HBS CORE - ECONOMICS FOR
MANAGERS EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
A market's equilibrium outcome maximizes __ - ANS Total Surplus. Sum of Producer and
Consumer Surplus
Are auctions more effective when buyers' valuations are within a narrow range? Or when
buyers' valuations are widely spread out? - ANS Auctions are more effective when valuations
are within a narrow range, ensuring that the sale price will be close to the WTP of the second
highest bidder
As a business that exhibits network effects gains market share, buyers' WTP should __ -
ANS Increase. Buyers should be willing to pay more for their products
As more substitute goods become available, price elasiticity of demand ___ - ANS Increases.
The more substitute goods are available, the less willing consumers will be to put up with
increases in price
As more substitute goods become available, price elasticity of demand __. Why? -
ANS Increases. The more available are subtitute goods, the less willing consumers will be to
put up with increases in price
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, As price increases, the price elasticity of demand __? Why? - ANS Increases. The higher the
price, the less willing consumers will be to put up with additional increases in price
As price of a product increase, the price elasiticity of demand for that product ___ -
ANS Increases. The higher the price, the less willing consumers may be to accomodate
further increases in price
At what point in the demand/supply curve do all buyers and all sellers participate in the
transaction? - ANS Market Equilibrium
Businesses that exhibit network effects may experience __ growth - ANS Exponential
Conjoint Analysis - Definition - ANS Specialized survey that determines consumers'
preferences for individual features of a product by first ranking the importance of features and
then assigning values to each product attribute based on those features
Consumer Surplus - ANS Value to Buyers = WTP - Price
Elasticity - Definition & Formula - ANS Measure of the responsiveness in one variable to a
change in another variable.
e = % change in quantity/ % change in price
Elasticity vs Slope - ANS Elasticity vaires along a linear demand curve while slope remains
constant
Elements of Conjoint Analysis - ANS 1) Pair Wise Rankings
2) Infer Value from Rankings
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
MANAGERS EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
A market's equilibrium outcome maximizes __ - ANS Total Surplus. Sum of Producer and
Consumer Surplus
Are auctions more effective when buyers' valuations are within a narrow range? Or when
buyers' valuations are widely spread out? - ANS Auctions are more effective when valuations
are within a narrow range, ensuring that the sale price will be close to the WTP of the second
highest bidder
As a business that exhibits network effects gains market share, buyers' WTP should __ -
ANS Increase. Buyers should be willing to pay more for their products
As more substitute goods become available, price elasiticity of demand ___ - ANS Increases.
The more substitute goods are available, the less willing consumers will be to put up with
increases in price
As more substitute goods become available, price elasticity of demand __. Why? -
ANS Increases. The more available are subtitute goods, the less willing consumers will be to
put up with increases in price
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, As price increases, the price elasticity of demand __? Why? - ANS Increases. The higher the
price, the less willing consumers will be to put up with additional increases in price
As price of a product increase, the price elasiticity of demand for that product ___ -
ANS Increases. The higher the price, the less willing consumers may be to accomodate
further increases in price
At what point in the demand/supply curve do all buyers and all sellers participate in the
transaction? - ANS Market Equilibrium
Businesses that exhibit network effects may experience __ growth - ANS Exponential
Conjoint Analysis - Definition - ANS Specialized survey that determines consumers'
preferences for individual features of a product by first ranking the importance of features and
then assigning values to each product attribute based on those features
Consumer Surplus - ANS Value to Buyers = WTP - Price
Elasticity - Definition & Formula - ANS Measure of the responsiveness in one variable to a
change in another variable.
e = % change in quantity/ % change in price
Elasticity vs Slope - ANS Elasticity vaires along a linear demand curve while slope remains
constant
Elements of Conjoint Analysis - ANS 1) Pair Wise Rankings
2) Infer Value from Rankings
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
