Question 1

The availability of substitutes is one important factor affecting whether the demand for a product is elastic or inelastic.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is the best example of a monopoly situation?

Accepted Answer

A)  A movie theater with one snack bar for popcorn and soft drinks. 
B)  Jewelry stores in Paris. 
C)  A farmers' market with many farmers selling sweet corn. 
D)  The only Domino's Pizza in a large university town. 
E)  A small town--some distance from any others--with only three drugstores. 
A)  A movie theater with one snack bar for popcorn and soft drinks. 
B)  Jewelry stores in Paris. 
C)  A farmers' market with many farmers selling sweet corn. 
D)  The only Domino's Pizza in a large university town. 
E)  A small town--some distance from any others--with only three drugstores. A

Question 3

Which of the following statements about oligopoly situations is TRUE?

Accepted Answer

A)  "Price cutters" face fairly elastic demand curves. 
B)  Cutting prices can lead to everyone losing sales revenue. 
C)  Many large sellers are competing with each other. 
D)  Essentially heterogeneous products are offered by many competitors. 
E)  None of these statements about oligopoly situations is TRUE. 
A)  "Price cutters" face fairly elastic demand curves. 
B)  Cutting prices can lead to everyone losing sales revenue. 
C)  Many large sellers are competing with each other. 
D)  Essentially heterogeneous products are offered by many competitors. 
E)  None of these statements about oligopoly situations is TRUE. B

Question 4

A "demand schedule:"

Accepted Answer

A)  shows how much a firm is willing to sell at a particular price. 
B)  is published regularly by the U.S. government and other governments. 
C)  is a table which shows the relationship between price and quantity demanded in a market. 
D)  is usually the same for all products. 
E)  None of these alternatives is correct. 
A)  shows how much a firm is willing to sell at a particular price. 
B)  is published regularly by the U.S. government and other governments. 
C)  is a table which shows the relationship between price and quantity demanded in a market. 
D)  is usually the same for all products. 
E)  None of these alternatives is correct.

Question 5

The elasticity of the firm's demand curve, the number and size of competitors, and the uniqueness of the firm's marketing mix all affect the nature of the competitive situation.

Accepted Answer

A) True 
 B)False

Question 6

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 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 these would probably be oligopolies in a U.S. market. 
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 these would probably be oligopolies in a U.S. market.

Question 8

In oligopoly situations:

Accepted Answer

A)  prices tend to be rigid and similar--because of price-fixing agreements. 
B)  price wars may occur if a firm seeks to increase its market share by cutting price. 
C)  a firm faces an INELASTIC demand curve if it raises price. 
D)  the quantity offered changes a lot due to the lack of a fixed market price. 
E)  All of these alternatives are correct. 
A)  prices tend to be rigid and similar--because of price-fixing agreements. 
B)  price wars may occur if a firm seeks to increase its market share by cutting price. 
C)  a firm faces an INELASTIC demand curve if it raises price. 
D)  the quantity offered changes a lot due to the lack of a fixed market price. 
E)  All of these alternatives are correct.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Monopolistic competition develops when a market is dominated by one large seller and a lot of small firms.

Accepted Answer

A) True 
 B)False

Question 11

Pure competition exists when a market has homogeneous products, many buyers and sellers, and ease of entry for buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 12

"Kinked" demand curves:

Accepted Answer

A)  are sometimes found in pure competition. 
B)  are inelastic above the "kink" and elastic below the "kink." 
C)  are typical of monopolistic competition. 
D)  tend to encourage a stable price in a product-market. 
E)  All of these alternatives are correct. 
A)  are sometimes found in pure competition. 
B)  are inelastic above the "kink" and elastic below the "kink." 
C)  are typical of monopolistic competition. 
D)  tend to encourage a stable price in a product-market. 
E)  All of these alternatives are correct.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Pure competition occurs when a market has:

Accepted Answer

A)  homogeneous (similar) products. 
B)  easy entry for new sellers. 
C)  many buyers and sellers. 
D)  informed buyers and sellers. 
E)  All of these alternatives are correct. 
A)  homogeneous (similar) products. 
B)  easy entry for new sellers. 
C)  many buyers and sellers. 
D)  informed buyers and sellers. 
E)  All of these alternatives are correct.

Question 15

In which of the following situations would the seller(s) be most likely to face a "kinked" demand curve?

Accepted Answer

A)  A medium-sized airport with one gift shop. 
B)  A small town--some distance from any others--with three "off brand" gasoline stations at the major intersection. 
C)  Men's clothing stores in downtown Las Vegas. 
D)  A small community with one electric power company. 
E)  A farmers' market with one farmer selling honey. 
A)  A medium-sized airport with one gift shop. 
B)  A small town--some distance from any others--with three "off brand" gasoline stations at the major intersection. 
C)  Men's clothing stores in downtown Las Vegas. 
D)  A small community with one electric power company. 
E)  A farmers' market with one farmer selling honey.

Question 16

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 17

Monopolistic competition exists when:

Accepted Answer

A)  each competitor has its own kinked demand curve. 
B)  there is only one firm in the industry. 
C)  no substitute products are available for consumers in this market. 
D)  each firm in the market has differentiated its product from its competitors--in the eyes of some customers. 
E)  None of these alternatives is correct. 
A)  each competitor has its own kinked demand curve. 
B)  there is only one firm in the industry. 
C)  no substitute products are available for consumers in this market. 
D)  each firm in the market has differentiated its product from its competitors--in the eyes of some customers. 
E)  None of these alternatives is correct.

Question 18

If total revenue remains the same when price is raised or lowered, then we have the special case of "unitary elasticity of demand."

Accepted Answer

A) True 
 B)False

Question 19

Oligopoly situations develop when a market has:

Accepted Answer

A)  relatively few buyers. 
B)  elastic industry demand. 
C)  heterogeneous products. 
D)  relatively few sellers. 
E)  All of these alternatives are correct. 
A)  relatively few buyers. 
B)  elastic industry demand. 
C)  heterogeneous products. 
D)  relatively few sellers. 
E)  All of these alternatives are correct.

Question 20

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

The availability of substitutes is one important factor affecting whether the demand for a product is elastic or inelastic.

Which of the following is the best example of a monopoly situation?

Which of the following statements about oligopoly situations is TRUE?

A "demand schedule:"

The elasticity of the firm's demand curve, the number and size of competitors, and the uniqueness of the firm's marketing mix all affect the nature of the competitive situation.

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

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

In oligopoly situations:

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

Monopolistic competition develops when a market is dominated by one large seller and a lot of small firms.

Pure competition exists when a market has homogeneous products, many buyers and sellers, and ease of entry for buyers and sellers.

"Kinked" demand curves:

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

Pure competition occurs when a market has:

In which of the following situations would the seller(s) be most likely to face a "kinked" demand curve?

The "law of diminishing demand" says that:

Monopolistic competition exists when:

If total revenue remains the same when price is raised or lowered, then we have the special case of "unitary elasticity of demand."

Oligopoly situations develop when a market has:

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.

Marketing39s Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

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

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

Marketing Arithmetic

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Exam 19: Economics Fundamentals

The availability of substitutes is one important factor affecting whether the demand for a product is elastic or inelastic.

Which of the following is the best example of a monopoly situation?

Which of the following statements about oligopoly situations is TRUE?

A "demand schedule:"

The elasticity of the firm's demand curve, the number and size of competitors, and the uniqueness of the firm's marketing mix all affect the nature of the competitive situation.

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

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

In oligopoly situations:

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

Monopolistic competition develops when a market is dominated by one large seller and a lot of small firms.

Pure competition exists when a market has homogeneous products, many buyers and sellers, and ease of entry for buyers and sellers.

"Kinked" demand curves:

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

Pure competition occurs when a market has:

In which of the following situations would the seller(s) be most likely to face a "kinked" demand curve?

The "law of diminishing demand" says that:

Monopolistic competition exists when:

If total revenue remains the same when price is raised or lowered, then we have the special case of "unitary elasticity of demand."

Oligopoly situations develop when a market has:

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.

Marketing39s Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

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

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

Marketing Arithmetic

Filters