Managerial Economics 3203 Exam 1

question

Economics can be defined as

answer

the study of choices made in the face of scarcity

question

Most economic models have at their core a decision maker pursuing their self interest. As such, there is no place for charity or the broader good in economic models.

answer

False. (Self interest can include the well being of others)

question

Which of the following is an implicit cost of going to college.

answer

Foregone wages

question

Which of the following is not true?

answer

Accounting profit is generally lower than economic profit.

question

If marginal cost exceed marginal benefits, it is profitable to:

answer

Decrease the control variable

question

XYZ incorporated earned an account profit of $1 million. They have $2 million in debt financed at a 5% interest rate. They also used stock raising $8 million. Stock in similar risk companies is expected to generate a 12% return. XYZ does provide a good use of funds because their:

answer

Economic value added is positive.

question

A higher tax on beer will cause the price of beer to increase. As a result, the demand for beer will fall which will bring the price of beer lower again.

answer

False

question

If the price is below the market equilibrium then there will be

answer

A shortage

question

The law of supply states that, holding all else constant, as the price of a good falls:

answer

Quantity supplied falls

question

Which of the following are least like to be compliments

answer

Cars and trucks

question

Equilibrium price?

answer

Set equations equal to each other.

question

If the price of beef increases, what would you expect to happen to the equilibrium price and quantity in the market for chicken

answer

Price and quantity will increase

question

If a new battery technology is invented making rechargeable batteries for electronics much cheaper, what would you expect to happen to the equilibrium price and quantity in the cell phone market.

answer

Price will decrease but quantity will increase

question

Suppose supply decreases and demand increases. What effect will this have on the quantity?

answer

It may rise or fall

question

Producer surplus is measured as the area

answer

Below the demand curve and about the market price

question

The minimum legal price that can be charged in a market is

answer

A price floor

question

All of the following are examples of market failures except:

answer

Vigorous price competition eroding firm profits

question

Free market advocate and Nobel laureate Milton Friedman felt that society was best served if companies only forced on maximizing profits regardless of the methods employed or the environment they operated in.

answer

False

question

If an own price elasticity is -1.2 we know the demand is

answer

Inelastic

question

As we move down along a linear demand curve, from higher prices to lower prices, the price elasticity of demand becomes more:

answer

Inelastic

question

The demand curve for a good is verticals when it is:

answer

A perfectly Inelastic good

question

Assume that the price elasticity of demand is -2 for a certain firms product. If the firm reduces the price, the firms managers can expect totally revenue to:

answer

Increase

question

We would expect the demand for jeans to be:

answer

More elastic than the demand for clothing

question

An income elasticity less than zero tells us that the good is

answer

Inferior

question

The shirt run is defined as the time frame:

answer

In which there are fixed factors of production

question

Which statement is incorrect?

answer

Fixed costs could be positive when sunk costs are zero

question

The point where diminishing marginal returns begins to impact production is best characterized by the point where the:

answer

Marginal product curve begins to be negatively sloped

question

The law of diminishing returns says that as you continue to expand your business by adding more of all inputs, your productivity will eventually decline.

answer

True.

question

Which of the following is not an aspect of perfect competition?

answer

All of these are aspects of perfect competition

question

Which of the following is true under perfect competition?

answer

P=MR

question

I'm a perfectly competitive industry with identical firms, long-run equilibrium is characterized by:

answer

P=AC
MR=MC
P=MC

1 of 31

question

Economics can be defined as

answer

the study of choices made in the face of scarcity

question

Most economic models have at their core a decision maker pursuing their self interest. As such, there is no place for charity or the broader good in economic models.

answer

False. (Self interest can include the well being of others)

question

Which of the following is an implicit cost of going to college.

answer

Foregone wages

question

Which of the following is not true?

answer

Accounting profit is generally lower than economic profit.

question

If marginal cost exceed marginal benefits, it is profitable to:

answer

Decrease the control variable

question

answer

Economic value added is positive.

question

A higher tax on beer will cause the price of beer to increase. As a result, the demand for beer will fall which will bring the price of beer lower again.

answer

False

question

If the price is below the market equilibrium then there will be

answer

A shortage

question

The law of supply states that, holding all else constant, as the price of a good falls:

answer

Quantity supplied falls

question

Which of the following are least like to be compliments

answer

Cars and trucks

question

Equilibrium price?

answer

Set equations equal to each other.

question

If the price of beef increases, what would you expect to happen to the equilibrium price and quantity in the market for chicken

answer

Price and quantity will increase

question

If a new battery technology is invented making rechargeable batteries for electronics much cheaper, what would you expect to happen to the equilibrium price and quantity in the cell phone market.

answer

Price will decrease but quantity will increase

question

Suppose supply decreases and demand increases. What effect will this have on the quantity?

answer

It may rise or fall

question

Producer surplus is measured as the area

answer

Below the demand curve and about the market price

question

The minimum legal price that can be charged in a market is

answer

A price floor

question

All of the following are examples of market failures except:

answer

Vigorous price competition eroding firm profits

question

answer

False

question

If an own price elasticity is -1.2 we know the demand is

answer

Inelastic

question

As we move down along a linear demand curve, from higher prices to lower prices, the price elasticity of demand becomes more:

answer

Inelastic

question

The demand curve for a good is verticals when it is:

answer

A perfectly Inelastic good

question

Assume that the price elasticity of demand is -2 for a certain firms product. If the firm reduces the price, the firms managers can expect totally revenue to:

answer

Increase

question

We would expect the demand for jeans to be:

answer

More elastic than the demand for clothing

question

An income elasticity less than zero tells us that the good is

answer

Inferior

question

The shirt run is defined as the time frame:

answer

In which there are fixed factors of production

question

Which statement is incorrect?

answer

Fixed costs could be positive when sunk costs are zero

question

The point where diminishing marginal returns begins to impact production is best characterized by the point where the:

answer

Marginal product curve begins to be negatively sloped

question

The law of diminishing returns says that as you continue to expand your business by adding more of all inputs, your productivity will eventually decline.

answer

True.

question

Which of the following is not an aspect of perfect competition?

answer

All of these are aspects of perfect competition

question

Which of the following is true under perfect competition?

answer

P=MR

question

I'm a perfectly competitive industry with identical firms, long-run equilibrium is characterized by:

answer

P=AC
MR=MC
P=MC

Continue to order Get a quote

Managerial Economics 3203 Exam 1

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee