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MULTIPLE CHOICE
1. The first law of demand states that
a. the quantity demanded increases as price falls
b. the quantity demanded decreases as price falls
c. the quantity demanded increases as price increases
d. none of the above
2. Its lunch time, you are hungry and would like to have some pizza. By the law of diminishing marginal value,
a. you would pay more for your first slice of pizza than your second
b. you would pay more for your second slice of pizza than your first
c. you would pay an equal amount of money for both the slices since they are identical
d. none of the above
3. A demand curves describes
a. the amount of units a consumer will purchase at a given price
b. the amount of units a producer will sell at a given price
c. both the amount of units that a consumer will buy and a producer will produce at a given price
d. the amount of units supplied given a change in prices
4. What criteria do consumers apply when deciding whether or not to consume
a. The consumer would consume only if the price is lower than his highest willingness to pay
b. The consumer would only consume if his surplus is greater than zero
c. The consumer would only consume if the price is higher than his highest willingness to pay
d. Both A&B
5. If MR<MC, then the firm should
a. increase production
b. decrease production
c. keep the prices constant
d. keep the production level constant
6. In general, the smaller the price elasticity:
a. the smaller the responsiveness of price to changes in quantity.
b. the smaller the responsiveness of quantity to changes in price.
c. the larger the responsiveness of price to changes in quantity.
d. the larger the responsiveness of quantity to changes in price.
7. The price elasticity of demand tells us about
a. The sensitivity of price to quantity
b. The sensitivity of quantity to price
MBA 531 ASSIGNMENT THREE CHAPTER SIX SIMPLE
PRICING
