MBA 701 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
Which of the following will cause a change in quantity supplied?
a change in the market price of the good
Demand: Qd = 50 − 4 P
Supply: Qs = 20 + 2 P
If the price is $2, there is a
shortage of 18 units.
In markets characterized by monopolistic competition,
entry into the market is relatively easy so that profit in the long run is zero.
When a firm is a price-taking firm
raising the price of the product above the market-determined price will cause sales to
fall nearly to zero
many other firms produce a product that is identical to the output produced by the rest
of the firms in the industry
the price of the product it sells is determined by the intersection of the market demand
and supply curves for the product
If the price of a complement for tires decreases, all else equal,
demand for tires will increase.
, Economic profit
is negative when total costs exceed total revenues
Which of the following would decrease the demand for tennis balls?
a decrease in average household income when tennis balls are a normal good
Economic profit is the difference between
total revenue and the opportunity cost of all of the resources used in production.
In a perfectly competitive market
all firms produce and sell a standardized or undifferentiated product.
A risk premium is
a measure calculated to reflect the riskiness of future profits.
The principal-agent problem arises when
both "the principal and the agent have different objectives" and "the principal cannot
enforce the contract with the agent or finds it too costly to monitor the agent".
The market demand curve for a given good shifts when there is a change in any
of the following factors except
the price of the good.
Suppose an individual buyer values a pound of butter at $10. If the market price
of butter is $8, what is the consumer surplus for this buyer?
$2
A price-setting firm
can lower the price of its product and sell more units.
Consumer surplus
COMPLETE SOLUTIONS VERIFIED
Which of the following will cause a change in quantity supplied?
a change in the market price of the good
Demand: Qd = 50 − 4 P
Supply: Qs = 20 + 2 P
If the price is $2, there is a
shortage of 18 units.
In markets characterized by monopolistic competition,
entry into the market is relatively easy so that profit in the long run is zero.
When a firm is a price-taking firm
raising the price of the product above the market-determined price will cause sales to
fall nearly to zero
many other firms produce a product that is identical to the output produced by the rest
of the firms in the industry
the price of the product it sells is determined by the intersection of the market demand
and supply curves for the product
If the price of a complement for tires decreases, all else equal,
demand for tires will increase.
, Economic profit
is negative when total costs exceed total revenues
Which of the following would decrease the demand for tennis balls?
a decrease in average household income when tennis balls are a normal good
Economic profit is the difference between
total revenue and the opportunity cost of all of the resources used in production.
In a perfectly competitive market
all firms produce and sell a standardized or undifferentiated product.
A risk premium is
a measure calculated to reflect the riskiness of future profits.
The principal-agent problem arises when
both "the principal and the agent have different objectives" and "the principal cannot
enforce the contract with the agent or finds it too costly to monitor the agent".
The market demand curve for a given good shifts when there is a change in any
of the following factors except
the price of the good.
Suppose an individual buyer values a pound of butter at $10. If the market price
of butter is $8, what is the consumer surplus for this buyer?
$2
A price-setting firm
can lower the price of its product and sell more units.
Consumer surplus
