02 Jan the quantity demanded

Module 1 quiz

Question 1

The example of Enron shows that:

large incentives are the keys to getting people moving in a corporation.

business success is possible in a regulatory environment.

selection of people is the key to organizational success or failure.

organizational structure is extremely important in business success.

Question 2

If the technology, the nature of competition, or the regulatory environment changes in an industry, then:

organizations are created by random events, just like markets.

a good organizational architecture is always able to cope with changes.

the appropriate organizational architecture will change too.

organizational architecture is able to restore the former market environment.

Question 3

Economics provides a theory to explain:

how managers can cheat and get away with it.

how a successful business can be started.

how to compete in the market.

how people make choices.

Question 4

Benchmarking means:

copying from the best so as to become better.

blind copying.

looking at yourself and telling yourself you are the greatest.

looking at yourself and telling others what to do.

Question 5

A risk-averse agent:

only cares about expected payoff.

always prefers a certain payoff to a risky one.

cares about expected payoff, as well as the variability of a payoff.

only cares about the variability of a payoff.

Question 6

If employees conform to the economist’s view of behavior, managers will be most effective if they can:

influence the costs and benefits of employee actions.

fire bad employees.

improve employee satisfaction with the job.

communicate goals and objectives effectively to their employees.

Question 7

Marginal utility is the:

total amount spent to purchase one additional unit.

total happiness obtained from a consumption bundle.

additional utility obtained by consuming one additional unit.

additional utility obtained by lowering the price of a good.

Question 8

Assume the market for ceiling fans is perfectly competitive and currently in equilibrium. If the demand increases while the supply decreases, then:

Correct Answer

we can be certain the equilibrium price will increase.

both price and quantity will decrease.

we can be certain the equilibrium quantity will increase.

both price and quantity will increase.

Question 9

Assume the government introduces a $0.50 per gallon tax on gasoline. Which of the following is true?

The quantity of gasoline sold is likely to increase.

The quantity of subway and bus tickets sold is likely to increase.

The quantity supplied by producers will decrease.

The quantity of cars sold is likely to increase.

Question 10

According to Ronald Coase, for a free-market economy to work efficiently, there needs to be:

a well-developed tax code.

an allocation of private property rights with low transactions costs.

an allocation of private property rights with high transactions costs.

a low cost of malpractice insurance.

Question 11

Based on the following diagram if there was a $3.00 price floor:

there would be a surplus of 30.

the quantity demanded would be 65.

there would be a shortage of 30.

the quantity demanded would be 30.

Question 12

Assume D1 represents the current demand curve for skis. Which of the following would be likely to cause D1 to shift to D2?

A decrease in the price of skis.

An increase in the price of skis.

An increase in the price of snowboards.

An increase in the price of ski boots and clothing.