Practice Mid-term Exam - DB - PRACTICE MID-TERM QUESTIONS...

PRACTICE MID-TERM QUESTIONS
MANEC 387
MULTIPLE CHOICE
1. The law of demand states that, holding all else constant:
a) as price falls, demand will fall also.
b) as price rises, demand will also rise.
c) price has no effect on quantity demanded.
d) as price falls, quantity demanded rises.
2. In a competitive market, the market demand is Q d = 60 - 6P and the market supply is
Q
s
= 4P. A beginning price (or price ceiling) of $3 will result in
3. If A and B are complements, an increase in the price of good A would:
4. Which of the following can explain an increase in the demand for housing in
retirement communities?
5 . Suppose the demand for good X is given by Q
d
x
= 10 + α
x
P
x
+ α
y
P
y
+ α
M
M. From
the law of demand we know that α
x
will be:
a) less than zero.
b) greater than zero.
c) zero.
d) none of the above.
1

6. Suppose the demand for good X is given by Q d
x
= 10 -2 P
x
+ P
y
+ M. The price of
good X is $1, the price of good Y is $10, and income is $100. Given these prices and
income, how much of good X will be purchased?