Ivy Software MBA Prepworks Fundamentals of
Economics Exam Newest 2026 Questions and
Correct Detailed Answers Already Graded A+
whenever marginal cost is higher than average variable cost or average
total cost, the average variable cost or average total cost must
increase
decrease
stay the same - CORRECT ANSWER-increase
whenever marginal cost is lower than average variable cost or average
total cost, then the average variable cost or the average total cost must
increase
decrease
stay the same - CORRECT ANSWER-decrease
whenever the marginal cost curve crosses the average variable or total
cost curve then the values are
higher
lower
equal - CORRECT ANSWER-equal
price takers - CORRECT ANSWER-businesses operating in a perfectly
competitive industry
,in a perfectly competitive industry, market prices are determined by -
CORRECT ANSWER-the interaction of the market demand and market
supply curves
total revenue - CORRECT ANSWER-calculated by multiplying price and
quantity or Marginal Revenue and quantity
market price - CORRECT ANSWER-change in total revenue resulting from a
on-unit increase in the quantity sold equals the market price.
in the pursuit of maximizing profits, business owners are constrained in two
fundamental ways: - CORRECT ANSWER-1) the competency of its
employees and the market prices of inputs into the production process
dictate the costs of producing output
2) the price that a perfectly competitive business can charge is determined
by the market, and not the business owner
long run decision - CORRECT ANSWER-states that a business should exit
the industry if production at the profit maximizing quantity where (MR=MC)
generates total revenues that are less than total cost. Otherwise they stay
open.
three characteristics of a monopolistic industry include: - CORRECT
ANSWER-1) there are many buyers and only one seller
2) the good is heterogeneous, and
,3) barriers to entering the market exist (ie: patents are barriers that make it
illegal for someone to produce a product without permission from the patent
owner)
price setter - CORRECT ANSWER-in a monopolistic industry, because there
is only one seller of a product the business owner actually goes through a
process of setting the price of its product, a task that competitive firms are
unable to do. Thus monopolistic firms are called price setters.
constraints of a monopoly - CORRECT ANSWER-1) ....?
2) the market demand
three decisions faced by a monopoly - CORRECT ANSWER-1) determine
the profit maximizing quantity to produce
2) decide what price to charge
3) because this is the short run, decide whether to produce or shut down
the business for a short period of time.
profit maximizing quantity - CORRECT ANSWER-marginal revenue equals
marginal cost
The main concept demonstrated in the production possibilities frontier is -
CORRECT ANSWER-Opportunity cost
, When country A has a lower opportunity cost of producing sugar relative to
country B, then country A is said to have - CORRECT ANSWER-
Comparative Advantage
A graph that shows the combinations of two goods that the economy can
produce given the available scarce resources and available technology is
called a - CORRECT ANSWER-Production Possibilities Frontier
Assume a production possibilities frontier for pickup trucks and big Mac
hamburgers. The economy is producing 20 big Mac hamburgers and 65
pickup trucks (point 20, 65). What is the opportunity cost of producing an
additional 20 Big Mac hamburgers (point 40, 60)? - CORRECT ANSWER-
Five Pickup Trucks
The opportunity cost of an item is - CORRECT ANSWER-whatever must be
given up to obtain the item.
Consider market for pork, suppose that price of beef, a substitute for pork,
increases. Because of the change in price of beef, the equilibrium price of
pork...? - CORRECT ANSWER-Increases
Consider the market for pork, suppose that the price of beef, a substitute
for pork, increases. Because of this change in the price of beef, the
equilibrium quantity of pork will...? - CORRECT ANSWER-Increase because
increase in price of beef causes demand curve for pork to shift North East.
B/c of this shift, the equilibrium quantity of pork will increase.
Economics Exam Newest 2026 Questions and
Correct Detailed Answers Already Graded A+
whenever marginal cost is higher than average variable cost or average
total cost, the average variable cost or average total cost must
increase
decrease
stay the same - CORRECT ANSWER-increase
whenever marginal cost is lower than average variable cost or average
total cost, then the average variable cost or the average total cost must
increase
decrease
stay the same - CORRECT ANSWER-decrease
whenever the marginal cost curve crosses the average variable or total
cost curve then the values are
higher
lower
equal - CORRECT ANSWER-equal
price takers - CORRECT ANSWER-businesses operating in a perfectly
competitive industry
,in a perfectly competitive industry, market prices are determined by -
CORRECT ANSWER-the interaction of the market demand and market
supply curves
total revenue - CORRECT ANSWER-calculated by multiplying price and
quantity or Marginal Revenue and quantity
market price - CORRECT ANSWER-change in total revenue resulting from a
on-unit increase in the quantity sold equals the market price.
in the pursuit of maximizing profits, business owners are constrained in two
fundamental ways: - CORRECT ANSWER-1) the competency of its
employees and the market prices of inputs into the production process
dictate the costs of producing output
2) the price that a perfectly competitive business can charge is determined
by the market, and not the business owner
long run decision - CORRECT ANSWER-states that a business should exit
the industry if production at the profit maximizing quantity where (MR=MC)
generates total revenues that are less than total cost. Otherwise they stay
open.
three characteristics of a monopolistic industry include: - CORRECT
ANSWER-1) there are many buyers and only one seller
2) the good is heterogeneous, and
,3) barriers to entering the market exist (ie: patents are barriers that make it
illegal for someone to produce a product without permission from the patent
owner)
price setter - CORRECT ANSWER-in a monopolistic industry, because there
is only one seller of a product the business owner actually goes through a
process of setting the price of its product, a task that competitive firms are
unable to do. Thus monopolistic firms are called price setters.
constraints of a monopoly - CORRECT ANSWER-1) ....?
2) the market demand
three decisions faced by a monopoly - CORRECT ANSWER-1) determine
the profit maximizing quantity to produce
2) decide what price to charge
3) because this is the short run, decide whether to produce or shut down
the business for a short period of time.
profit maximizing quantity - CORRECT ANSWER-marginal revenue equals
marginal cost
The main concept demonstrated in the production possibilities frontier is -
CORRECT ANSWER-Opportunity cost
, When country A has a lower opportunity cost of producing sugar relative to
country B, then country A is said to have - CORRECT ANSWER-
Comparative Advantage
A graph that shows the combinations of two goods that the economy can
produce given the available scarce resources and available technology is
called a - CORRECT ANSWER-Production Possibilities Frontier
Assume a production possibilities frontier for pickup trucks and big Mac
hamburgers. The economy is producing 20 big Mac hamburgers and 65
pickup trucks (point 20, 65). What is the opportunity cost of producing an
additional 20 Big Mac hamburgers (point 40, 60)? - CORRECT ANSWER-
Five Pickup Trucks
The opportunity cost of an item is - CORRECT ANSWER-whatever must be
given up to obtain the item.
Consider market for pork, suppose that price of beef, a substitute for pork,
increases. Because of the change in price of beef, the equilibrium price of
pork...? - CORRECT ANSWER-Increases
Consider the market for pork, suppose that the price of beef, a substitute
for pork, increases. Because of this change in the price of beef, the
equilibrium quantity of pork will...? - CORRECT ANSWER-Increase because
increase in price of beef causes demand curve for pork to shift North East.
B/c of this shift, the equilibrium quantity of pork will increase.
