Question 1

A firm's total profit is generally at a maximum when total revenue is at a maximum.

Accepted Answer

A) True 
 B)False

Question 2

Economic relationship can be expressed as

Accepted Answer

A)  equations. 
B)  graphs. 
C)  tables. 
D)  all of the above. 
A)  equations. 
B)  graphs. 
C)  tables. 
D)  all of the above.

Question 3

A firm's total profit is generally at a maximum when the firm's average revenue curve is above its average cost curve and the vertical distance that separates the two curves is at a maximum.

Accepted Answer

A) True 
 B)False

Question 4

Constrained optimization refers to the fact that

Accepted Answer

A)  the firm need to impose restrictions on itself for sustainable growth. 
B)  the resources the firm has are limited. 
C)  the objectives the firm has are limited. 
D)  the firm has only limited demand and should be limit production. 
A)  the firm need to impose restrictions on itself for sustainable growth. 
B)  the resources the firm has are limited. 
C)  the objectives the firm has are limited. 
D)  the firm has only limited demand and should be limit production.

Question 5

If a firm's total cost curve is defined by a straight line that has a positive intercept that is equal to fixed costs, then

Accepted Answer

A)  average cost is equal to marginal cost for all levels of output. 
B)  average cost is negatively sloped and marginal cost is horizontal. 
C)  both average cost and marginal cost are negatively sloped, but they are not equal to each other. 
D)  both average cost and marginal cost are horizontal, and average cost is below marginal cost at all levels of output. 
A)  average cost is equal to marginal cost for all levels of output. 
B)  average cost is negatively sloped and marginal cost is horizontal. 
C)  both average cost and marginal cost are negatively sloped, but they are not equal to each other. 
D)  both average cost and marginal cost are horizontal, and average cost is below marginal cost at all levels of output.

Question 6

Use the information about marginal revenue (MR) that is presented in the table below to determine the total revenue when output is equal to 6.
$$\begin{array} { l r r r r r r r r r } 
\text { Output } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 \
M R & 50 & 45 & 40 & 35 & 30 & 25 & 20 & 15 & 10
\end{array}$$

Accepted Answer

A)  25 
B)  30 
C)  150 
D)  225 
A)  25 
B)  30 
C)  150 
D)  225

Question 7

If a straight line that is tangent to total cost passes through the origin of a graph, then the slope of the line is equal to average cost at the point of tangency.

Accepted Answer

A) True 
 B)False

Question 8

Use the demand schedule that is presented in the table below to determine the optimal rate of production and price when the firm has a constant marginal cost of $16 per unit.
 $$\begin{array} { l r r r r r r r r r r } 
\text { Quantity } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
\text { Price } & 80 & 60 & 48 & 40 & 34 & 29 & 25 & 20 & 15 & 10
\end{array}$$

Accepted Answer

The answer of Use the demand schedule that is presented...

Question 9

If a firm's total cost curve is an upward-sloping straight line, then its average total cost curve will slope upward.

Accepted Answer

A) True 
 B)False

Question 10

If average cost is increasing with an additional unit of output, this means that

Accepted Answer

A)  marginal cost is increasing. 
B)  marginal cost is decreasing. 
C)  marginal cost is flat. 
D)  total cost is decreasing. 
A)  marginal cost is increasing. 
B)  marginal cost is decreasing. 
C)  marginal cost is flat. 
D)  total cost is decreasing.

Question 11

Given the total cost schedule below, at what level of output is the average cost the lowest?
$$\begin{array} { | l | l | l | l | l | l | l | l | } 
\hline \text { Output } & 0 & 1 & 2 & 3 & 4 & 5 & 6 \
\hline \text { Total Cost } & 50 & 70 & 60 & 70 & 80 & 110 & 140 \
\hline
\end{array}$$

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
A)  2 
B)  3 
C)  4 
D)  5

Question 12

Use the information in the table below to determine the marginal cost of producing the sixth unit of output.
$$\begin{array} { l r r r r r r r r r } 
\text { Output } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \
\text { Cost } & 10 & 11 & 13 & 16 & 20 & 25 & 31 & 38 & 48
\end{array}$$

Accepted Answer

A)  6 
B)  31 
C)  6/31 
D)  31/6 
A)  6 
B)  31 
C)  6/31 
D)  31/6

Question 13

If a firm is producing a level of output where marginal cost is equal to marginal revenue, then

Accepted Answer

A)  profit is at a maximum if marginal cost has a negative slope and marginal revenue is horizontal. 
B)  profit is at a minimum if marginal cost has a negative slope and marginal revenue is horizontal. 
C)  profit is at a maximum if average revenue is greater than average cost. 
D)  profit is at a minimum if average revenue is greater than average cost. 
A)  profit is at a maximum if marginal cost has a negative slope and marginal revenue is horizontal. 
B)  profit is at a minimum if marginal cost has a negative slope and marginal revenue is horizontal. 
C)  profit is at a maximum if average revenue is greater than average cost. 
D)  profit is at a minimum if average revenue is greater than average cost.

Question 14

Assume that the total cost of production is estimated to be represented by the following function: TC = 75.00 + 10Q. What is the marginal cost of production when 200 units of output are produced?

Accepted Answer

The answer of Assume that the total cost of production...

Question 15

If a marginal value is greater than its corresponding average value, the marginal value must be decreasing.

Accepted Answer

A) True 
 B)False

Question 16

What does benchmarking refer to?

Accepted Answer

A)  Keeping high level of production quality in factories abroad. 
B)  Making sure that the quality of products or processes is as good or better than in previous year. 
C)  Setting a level of quality that is acceptable and making sure it is met. 
D)  Finding out how other firms are doing something better, then copying and improving. 
A)  Keeping high level of production quality in factories abroad. 
B)  Making sure that the quality of products or processes is as good or better than in previous year. 
C)  Setting a level of quality that is acceptable and making sure it is met. 
D)  Finding out how other firms are doing something better, then copying and improving.

Question 17

Use the information about marginal revenue (MR) that is presented in the table below to determine the level of output that maximizes total revenue.
$$\begin{array} { l r r r r r r r r r } 
\text { Output } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 \
M R & 50 & 40 & 30 & 20 & 10 & 0 & - 10 & - 20 & - 30
\end{array}$$

Accepted Answer

A)  1 
B)  6 
C)  9 
D)  There is not enough information to determine the answer. 
A)  1 
B)  6 
C)  9 
D)  There is not enough information to determine the answer.

Question 18

Family-run firms tend to be more effective than non-family-run firms.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions below:  
-Refer to the total revenue graph. The level of output where marginal revenue is equal to zero is

Accepted Answer

A)  0 
B)  2 
C)  5 
D)  10 
A)  0 
B)  2 
C)  5 
D)  10

Question 20

Use the following to answer questions below :  
-Refer to the total cost graph. What is average variable cost equal to when Q = 2?

Accepted Answer

A)  15 
B)  20 
C)  30 
D)  40 
A)  15 
B)  20 
C)  30 
D)  40

A firm's total profit is generally at a maximum when total revenue is at a maximum.

Economic relationship can be expressed as

A firm's total profit is generally at a maximum when the firm's average revenue curve is above its average cost curve and the vertical distance that separates the two curves is at a maximum.

Constrained optimization refers to the fact that

If a firm's total cost curve is defined by a straight line that has a positive intercept that is equal to fixed costs, then

Use the information about marginal revenue (MR) that is presented in the table below to determine the total revenue when output is equal to 6. Output 1 2 3 4 5 6 7 8 9 MR 50 45 40 35 30 25 20 15 10

If a straight line that is tangent to total cost passes through the origin of a graph, then the slope of the line is equal to average cost at the point of tangency.

Use the demand schedule that is presented in the table below to determine the optimal rate of production and price when the firm has a constant marginal cost of $16 per unit. Quantity 1 2 3 4 5 6 7 8 9 10 Price 80 60 48 40 34 29 25 20 15 10

If a firm's total cost curve is an upward-sloping straight line, then its average total cost curve will slope upward.

If average cost is increasing with an additional unit of output, this means that

Given the total cost schedule below, at what level of output is the average cost the lowest? Output 0 1 2 3 4 5 6 Total Cost 50 70 60 70 80 110 140

Use the information in the table below to determine the marginal cost of producing the sixth unit of output. Output 0 1 2 3 4 5 6 7 8 Cost 10 11 13 16 20 25 31 38 48

If a firm is producing a level of output where marginal cost is equal to marginal revenue, then

Assume that the total cost of production is estimated to be represented by the following function: TC = 75.00 + 10Q. What is the marginal cost of production when 200 units of output are produced?

If a marginal value is greater than its corresponding average value, the marginal value must be decreasing.

What does benchmarking refer to?

Use the information about marginal revenue (MR) that is presented in the table below to determine the level of output that maximizes total revenue. Output 1 2 3 4 5 6 7 8 9 MR 50 40 30 20 10 0 -10 -20 -30

Family-run firms tend to be more effective than non-family-run firms.

Use the following to answer questions below: -Refer to the total revenue graph. The level of output where marginal revenue is equal to zero is

Use the following to answer questions below : -Refer to the total cost graph. What is average variable cost equal to when Q = 2?

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Demand Theory

Demand Estimation

Demand Forecasting

Production Theory and Estimation

Cost Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

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Exam 3: Optimization Techniques and New Management Tools

A firm's total profit is generally at a maximum when total revenue is at a maximum.

Economic relationship can be expressed as

A firm's total profit is generally at a maximum when the firm's average revenue curve is above its average cost curve and the vertical distance that separates the two curves is at a maximum.

Constrained optimization refers to the fact that

If a firm's total cost curve is defined by a straight line that has a positive intercept that is equal to fixed costs, then

Use the information about marginal revenue (MR) that is presented in the table below to determine the total revenue when output is equal to 6. Output 1 2 3 4 5 6 7 8 9 MR 50 45 40 35 30 25 20 15 10

If a straight line that is tangent to total cost passes through the origin of a graph, then the slope of the line is equal to average cost at the point of tangency.

Use the demand schedule that is presented in the table below to determine the optimal rate of production and price when the firm has a constant marginal cost of $16 per unit. Quantity 1 2 3 4 5 6 7 8 9 10 Price 80 60 48 40 34 29 25 20 15 10

If a firm's total cost curve is an upward-sloping straight line, then its average total cost curve will slope upward.

If average cost is increasing with an additional unit of output, this means that

Given the total cost schedule below, at what level of output is the average cost the lowest? Output 0 1 2 3 4 5 6 Total Cost 50 70 60 70 80 110 140

Use the information in the table below to determine the marginal cost of producing the sixth unit of output. Output 0 1 2 3 4 5 6 7 8 Cost 10 11 13 16 20 25 31 38 48

If a firm is producing a level of output where marginal cost is equal to marginal revenue, then

Assume that the total cost of production is estimated to be represented by the following function: TC = 75.00 + 10Q. What is the marginal cost of production when 200 units of output are produced?

If a marginal value is greater than its corresponding average value, the marginal value must be decreasing.

What does benchmarking refer to?

Use the information about marginal revenue (MR) that is presented in the table below to determine the level of output that maximizes total revenue. Output 1 2 3 4 5 6 7 8 9 MR 50 40 30 20 10 0 -10 -20 -30

Family-run firms tend to be more effective than non-family-run firms.

Use the following to answer questions below: -Refer to the total revenue graph. The level of output where marginal revenue is equal to zero is

Use the following to answer questions below : -Refer to the total cost graph. What is average variable cost equal to when Q = 2?

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Demand Theory

Demand Estimation

Demand Forecasting

Production Theory and Estimation

Cost Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

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