Managerial Economics and Business Strategy Midterm Questions And Answers
6 views 0 purchase
Course
Managerial Economics and Business Strategy
Institution
Managerial Economics And Business Strategy
he production function Q = L^.5K^.5 is called
Cobb Douglas.
Leontief.
Linear.
none of the above.
~ Cobb Douglas.
The production function for a competitive firm is Q = K.5L.5. The firm sells its
output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at
25 units. T...
Managerial Economics and
Business Strategy Midterm
Questions And Answers
manager
✓~ A person who directs resources to achieve a stated goal.
Economics
✓~ The science of making decisions in the presence of scarce resources.
managerial economics
✓~ The study of how to direct scarce resources in the way that most efficiently
achieves a managerial goal.
economic profits
✓~ The difference between total revenue and total opportunity cost.
opportunity cost
, ✓~ The cost of the explicit and implicit resources that are forgone when a
decision is made.
incentives
✓~ Affect how resources are used and how hard workers work.
consumer-producer rivalry
✓~ Occurs because of the competing interests of consumers and producers.
consumer-consumer rivalry
✓~ Reduces the negotiating power of consumers in the marketplace.
producer-producer rivalry
✓~ Functions only when multiple sellers of a product compete in the
marketplace.
present value
✓~ The amount that would have to be invested today at the prevailing interest
rate to generate the given future value.
,net present value
✓~ The present value of the income stream generated by a product minus the
current cost of the project.
value of a firm
✓~ Takes into account the long-term impact of managerial decisions on profits.
managerial analysis
✓~ States that optimal managerial decisions involve comparing the marginal (or
incremental) benefits of a decision with the marginal (or incremental) costs.
marginal benefit
✓~ The change in total benefits arising form a change in the managerial control
variable, Q.
marginal cost
✓~ The change in total costs arising from a change in the managerial control
variable, Q.
incremental revenues
, ✓~ The additional revenues that stem from a yes-or-no decision.
incremental costs
✓~ The additional costs that stem from a yes-or-no decision.
variable costs
✓~ Costs that change with changes in output; include the costs of inputs that
vary with output.
short-run cost function
✓~ A function that defines the minimum possible cost of producing each output
level when variable factors are employed in the cost-minimizing fashion.
average fixed cost
✓~ Fixed costs divided by the number of units of output.
average variable cost
✓~ Variable costs divided by the number of units of output.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TestTrackers. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.79. You're not tied to anything after your purchase.
