Question 1

In the following figure,there will be an excess supply at any price:

Accepted Answer

A)  above Pb. 
B)  below Pb. 
C)  other than Pb. 
D)  below Pa. 
E)  above Pc. 
A)  above Pb. 
B)  below Pb. 
C)  other than Pb. 
D)  below Pa. 
E)  above Pc. A

Question 2

The price of computers has fallen,while the quantity purchased has remained constant.This implies that the demand for computers has:

Accepted Answer

A)  decreased, while the supply of computers has increased. 
B)  increased. 
C)  decreased, while the supply of computers has decreased. 
D)  increased, while the supply of computers has increased. 
E)  become more volatile. 
A)  decreased, while the supply of computers has increased. 
B)  increased. 
C)  decreased, while the supply of computers has decreased. 
D)  increased, while the supply of computers has increased. 
E)  become more volatile. A

Question 3

Owner-supplied labor is a cost that is usually:

Accepted Answer

A)  included in both accounting costs and economic costs. 
B)  included in accounting costs but not in economic costs. 
C)  included in economic costs but not in accounting costs. 
D)  not included in either accounting costs or economic costs. 
E)  ignored because it is impossible to place a value on it. 
A)  included in both accounting costs and economic costs. 
B)  included in accounting costs but not in economic costs. 
C)  included in economic costs but not in accounting costs. 
D)  not included in either accounting costs or economic costs. 
E)  ignored because it is impossible to place a value on it. C

Question 4

The difference between accounting and economic profit is:

Accepted Answer

A)  caused by confusion over tax laws. 
B)  the value of owned resources in their next best alternative use. 
C)  the result of superior training received by accountants. 
D)  proportionately very small for owner-managed firms. 
E)  a decreasing function of interest rates. 
A)  caused by confusion over tax laws. 
B)  the value of owned resources in their next best alternative use. 
C)  the result of superior training received by accountants. 
D)  proportionately very small for owner-managed firms. 
E)  a decreasing function of interest rates.

Question 5

J.D.Power,the big management consulting firm,extols the reliability of Dell computers; this causes the:

Accepted Answer

A)  demand for Dell computers to increase. 
B)  supply of Dell computers to increase. 
C)  quantity supplied of Dell computers to increase. 
D)  quantity supplied of Dell computers to decrease. 
E)  demand and supply of Dell computers to remain unchanged. 
A)  demand for Dell computers to increase. 
B)  supply of Dell computers to increase. 
C)  quantity supplied of Dell computers to increase. 
D)  quantity supplied of Dell computers to decrease. 
E)  demand and supply of Dell computers to remain unchanged.

Question 6

Managerial economics draws upon all of the following EXCEPT:

Accepted Answer

A)  finance. 
B)  microeconomics. 
C)  accounting. 
D)  marketing. 
E)  sociology. 
A)  finance. 
B)  microeconomics. 
C)  accounting. 
D)  marketing. 
E)  sociology.

Question 7

Which of the following would a manager NOT use to create market inefficiencies?

Accepted Answer

A)  Establishing a brand name. 
B)  Sophisticated pricing strategies. 
C)  Diversification efforts. 
D)  Output decisions. 
E)  Building market entry barriers. 
A)  Establishing a brand name. 
B)  Sophisticated pricing strategies. 
C)  Diversification efforts. 
D)  Output decisions. 
E)  Building market entry barriers.

Question 8

In the accompanying figure,the equilibrium price and quantity are:

Accepted Answer

A)  Pa and Qa. 
B)  Pb and Qb. 
C)  Pc and Qc. 
D)  Pa and Qc. 
E)  Pc and Qa. 
A)  Pa and Qa. 
B)  Pb and Qb. 
C)  Pc and Qc. 
D)  Pa and Qc. 
E)  Pc and Qa.

Question 9

What is the relationship between economic and accounting profit?

Accepted Answer

A)  Economic profit is equal to accounting profit. 
B)  Economic profit is greater than accounting profit. 
C)  Economic profit is less than accounting profit. 
D)  Economic profit may be equal to or less than accounting profit. 
E)  Economic profit may be equal to or greater than accounting profit. 
A)  Economic profit is equal to accounting profit. 
B)  Economic profit is greater than accounting profit. 
C)  Economic profit is less than accounting profit. 
D)  Economic profit may be equal to or less than accounting profit. 
E)  Economic profit may be equal to or greater than accounting profit.

Question 10

Economic profits may result from:

Accepted Answer

A)  innovation. 
B)  risk taking. 
C)  exploiting market inefficiencies. 
D)  all of the above. 
E)  a and b 
A)  innovation. 
B)  risk taking. 
C)  exploiting market inefficiencies. 
D)  all of the above. 
E)  a and b

Question 11

Which of the following would be likely to reduce the demand for residential housing?

Accepted Answer

A)  High prices for residential housing units. 
B)  High mortgage interest rates. 
C)  High prices for lumber and other construction materials. 
D)  Low unemployment rates. 
E)  Low prices for residential housing units. 
A)  High prices for residential housing units. 
B)  High mortgage interest rates. 
C)  High prices for lumber and other construction materials. 
D)  Low unemployment rates. 
E)  Low prices for residential housing units.

Question 12

In managerial economics,managers are assumed to maximize:

Accepted Answer

A)  current profits. 
B)  their take-home pay. 
C)  their employees' welfare. 
D)  the value of their firm. 
E)  social welfare. 
A)  current profits. 
B)  their take-home pay. 
C)  their employees' welfare. 
D)  the value of their firm. 
E)  social welfare.

Question 13

The economic theory of the firm assumes that the primary objective of a firm's owner or owners is to:

Accepted Answer

A)  behave in a socially conscientious manner. 
B)  maximize the firm's profit. 
C)  maximize the firm's total sales. 
D)  maximize the value of the firm. 
E)  All of these are primary objectives. 
A)  behave in a socially conscientious manner. 
B)  maximize the firm's profit. 
C)  maximize the firm's total sales. 
D)  maximize the value of the firm. 
E)  All of these are primary objectives.

Question 14

ConAgra has introduced a lean mixture of cereal and ground beef that is indistinguishable from ground beef but has about the same amount of fat as chicken.As a result,the:

Accepted Answer

A)  demand for chicken increases. 
B)  demand for ground beef decreases. 
C)  demand for chicken decreases. 
D)  demand for cereal decreases. 
E)  supply of chicken increases. 
A)  demand for chicken increases. 
B)  demand for ground beef decreases. 
C)  demand for chicken decreases. 
D)  demand for cereal decreases. 
E)  supply of chicken increases.

Question 15

The principal-agent problem refers to:

Accepted Answer

A)  the threat from foreign competition. 
B)  the need to manage inventory more effectively. 
C)  double-entry bookkeeping. 
D)  the potential costs of separation of ownership and control. 
E)  the time value of money. 
A)  the threat from foreign competition. 
B)  the need to manage inventory more effectively. 
C)  double-entry bookkeeping. 
D)  the potential costs of separation of ownership and control. 
E)  the time value of money.

Question 16

The market supply curve shows the quantity of a good or service that ,holding other possible influences constant.

Accepted Answer

A)  households would sell at various prices 
B)  households would buy at various outputs 
C)  firms would sell at various prices 
D)  firms would buy at various prices 
E)  households would buy at various prices 
A)  households would sell at various prices 
B)  households would buy at various outputs 
C)  firms would sell at various prices 
D)  firms would buy at various prices 
E)  households would buy at various prices

Question 17

California imposes strict new regulations on the blending of gasoline that increase production costs.As a result,the:

Accepted Answer

A)  demand for gasoline will increase. 
B)  demand for gasoline will decrease. 
C)  supply of gasoline will increase. 
D)  supply of gasoline will decrease. 
E)  demand for and supply of gasoline will not change. 
A)  demand for gasoline will increase. 
B)  demand for gasoline will decrease. 
C)  supply of gasoline will increase. 
D)  supply of gasoline will decrease. 
E)  demand for and supply of gasoline will not change.

Question 18

The market demand curve shows the quantity of a good or service that:

Accepted Answer

A)  households would sell at various prices. 
B)  households would buy at various outputs. 
C)  firms would sell at various prices. 
D)  firms would buy at various prices. 
E)  households would buy at various prices. 
A)  households would sell at various prices. 
B)  households would buy at various outputs. 
C)  firms would sell at various prices. 
D)  firms would buy at various prices. 
E)  households would buy at various prices.

Question 19

Managerial economics uses to help managers solve problems.

Accepted Answer

A)  formal models 
B)  prescribed behavior 
C)  quantitative methods 
D)  microeconomic theory 
E)  all of the above 
A)  formal models 
B)  prescribed behavior 
C)  quantitative methods 
D)  microeconomic theory 
E)  all of the above

Question 20

Managers may choose to pursue goals other than maximization of a firm's value.This is referred to as the problem.

Accepted Answer

A)  slacker-shirking 
B)  neuropathy 
C)  generation X 
D)  principal-agent 
E)  none of the above 
A)  slacker-shirking 
B)  neuropathy 
C)  generation X 
D)  principal-agent 
E)  none of the above

In the following figure,there will be an excess supply at any price:

The price of computers has fallen,while the quantity purchased has remained constant.This implies that the demand for computers has:

Owner-supplied labor is a cost that is usually:

The difference between accounting and economic profit is:

J.D.Power,the big management consulting firm,extols the reliability of Dell computers; this causes the:

Managerial economics draws upon all of the following EXCEPT:

Which of the following would a manager NOT use to create market inefficiencies?

In the accompanying figure,the equilibrium price and quantity are:

What is the relationship between economic and accounting profit?

Economic profits may result from:

Which of the following would be likely to reduce the demand for residential housing?

In managerial economics,managers are assumed to maximize:

The economic theory of the firm assumes that the primary objective of a firm's owner or owners is to:

ConAgra has introduced a lean mixture of cereal and ground beef that is indistinguishable from ground beef but has about the same amount of fat as chicken.As a result,the:

The principal-agent problem refers to:

The market supply curve shows the quantity of a good or service that ,holding other possible influences constant.

California imposes strict new regulations on the blending of gasoline that increase production costs.As a result,the:

The market demand curve shows the quantity of a good or service that:

Managerial economics uses to help managers solve problems.

Managers may choose to pursue goals other than maximization of a firm's value.This is referred to as the problem.

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Managerial Use of Price Discrimination

Bundling and Intrafirm Pricing

Oligopoly

Game Theory

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters

Exam 1: Introduction

In the following figure,there will be an excess supply at any price:

The price of computers has fallen,while the quantity purchased has remained constant.This implies that the demand for computers has:

Owner-supplied labor is a cost that is usually:

The difference between accounting and economic profit is:

J.D.Power,the big management consulting firm,extols the reliability of Dell computers; this causes the:

Managerial economics draws upon all of the following EXCEPT:

Which of the following would a manager NOT use to create market inefficiencies?

In the accompanying figure,the equilibrium price and quantity are:

What is the relationship between economic and accounting profit?

Economic profits may result from:

Which of the following would be likely to reduce the demand for residential housing?

In managerial economics,managers are assumed to maximize:

The economic theory of the firm assumes that the primary objective of a firm's owner or owners is to:

ConAgra has introduced a lean mixture of cereal and ground beef that is indistinguishable from ground beef but has about the same amount of fat as chicken.As a result,the:

The principal-agent problem refers to:

The market supply curve shows the quantity of a good or service that ,holding other possible influences constant.

California imposes strict new regulations on the blending of gasoline that increase production costs.As a result,the:

The market demand curve shows the quantity of a good or service that:

Managerial economics uses to help managers solve problems.

Managers may choose to pursue goals other than maximization of a firm's value.This is referred to as the problem.

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Managerial Use of Price Discrimination

Bundling and Intrafirm Pricing

Oligopoly

Game Theory

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters