Question 1

Which of the following products would have the MOST INELASTIC (or least elastic) INDUSTRY demand?

Accepted Answer

A)  Videotape recording system 
B)  Microwave ovens 
C)  Oranges 
D)  Gas for heating homes 
E)  Chicken 
A)  Videotape recording system 
B)  Microwave ovens 
C)  Oranges 
D)  Gas for heating homes 
E)  Chicken

Question 2

Monopolistic competition occurs when an individual firm

Accepted Answer

A)  obtains complete control over prices--through collusion. 
B)  differentiates its product from competitors--in the eyes of some customers. 
C)  develops products which have no substitutes. 
D)  obtains complete control of the supply of a product. 
E)  All of the above. 
A)  obtains complete control over prices--through collusion. 
B)  differentiates its product from competitors--in the eyes of some customers. 
C)  develops products which have no substitutes. 
D)  obtains complete control of the supply of a product. 
E)  All of the above.

Question 3

The "equilibrium point" is where:

Accepted Answer

A)  the quantity and price sellers are willing to offer equal the quantity and price that buyers are willing to accept. 
B)  the quantity demanded equals its cost. 
C)  the market price is at its minimum. 
D)  the elasticity of demand equals the elasticity of supply. 
E)  the market price is at its maximum. 
A)  the quantity and price sellers are willing to offer equal the quantity and price that buyers are willing to accept. 
B)  the quantity demanded equals its cost. 
C)  the market price is at its minimum. 
D)  the elasticity of demand equals the elasticity of supply. 
E)  the market price is at its maximum.

Question 4

A firm in pure competition will:

Accepted Answer

A)  advertise its product to tell potential customers about its unique product. 
B)  be able to set its own price level. 
C)  have to accept the going price. 
D)  be able to increase its total revenue only by lowering its price. 
E)  All of the above. 
A)  advertise its product to tell potential customers about its unique product. 
B)  be able to set its own price level. 
C)  have to accept the going price. 
D)  be able to increase its total revenue only by lowering its price. 
E)  All of the above.

Question 5

In pure competition situations, each seller usually has a lot of control over his price because of the lack of competitive substitutes.

Accepted Answer

A) True 
 B)False

Question 6

If demand is inelastic, then total revenue would increase if price were lowered.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would probably be an oligopoly in a U.S. market?

Accepted Answer

A)  A gift shop at an art museum. 
B)  U.S. Steel (USX). 
C)  A "7 to 11" convenience food store. 
D)  A Ford car dealership in a small town. 
E)  All of the above. 
A)  A gift shop at an art museum. 
B)  U.S. Steel (USX). 
C)  A "7 to 11" convenience food store. 
D)  A Ford car dealership in a small town. 
E)  All of the above.

Question 8

If supply is elastic, the supply curve will be nearly vertical.

Accepted Answer

A) True 
 B)False

Question 9

A market which has relatively few sellers, homogeneous products, and fairly inelastic industry demand is an example of a(an) ______________ market situation.

Accepted Answer

A)  pure competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  Any of the above. 
A)  pure competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  Any of the above.

Question 10

A market situation with homogeneous products, many informed buyers and sellers, and ease of entry is a ______________ market situation.

Accepted Answer

A)  oligopoly 
B)  monopolistic competition 
C)  monopoly 
D)  pure competition 
E)  both B and C 
A)  oligopoly 
B)  monopolistic competition 
C)  monopoly 
D)  pure competition 
E)  both B and C

Question 11

Most customers want more products than they can afford to buy.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about the competitive environment is TRUE?

Accepted Answer

A)  In monopolistic competition a seller has a down-sloping demand curve due to the lack of any substitute products. 
B)  In pure competition, an individual firm is usually faced with a very inelastic demand curve. 
C)  Firms in oligopoly should avoid price cutting. 
D)  The industry demand curve in oligopoly is usually horizontal. 
E)  All of the above. 
A)  In monopolistic competition a seller has a down-sloping demand curve due to the lack of any substitute products. 
B)  In pure competition, an individual firm is usually faced with a very inelastic demand curve. 
C)  Firms in oligopoly should avoid price cutting. 
D)  The industry demand curve in oligopoly is usually horizontal. 
E)  All of the above.

Question 13

The "law of diminishing demand" says that:

Accepted Answer

A)  if the price of a product is lowered, usually the same quantity will be demanded. 
B)  if the price of a product is raised, a smaller quantity will be demanded. 
C)  the demand for any product will tend to decline over time. 
D)  the more of a product a person buys, the less utility that particular product offers him. 
E)  if the price of a product is lowered, a smaller quantity will be demanded. 
A)  if the price of a product is lowered, usually the same quantity will be demanded. 
B)  if the price of a product is raised, a smaller quantity will be demanded. 
C)  the demand for any product will tend to decline over time. 
D)  the more of a product a person buys, the less utility that particular product offers him. 
E)  if the price of a product is lowered, a smaller quantity will be demanded.

Question 14

Some customers get a consumer surplus because they would be willing to pay more than the market price.

Accepted Answer

A) True 
 B)False

Question 15

In monopolistic competition, sellers feel they have some competition in a market and consumers see competitive products as heterogeneous.

Accepted Answer

A) True 
 B)False

Question 16

In the following table, select the quantity interval in which demand is elastic.

Accepted Answer

A)  28-40 units 
B)  40-60 units 
C)  10-16 units 
D)  16-22 units 
E)  22-28 units 
A)  28-40 units 
B)  40-60 units 
C)  10-16 units 
D)  16-22 units 
E)  22-28 units

Question 17

A market with several firms competing, some promotion, and some differences among products is in a(an) ______________ market situation.

Accepted Answer

A)  monopoly 
B)  pure competition 
C)  monopolistic competition 
D)  oligopoly 
E)  Any of the above. 
A)  monopoly 
B)  pure competition 
C)  monopolistic competition 
D)  oligopoly 
E)  Any of the above.

Question 18

Given generally elastic demand and supply curves for an industry, an INCREASE in supply will (all other things being equal):

Accepted Answer

A)  lower price but not change quantity demanded. 
B)  increase price and increase quantity demanded. 
C)  increase price and decrease quantity demanded. 
D)  lower price and increase quantity demanded. 
E)  not change anything else. 
A)  lower price but not change quantity demanded. 
B)  increase price and increase quantity demanded. 
C)  increase price and decrease quantity demanded. 
D)  lower price and increase quantity demanded. 
E)  not change anything else.

Question 19

The equilibrium point is where the quantity and price that sellers are willing to offer are greater than the quantity and price that buyers are willing to accept.

Accepted Answer

A) True 
 B)False

Question 20

If demand is elastic, then total revenue would decrease if price were raised.

Accepted Answer

A) True 
 B)False

Exam 22: Economics Fundamentals

Which of the following products would have the MOST INELASTIC (or least elastic) INDUSTRY demand?

Monopolistic competition occurs when an individual firm

The "equilibrium point" is where:

A firm in pure competition will:

In pure competition situations, each seller usually has a lot of control over his price because of the lack of competitive substitutes.

If demand is inelastic, then total revenue would increase if price were lowered.

Which of the following would probably be an oligopoly in a U.S. market?

If supply is elastic, the supply curve will be nearly vertical.

A market which has relatively few sellers, homogeneous products, and fairly inelastic industry demand is an example of a(an) ______________ market situation.

A market situation with homogeneous products, many informed buyers and sellers, and ease of entry is a ______________ market situation.

Most customers want more products than they can afford to buy.

Which of the following statements about the competitive environment is TRUE?

The "law of diminishing demand" says that:

Some customers get a consumer surplus because they would be willing to pay more than the market price.

In monopolistic competition, sellers feel they have some competition in a market and consumers see competitive products as heterogeneous.

In the following table, select the quantity interval in which demand is elastic.

A market with several firms competing, some promotion, and some differences among products is in a(an) ______________ market situation.

Given generally elastic demand and supply curves for an industry, an INCREASE in supply will (all other things being equal):

The equilibrium point is where the quantity and price that sellers are willing to offer are greater than the quantity and price that buyers are willing to accept.

If demand is elastic, then total revenue would decrease if price were raised.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Marketing Arithmetic

Filters