Question 1

The optimal solution to a problem refers to the best solution.

Accepted Answer

A) True 
 B)False

Question 2

A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity.

Accepted Answer

A) True 
 B)False

Question 3

A firm's demand function is Q = 16 - P and its total cost function is defined as TC = 3 + Q + 0.25Q2. Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum?

Accepted Answer

Question 4

Marginal cost is plotted (as an approximation) halfway between successive units of output.

Accepted Answer

A) True 
 B)False

Question 5

A firm's demand function is defined as Q = 20 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

Accepted Answer

The answer of A firm's demand function is defined as...

Question 6

What did Mobil Corporation (now Exxon-Mobil) examined when trying to reduce the time spent at the gas pump at its 8,000 service stations?

Accepted Answer

A)  Plane refueling process. 
B)  Team Penske auto-racing pit stops. 
C)  Military drills. 
D)  Their competitors. 
A)  Plane refueling process. 
B)  Team Penske auto-racing pit stops. 
C)  Military drills. 
D)  Their competitors.

Question 7

If a firm's average cost is equal to its average revenue, then

Accepted Answer

A)  profit is at a maximum. 
B)  profit is at a minimum. 
C)  profit is equal to zero. 
D)  the firm is in equilibrium. 
A)  profit is at a maximum. 
B)  profit is at a minimum. 
C)  profit is equal to zero. 
D)  the firm is in equilibrium.

Question 8

Use the following to answer questions below:  
-Refer to the total revenue graph. If marginal cost is equal to 10 at all levels of output, then which of the following output levels will yield the highest level of profit?

Accepted Answer

A)  2 
B)  4 
C)  5 
D)  7 
A)  2 
B)  4 
C)  5 
D)  7

Question 9

Average cost equals

Accepted Answer

A)  total cost minus fixed cost. 
B)  marginal cost plus variable cost. 
C)  total cost divided by number labor units used in production. 
D)  total cost divided by the output. 
A)  total cost minus fixed cost. 
B)  marginal cost plus variable cost. 
C)  total cost divided by number labor units used in production. 
D)  total cost divided by the output.

Question 10

The marginal cost when output = 10 is equal to

Accepted Answer

A)  the slope of a line drawn tangent to the total cost curve where output = 10. 
B)  the total cost of 10 units of output divided by 10. 
C)  the average cost of 10 units of output. 
D)  the slope of a ray drawn from the origin to the point on the total cost curve where output = 10. 
A)  the slope of a line drawn tangent to the total cost curve where output = 10. 
B)  the total cost of 10 units of output divided by 10. 
C)  the average cost of 10 units of output. 
D)  the slope of a ray drawn from the origin to the point on the total cost curve where output = 10.

Question 11

If marginal cost (MC) is $10 and average variable cost (AVC) is $12, then AVC

Accepted Answer

A)  is at a minimum. 
B)  is at a maximum. 
C)  is increasing. 
D)  is decreasing. 
A)  is at a minimum. 
B)  is at a maximum. 
C)  is increasing. 
D)  is decreasing.

Question 12

If marginal cost (MC) is $12 and average variable cost (AVC) is $10, then AVC

Accepted Answer

A)  is at a minimum. 
B)  is at a maximum. 
C)  is increasing. 
D)  is decreasing. 
A)  is at a minimum. 
B)  is at a maximum. 
C)  is increasing. 
D)  is decreasing.

Question 13

Use the information provided in the first two columns to fill in third and fourth columns of the table? What is the fixed cost?
 $$\begin{array} { | l | l | l | l | } 
\hline \mathrm { Q } & \text { TC } & \mathrm { AC } & \mathrm { MC } \
\hline 0 & 75 & - & - \
\hline 1 & 100 & & \
\hline 2 & 120 & & \
\hline 3 & 135 & & \
\hline
\end{array}$$

Accepted Answer

The answer of Use the information provided in the first...

Question 14

A firm's demand function is defined as Q = 14 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

Accepted Answer

The answer of A firm's demand function is defined as...

Question 15

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

Accepted Answer

A)  20 
B)  4 
C)  5 
D)  2.5 
A)  20 
B)  4 
C)  5 
D)  2.5

Question 16

Marginal revenue reaches a maximum at the same level of output that total revenue reaches a maximum.

Accepted Answer

A) True 
 B)False

Question 17

Reengineering involves

Accepted Answer

A)  analyzing big data set to improve old firm's processes. 
B)  investing into individual and collective learning of the firm 
C)  slight improvement of the current firm's processes limiting any associated risk. 
D)  radical redesign of the firm's processes to achieve major gains in efficiency. 
A)  analyzing big data set to improve old firm's processes. 
B)  investing into individual and collective learning of the firm 
C)  slight improvement of the current firm's processes limiting any associated risk. 
D)  radical redesign of the firm's processes to achieve major gains in efficiency.

Question 18

If an average curve has a negative slope, then the corresponding

Accepted Answer

A)  marginal curve is below the average curve. 
B)  total curve has a negative slope. 
C)  marginal curve is above the average curve. 
D)  total curve has a positive slope. 
A)  marginal curve is below the average curve. 
B)  total curve has a negative slope. 
C)  marginal curve is above the average curve. 
D)  total curve has a positive slope.

Question 19

Use the following to answer questions below :  
-Refer to the total cost graph. Which of the following levels of output is closest to the inflection point?

Accepted Answer

A)  2 
B)  5 
C)  10 
D)  11 
A)  2 
B)  5 
C)  10 
D)  11

Question 20

The optimal amount of pollution to society is where

Accepted Answer

A)  the total cost of pollution is equal to zero. 
B)  the total benefit of pollution is equal to zero. 
C)  the marginal benefit of pollution equals the marginal cost of pollution. 
D)  there is no pollution at all. 
A)  the total cost of pollution is equal to zero. 
B)  the total benefit of pollution is equal to zero. 
C)  the marginal benefit of pollution equals the marginal cost of pollution. 
D)  there is no pollution at all.

The optimal solution to a problem refers to the best solution.

A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity.

A firm's demand function is Q = 16 - P and its total cost function is defined as TC = 3 + Q + 0.25Q². Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum?

Marginal cost is plotted (as an approximation) halfway between successive units of output.

A firm's demand function is defined as Q = 20 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

What did Mobil Corporation (now Exxon-Mobil) examined when trying to reduce the time spent at the gas pump at its 8,000 service stations?

If a firm's average cost is equal to its average revenue, then

Use the following to answer questions below: -Refer to the total revenue graph. If marginal cost is equal to 10 at all levels of output, then which of the following output levels will yield the highest level of profit?

Average cost equals

The marginal cost when output = 10 is equal to

If marginal cost (MC) is $10 and average variable cost (AVC) is $12, then AVC

If marginal cost (MC) is $12 and average variable cost (AVC) is $10, then AVC

Use the information provided in the first two columns to fill in third and fourth columns of the table? What is the fixed cost? TC 0 75 - - 1 100 2 120 3 135

A firm's demand function is defined as Q = 14 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

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

Marginal revenue reaches a maximum at the same level of output that total revenue reaches a maximum.

Reengineering involves

If an average curve has a negative slope, then the corresponding

Use the following to answer questions below : -Refer to the total cost graph. Which of the following levels of output is closest to the inflection point?

The optimal amount of pollution to society is where

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

Filters

Exam 3: Optimization Techniques and New Management Tools

The optimal solution to a problem refers to the best solution.

A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity.

A firm's demand function is Q = 16 - P and its total cost function is defined as TC = 3 + Q + 0.25Q2. Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum?

Marginal cost is plotted (as an approximation) halfway between successive units of output.

A firm's demand function is defined as Q = 20 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

What did Mobil Corporation (now Exxon-Mobil) examined when trying to reduce the time spent at the gas pump at its 8,000 service stations?

If a firm's average cost is equal to its average revenue, then

Use the following to answer questions below: -Refer to the total revenue graph. If marginal cost is equal to 10 at all levels of output, then which of the following output levels will yield the highest level of profit?

Average cost equals

The marginal cost when output = 10 is equal to

If marginal cost (MC) is $10 and average variable cost (AVC) is $12, then AVC

If marginal cost (MC) is $12 and average variable cost (AVC) is $10, then AVC

Use the information provided in the first two columns to fill in third and fourth columns of the table? What is the fixed cost? TC 0 75 - - 1 100 2 120 3 135

A firm's demand function is defined as Q = 14 - 2P. Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. What is marginal revenue equal to between P = 3 and P = 4?

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

Marginal revenue reaches a maximum at the same level of output that total revenue reaches a maximum.

Reengineering involves

If an average curve has a negative slope, then the corresponding

Use the following to answer questions below : -Refer to the total cost graph. Which of the following levels of output is closest to the inflection point?

The optimal amount of pollution to society is where

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

Filters

A firm's demand function is Q = 16 - P and its total cost function is defined as TC = 3 + Q + 0.25Q². Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum?