1|Page
Ivy Software MBA Prepworks Fundamentals of
Economics (2026/2027) EXAM ||VERIFIED EXAM!!!||
MOST RECENT EXAM ACTUAL COMPLETE REAL
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED SUCCESS!! NEWEST EXAM!!!
Consider the market for pork. Suppose that disposable
income increases and pork is an inferior good. Because of
that change in income, the equilibrium price of pork...? -
Answer-Decreases because the increase in disposable
income causes the demand curve for pork to shift south
west, because pork is an inferior good. because of this
shift, the equilibrium price of pork decreases.
Consider the market for pork. Suppose that 1) disposable
income increases and pork is a normal good, And 2) the
price of hog feed decreases. Because of these changes,
the equilibrium price of pork is... - Answer-Indeterminate
because the increase in disposable income causes the
demand curve for pork to shift north east because pork is
a normal good. The decrease in price of hog feed causes
the supply curve to shift to the south east. The net effect of
these shifts leaves us unable to say what will happen to
the equilibrium price of pork.
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Consider the market for pork. Suppose that disposable
income increases and pork is a normal good and the price
of hog feed decreases. The equilibrium quantity of pork...?
- Answer-Increases.
Suppose the price elasticity for demand for retail phone
service in the US is 0.95. If the # of retail substitutes for
retail telephone service increases, will the price elasticity
of demand become more elastic or more inelastic? -
Answer-Elastic. When the number of substitute products
increases, the price elasticity of demand will become more
elastic. consumers become more sensitive to price when
they have more options to choose among.
True or False: the law of demand states that if the price of
a good increases, CP, then the quantity demanded of that
good will increase. - Answer-False. quantity demanded of
that good will decrease.
Suppose the cross-price elasticity of demand for home
heating oil with respect to the price of natural gas is +0.6.
This number tells us that home heating oil and natural gas
are substitute or compliment goods? - Answer-Substitute
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goods. When the cross price elasticity is positive then they
are substitutes.
Consider the market for mustard which is a complement to
hot dogs. Suppose the price of hot dogs increase. What
happens to the equilibrium price and equilibrium quantity
of the mustard market? - Answer-Equilibrium price
decreases and equilibrium quantity decreases. The price
of hot dogs is an independent variable in the demand
function for mustard. This is because hot dogs and
mustard are complementary goods. Therefore, if the price
of hot dogs increases, then the demand curve for mustard
shifts to the south-west. People demand less mustard at
every price when hot dogs are more expensive. In the
mustard market, the equilibrium price decreases and
equilibrium quantity decreases.
profit maximizing rule - Answer-a business maximizes
profits when it produces where the marginal revenue from
selling another unit equals the marginal cost of producing
another unit.
Marginal Revenue=Marginal Cost
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Marginal cost - Answer-is equal to the change in the total
cost that arises from an extra unit of production. It is
calculated by taking the change in total cost and dividing it
by the change in the quantity produced
=change in TC/change in Q
Marginal revenue - Answer-is the change in total revenue
generated from an additional unit sold. It is calculated by
taking the change in total revenue divided by the change
in quantity sold
Short Run - Answer-a time horizon where some fixed
costs exist.
is a time horizon within which a business is unable to
adjust at least one input because there is a fixed cost of
some kind.
we think in terms of the short run not the long run
Long Run - Answer-a situation where the fixed costs (the
inputs) become variable. a time horizon long enough for
the seller to adjust all inputs. If you observe a business
with no fixed costs, then it is in a long run state.
Ivy Software MBA Prepworks Fundamentals of
Economics (2026/2027) EXAM ||VERIFIED EXAM!!!||
MOST RECENT EXAM ACTUAL COMPLETE REAL
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED SUCCESS!! NEWEST EXAM!!!
Consider the market for pork. Suppose that disposable
income increases and pork is an inferior good. Because of
that change in income, the equilibrium price of pork...? -
Answer-Decreases because the increase in disposable
income causes the demand curve for pork to shift south
west, because pork is an inferior good. because of this
shift, the equilibrium price of pork decreases.
Consider the market for pork. Suppose that 1) disposable
income increases and pork is a normal good, And 2) the
price of hog feed decreases. Because of these changes,
the equilibrium price of pork is... - Answer-Indeterminate
because the increase in disposable income causes the
demand curve for pork to shift north east because pork is
a normal good. The decrease in price of hog feed causes
the supply curve to shift to the south east. The net effect of
these shifts leaves us unable to say what will happen to
the equilibrium price of pork.
,2|Page
Consider the market for pork. Suppose that disposable
income increases and pork is a normal good and the price
of hog feed decreases. The equilibrium quantity of pork...?
- Answer-Increases.
Suppose the price elasticity for demand for retail phone
service in the US is 0.95. If the # of retail substitutes for
retail telephone service increases, will the price elasticity
of demand become more elastic or more inelastic? -
Answer-Elastic. When the number of substitute products
increases, the price elasticity of demand will become more
elastic. consumers become more sensitive to price when
they have more options to choose among.
True or False: the law of demand states that if the price of
a good increases, CP, then the quantity demanded of that
good will increase. - Answer-False. quantity demanded of
that good will decrease.
Suppose the cross-price elasticity of demand for home
heating oil with respect to the price of natural gas is +0.6.
This number tells us that home heating oil and natural gas
are substitute or compliment goods? - Answer-Substitute
,3|Page
goods. When the cross price elasticity is positive then they
are substitutes.
Consider the market for mustard which is a complement to
hot dogs. Suppose the price of hot dogs increase. What
happens to the equilibrium price and equilibrium quantity
of the mustard market? - Answer-Equilibrium price
decreases and equilibrium quantity decreases. The price
of hot dogs is an independent variable in the demand
function for mustard. This is because hot dogs and
mustard are complementary goods. Therefore, if the price
of hot dogs increases, then the demand curve for mustard
shifts to the south-west. People demand less mustard at
every price when hot dogs are more expensive. In the
mustard market, the equilibrium price decreases and
equilibrium quantity decreases.
profit maximizing rule - Answer-a business maximizes
profits when it produces where the marginal revenue from
selling another unit equals the marginal cost of producing
another unit.
Marginal Revenue=Marginal Cost
, 4|Page
Marginal cost - Answer-is equal to the change in the total
cost that arises from an extra unit of production. It is
calculated by taking the change in total cost and dividing it
by the change in the quantity produced
=change in TC/change in Q
Marginal revenue - Answer-is the change in total revenue
generated from an additional unit sold. It is calculated by
taking the change in total revenue divided by the change
in quantity sold
Short Run - Answer-a time horizon where some fixed
costs exist.
is a time horizon within which a business is unable to
adjust at least one input because there is a fixed cost of
some kind.
we think in terms of the short run not the long run
Long Run - Answer-a situation where the fixed costs (the
inputs) become variable. a time horizon long enough for
the seller to adjust all inputs. If you observe a business
with no fixed costs, then it is in a long run state.
