In the market for used cars we have 10 sellers,willing to sell at the prices of $1000,$2000,$3000,$4000,$5000,$6000,$7000,$8000,$9000,$10000.What could the market price be in order to induce five sellers to offer their cars for sale?

People like consuming peanut butter and jelly together.The price of peanuts increases.At the same time,we see the price for Jelly rise.This would make the price for peanut butter_ and the quantity demanded for peanut butter .

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.At the optimal bid,ask spread,what is the total profit that the market maker makes?

A recent medical study reports new benefits of cycling.Simultaneously,the price of the parts needed to make bikes falls.If the change in supply is greater than the change in demand,the price will _ and the quantity will _.

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 7: Understanding Markets and Industry Changes