Question 1

A demand curve:

Accepted Answer

A)  shows what quantities would be supplied at various possible prices. 
B)  shows how total revenue increases as prices decrease. 
C)  is usually up-sloping from left to right. 
D)  is formed by plotting the data from a demand schedule. 
E)  All of these alternatives are correct. 
A)  shows what quantities would be supplied at various possible prices. 
B)  shows how total revenue increases as prices decrease. 
C)  is usually up-sloping from left to right. 
D)  is formed by plotting the data from a demand schedule. 
E)  All of these alternatives are correct.

Question 2

Elasticity of demand is defined in terms of changes in total costs of production.

Accepted Answer

A) True 
 B)False

Question 3

If a firm's total revenue DECREASES when the price of its product is raised from $50 to $55, the demand for this product between these two prices is:

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  Cannot tell from what is given. 
A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  Cannot tell from what is given.

Question 4

If a firm's total revenue INCREASES when the price of its product is reduced from $90 to $50, the demand for this product between these two points is:

Accepted Answer

A)  inelastic. 
B)  unitary elastic. 
C)  elastic. 
D)  Cannot tell from what is given. 
A)  inelastic. 
B)  unitary elastic. 
C)  elastic. 
D)  Cannot tell from what is given.

Question 5

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 these alternatives is correct. 
A)  monopoly 
B)  pure competition 
C)  monopolistic competition 
D)  oligopoly 
E)  Any of these alternatives is correct.

Question 6

Pure competition develops when a market has:

Accepted Answer

A)  uninformed buyers and sellers. 
B)  heterogeneous products. 
C)  many buyers and sellers. 
D)  limited entry for buyers and sellers. 
E)  None of these alternatives is correct. 
A)  uninformed buyers and sellers. 
B)  heterogeneous products. 
C)  many buyers and sellers. 
D)  limited entry for buyers and sellers. 
E)  None of these alternatives is correct.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The SHORT-RUN market adjustment for a homogeneous product, like wheat, following a decrease in demand would most likely be:

Accepted Answer

A)  an increase in production. 
B)  a decrease in price. 
C)  a decrease in production. 
D)  a decrease in demand for available substitutes. 
E)  an increase in price. 
A)  an increase in production. 
B)  a decrease in price. 
C)  a decrease in production. 
D)  a decrease in demand for available substitutes. 
E)  an increase in price.

Question 9

In monopolistic competition, individual firms have down-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 10

When few substitutes are available, demand will tend to be more elastic.

Accepted Answer

A) True 
 B)False

Question 11

A demand schedule shows the relationship between price and quantity demanded in a market.

Accepted Answer

A) True 
 B)False

Question 12

A firm in monopolistic competition faces no competition, so it can set its price at any level.

Accepted Answer

A) True 
 B)False

Question 13

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 these alternatives are correct. 
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 these alternatives are correct.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about demand and supply interaction is TRUE?

Accepted Answer

A)  A market is said to be in equilibrium when the elasticity of demand equals the elasticity of supply. 
B)  For a market to be in equilibrium, the price and quantity that buyers are willing to accept must be greater than the price and quantity that suppliers are willing to offer. 
C)  The interaction of supply and demand determines the size of the market and the market price. 
D)  Demand determines price. 
E)  All of these statements about demand and supply interaction are TRUE. 
A)  A market is said to be in equilibrium when the elasticity of demand equals the elasticity of supply. 
B)  For a market to be in equilibrium, the price and quantity that buyers are willing to accept must be greater than the price and quantity that suppliers are willing to offer. 
C)  The interaction of supply and demand determines the size of the market and the market price. 
D)  Demand determines price. 
E)  All of these statements about demand and supply interaction are TRUE.

Question 16

A demand curve is a graph of the relationship between price and quantity in a market--assuming that all other things stay the same.

Accepted Answer

A) True 
 B)False

Question 17

A single demand curve can have both elastic and inelastic parts over different price ranges.

Accepted Answer

A) True 
 B)False

Question 18

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 these is correct. 
A)  pure competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
E)  Any of these is correct.

Question 19

When a demand curve is INELASTIC:

Accepted Answer

A)  if price goes down, then total revenue stays the same. 
B)  if price goes up, then total revenue stays the same. 
C)  if price goes down, then total revenue goes down. 
D)  if price goes up, then total revenue goes down. 
A)  if price goes down, then total revenue stays the same. 
B)  if price goes up, then total revenue stays the same. 
C)  if price goes down, then total revenue goes down. 
D)  if price goes up, then total revenue goes down.

Question 20

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

Accepted Answer

A) True 
 B)False

A demand curve:

Elasticity of demand is defined in terms of changes in total costs of production.

If a firm's total revenue DECREASES when the price of its product is raised from $50 to $55, the demand for this product between these two prices is:

If a firm's total revenue INCREASES when the price of its product is reduced from $90 to $50, the demand for this product between these two points is:

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

Pure competition develops when a market has:

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

The SHORT-RUN market adjustment for a homogeneous product, like wheat, following a decrease in demand would most likely be:

In monopolistic competition, individual firms have down-sloping demand curves.

When few substitutes are available, demand will tend to be more elastic.

A demand schedule shows the relationship between price and quantity demanded in a market.

A firm in monopolistic competition faces no competition, so it can set its price at any level.

Monopolistic competition occurs when an individual firm

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

Which of the following statements about demand and supply interaction is TRUE?

A demand curve is a graph of the relationship between price and quantity in a market--assuming that all other things stay the same.

A single demand curve can have both elastic and inelastic parts over different price ranges.

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

When a demand curve is INELASTIC:

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

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

A demand curve:

Elasticity of demand is defined in terms of changes in total costs of production.

If a firm's total revenue DECREASES when the price of its product is raised from $50 to $55, the demand for this product between these two prices is:

If a firm's total revenue INCREASES when the price of its product is reduced from $90 to $50, the demand for this product between these two points is:

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

Pure competition develops when a market has:

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

The SHORT-RUN market adjustment for a homogeneous product, like wheat, following a decrease in demand would most likely be:

In monopolistic competition, individual firms have down-sloping demand curves.

When few substitutes are available, demand will tend to be more elastic.

A demand schedule shows the relationship between price and quantity demanded in a market.

A firm in monopolistic competition faces no competition, so it can set its price at any level.

Monopolistic competition occurs when an individual firm

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

Which of the following statements about demand and supply interaction is TRUE?

A demand curve is a graph of the relationship between price and quantity in a market--assuming that all other things stay the same.

A single demand curve can have both elastic and inelastic parts over different price ranges.

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

When a demand curve is INELASTIC:

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

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