Practice Mid-term Exam - DB

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

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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 s = 4P. A beginning price (or price ceiling) of \$3 will result in a) A shortage of 18 units. b) A shortage of 30 units. c) A surplus of 30 units. d) A surplus of 12 units. e) neither a shortage nor a surplus. 3. If A and B are complements, an increase in the price of good A would: a) have no effect on the quantity demanded of B. b) lead to an increase in demand for B. c) lead to a decrease in demand for B. d) none of the above. 4. Which of the following can explain an increase in the demand for housing in retirement communities? a) a drop in real estate prices. b) an increase in the population of the elderly. c) a drop in the average age of retirees. d) mandatory government legislation. 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

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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? a) 115. b) 515. c) 1,000. d) None of the above. 7. For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to: a) become flatter. b) shift to the left. c) shift to the right. d) become parallel to the price axis. 8. Suppose market demand and supply are given by Q d = 100 - 2P and Q S = 5 + 3P.
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This note was uploaded on 12/03/2011 for the course MANEC 387 taught by Professor Crawford,l during the Fall '08 term at BYU.

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

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