Sample Midterm Questions

Sample Midterm Questions - Sample Midterm Questions Econ106...

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Sample Midterm Questions – Econ106 – Spring 2007 1) All of the following will tend to decrease rivalry (and increase profits) among a group of competitors except for: A. decreasing the number of firms in the industry. B. removing capacity constraints. C. increasing consumer switching costs. D. increasing the degree of product differentiation. 2) In a perfect world, you would want advertising to both shift your demand curve _________ and make your demand curve more ___________. A. inwards/inelastic B. inwards/elastic C. outwards/inelastic D. outwards/elastic 3) Suppose you interview 200 people to determine their response to your new product. You offer the product at a price of $2 to 100 of the people, and at a price of $1 to the other 100 people. Of the people facing the the $2 price, 10 people buy, and of the people facing the $1 price, 12 people buy. Your best guess is that the demand curve you are facing (per 100 people) is: A. Q = 14 - 2P B. Q = 14 - 0.5P C. Q = 7 - 2P D. Q = 7 - 0.5P
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Sample Midterm Questions - Sample Midterm Questions Econ106...

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