Question 1

If actual experience supports two competing theories, then both theories are proven to be true.

Accepted Answer

A) True 
 B)False  False

Question 2

Economic models are only useful in analyzing government policy.

Accepted Answer

A) True, individuals are irrational and therefore economic models are useless. 
B) False, economic models can be used to predict individual and firm behavior. 
C) True, economists only model those questions for which they are hired. 
D) False, economic models are not even useful in analyzing government policy. 
A) True, individuals are irrational and therefore economic models are useless. 
B) False, economic models can be used to predict individual and firm behavior. 
C) True, economists only model those questions for which they are hired. 
D) False, economic models are not even useful in analyzing government policy. B

Question 3

Managers have to understand the decision making of others.

Accepted Answer

A) True 
 B)False  True

Question 4

What is the purpose of having a strategy?

Accepted Answer

A strategy defines f

Question 5

A firm's managers are constrained by

Accepted Answer

A) consumers. 
B) workers. 
C) government. 
D) All of the above. 
A) consumers. 
B) workers. 
C) government. 
D) All of the above.

Question 6

If a model's predictions are correct, then

Accepted Answer

A) its assumptions must have been correct. 
B) it is proven to be correct. 
C) Both A and B above. 
D) None of the above. 
A) its assumptions must have been correct. 
B) it is proven to be correct. 
C) Both A and B above. 
D) None of the above.

Question 7

Give an example of a tradeoff a pizza restaurant might face.

Accepted Answer

Whether to

Question 8

Explain what the statement "We can't have everything we want" means.

Accepted Answer

Because resources are scarce,

Question 9

Raising the price of a good by one dollar

Accepted Answer

A) increases profits. 
B) decreases profits. 
C) leaves profits unchanged. 
D) leads to an indeterminant change in profits. 
A) increases profits. 
B) decreases profits. 
C) leaves profits unchanged. 
D) leads to an indeterminant change in profits.

Question 10

Managerial economics

Accepted Answer

A) describes how pay for managers is set. 
B) ensures managers always make good decisions. 
C) helps managers make decisions in the face of scarcity. 
D) explains which products consumers will buy. 
A) describes how pay for managers is set. 
B) ensures managers always make good decisions. 
C) helps managers make decisions in the face of scarcity. 
D) explains which products consumers will buy.

Question 11

Which of the following would NOT be considered part of a firm's strategy?

Accepted Answer

A) production levels 
B) which inputs to use 
C) sales strategy 
D) None of the above-all are part of a firm's strategy. 
A) production levels 
B) which inputs to use 
C) sales strategy 
D) None of the above-all are part of a firm's strategy.

Question 12

If an important assumption is omitted from an economic model,

Accepted Answer

A) the model's predictions will only be accurate 50% of the time. 
B) the model's predictions may be inaccurate. 
C) the model will not predict anything. 
D) the model is not simple enough. 
A) the model's predictions will only be accurate 50% of the time. 
B) the model's predictions may be inaccurate. 
C) the model will not predict anything. 
D) the model is not simple enough.

Question 13

A market

Accepted Answer

A) always involves the personal exchange of goods for money. 
B) allows interactions between consumers and firms. 
C) always takes place at a physical location. 
D) has no influence on prices. 
A) always involves the personal exchange of goods for money. 
B) allows interactions between consumers and firms. 
C) always takes place at a physical location. 
D) has no influence on prices.

Question 14

Profit is

Accepted Answer

A) maximized when the marketing department coordinates with the production department. 
B) maximized when revenue is maximized. 
C) used to beat a company's rivals. 
D) the difference between a firm's revenues and its costs. 
A) maximized when the marketing department coordinates with the production department. 
B) maximized when revenue is maximized. 
C) used to beat a company's rivals. 
D) the difference between a firm's revenues and its costs.

Question 15

What is profit?

Accepted Answer

Profit is the differ

Question 16

Explain why economists might disagree on the content of a model.

Accepted Answer

Economists might hav

Question 17

Economic models are most often tested

Accepted Answer

A) using computer simulations. 
B) using data from the distant past. 
C) using data from the real world. 
D) using logic alone. 
A) using computer simulations. 
B) using data from the distant past. 
C) using data from the real world. 
D) using logic alone.

Question 18

Microeconomic models are used to

Accepted Answer

A) make predictions. 
B) explain real-life phenomena. 
C) evaluate production alternatives. 
D) All of the above. 
A) make predictions. 
B) explain real-life phenomena. 
C) evaluate production alternatives. 
D) All of the above.

Question 19

Behavioral economics is the study of why people

Accepted Answer

A) choose not to optimize. 
B) optimize. 
C) sometimes don't optimize. 
D) behave badly when buying and selling. 
A) choose not to optimize. 
B) optimize. 
C) sometimes don't optimize. 
D) behave badly when buying and selling.

Question 20

If a theory's predictions are incorrect,

Accepted Answer

A) then economists always reject it. 
B) then the data used was clearly faulty. 
C) then economists will likely reduce their confidence in the theory. 
D) then the model must be too simple. 
A) then economists always reject it. 
B) then the data used was clearly faulty. 
C) then economists will likely reduce their confidence in the theory. 
D) then the model must be too simple.

If actual experience supports two competing theories, then both theories are proven to be true.

Economic models are only useful in analyzing government policy.

Managers have to understand the decision making of others.

What is the purpose of having a strategy?

A firm's managers are constrained by

If a model's predictions are correct, then

Give an example of a tradeoff a pizza restaurant might face.

Explain what the statement "We can't have everything we want" means.

Raising the price of a good by one dollar

Managerial economics

Which of the following would NOT be considered part of a firm's strategy?

If an important assumption is omitted from an economic model,

A market

Profit is

What is profit?

Explain why economists might disagree on the content of a model.

Economic models are most often tested

Microeconomic models are used to

Behavioral economics is the study of why people

If a theory's predictions are incorrect,

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 1: Introduction

If actual experience supports two competing theories, then both theories are proven to be true.

Economic models are only useful in analyzing government policy.

Managers have to understand the decision making of others.

What is the purpose of having a strategy?

A firm's managers are constrained by

If a model's predictions are correct, then

Give an example of a tradeoff a pizza restaurant might face.

Explain what the statement "We can't have everything we want" means.

Raising the price of a good by one dollar

Managerial economics

Which of the following would NOT be considered part of a firm's strategy?

If an important assumption is omitted from an economic model,

A market

Profit is

What is profit?

Explain why economists might disagree on the content of a model.

Economic models are most often tested

Microeconomic models are used to

Behavioral economics is the study of why people

If a theory's predictions are incorrect,

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters