MANAGERIAL ECONIMICS

AUGUST, 4 2011

GORESH SATYA SHARMA

Course Title: MANEGERIAL ECONIMICS Submitted By: GORESH SATYA SHARMA Phone: 9899404092 Email: goresh02@gmail.com

Date Submitted: August 4, 2011

Date Due: August 4, 2011

MANAGERIAL ECONIMICS

AUGUST, 4 2011

GORESH SATYA SHARMA

1. Some goods are not closely related to each other and are neither substitutes nor complements. For such goods, the cross-price elasticity of demand would be _______.
A) positive B) negative C) infinite D) zero

2. If we know that the (real) price of mountain bikes is higher now than last year, we can conclude that the demand curve shifted out over the year.
A) True B) Fals If the own price elasticity of demand is 0.5 (negative sign dropped by convention), this means that a ________ increase in price causes a ________ decrease in quantity demanded. A) 20%; 100% B) 10%; 10% C) 10%; 20% D) 5%; 1% E) None of the above

MANAGERIAL ECONIMICS

AUGUST, 4 2011

GORESH SATYA SHARMA

3. Suppose that Julia nevers looks at the menu when she enters her favorite restaurant and always orders a large latte. Her price elasticity of demand for lattes is
A) 0 B) 1 (unity) C) infinity Consumer surplus in a market is best described as A) the total benefit to consumers in the market. B) the marginal net benefit to consumers in the market. C) the total cost to consumers in the market. D) the total net benefit to consumers in the marke

4. Suppose that coffee and tea are substitutes and coffee and cream are complements. If there is a freeze in Brazil which damages Brazil's coffee crop, we should expect to see the price of coffee to _______, the price
of tea to ________, and the price of cream to _______. A) rise ; rise ; rise B) fall ; fall ; fall C) rise ; fall ; rise D) fall ; rise ; fall E) rise ; rise ; fal

MANAGERIAL ECONIMICS

AUGUST, 4 2011

GORESH SATYA SHARMA

5. Ceteris paribus, the greater the flexibility of inputs to production, the _________ the elasticity of supply of the output.
A) greater B) smaller

6. Suppose that a price reduction of 2% leads to a 4% fall in the quantity supplied of a good. Therefore, the price elasticity of supply of this good is equal to
A) 0.5 B) 2 C) 4 D) 8 E) infinity

7. Which of the following will cause an increase in the price of tortilla chips?
A) a technological advance in the production of tortilla chips B) a decrease in the price of salsa (a complement to tortilla chips) C) a decrease in the price of corn meal (an input to tortilla chip production) D) More than one of the above is correct E) None of the above is correct

8. Heidi spends all of her income on going to the movies regardless of her income level or the price of movie tickets. Thus, her income elasticity of demand for movie tickets is _________ and her price elasticity of demand for movie tickets is ________.
A) infinite ; infinite B) zero ; infinite C) unity ; zero D) zero ; zero

MANAGERIAL ECONIMICS

AUGUST, 4 2011

GORESH SATYA SHARMA

E) unity ; unit 9. Which of the following is a normative statement? A) Health care costs are rising. B) Fifteen percent of Americans do not have health insurance. C) All Americans deserve to have access to adequate healthcare. D) Many employers offer healthcare benefits. E) None of the above

10. If the demand for economics study guides is elastic, a decrease in their price will result in:
A) no change in total revenue. B) an increase in total revenue. C) a decrease in total revenue