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ECON 528 Midterm || WITH ANSWERS 100% PASSED
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  • Econ 528

Microeconomics studies the allocation of correct answers scarce resources Managerial Economics correct answers helps managers make decisions in the face of scarcity Microeconomics models are used to correct answers make predictions explain real-life phenomena evaluate production alternative...

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  • August 18, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • microeconomics studies the allocation of

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  • Econ 528
  • Econ 528

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ECON 528 Midterm || WITH ANSWERS 100% PASSED
Microeconomics studies the allocation of correct answers scarce resources

Managerial Economics correct answers helps managers make decisions in the face of scarcity

Microeconomics models are used to correct answers make predictions
explain real-life phenomena
evaluate production alternatives

Managerial economics as a specialized branch of economics correct answers provide logic
and methodology to find solutions to business problems

Managerial Economics is best defined as the economic study of correct answers how
businesses can decide on the best use of scarce resources

Microeconomics includes the study of the correct answers choices made by individuals and
businesses

The form of economics MOST relevant to managerial decision-making within the firm is:
correct answers microeconomics

CEOS should focus on correct answers maximizing firm profits

Managerial economics generally refers to the integration of economic theory with business
correct answers practice

A managerial decision is not profitable if correct answers it increases costs more than revenue

true or False:

According to the profit-maximization goal, the firm should attempt to maximize short-run
profits since there is too much uncertainty associated with long-run profits correct answers
false

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon,
Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which
was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5
percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-
time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing
material. Based on this information, what is the amount of her explicit costs? correct answers
$45,500

True or False:

Economic costs include implicit costs but not explicit costs. correct answers false

Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic
camera cases. Assume that output can only be increased in batches of 100 units.
3) Refer to Table 12-1. What is the fixed cost of production?

, Total Cost = 1,360 & Total Variable Cost = 360 correct answers $1,000

If the market price of each camera case is $8, what is the profit-maximizing quantity? correct
answers 400 units

If the market price of each camera case is $8, what is the firm's total revenue?

MC = 8 & Quantity = 400 correct answers $3200

If the market price of each camera case is $8 and the firm maximizes profit, what is the
amount of the firm's profit or loss? correct answers profit of $440

Suppose the fixed cost of production rises by $500 and the price per unit is still $8. What
happens to the firm's profit-maximizing output level? correct answers it will remain the same

The firm will not produce in the short run if the output price falls below correct answers
$2.80

Which of the following is a factor of production that generally is fixed in the short-run?
correct answers a factory building

Which of the following is an example of a long run adjustment? correct answers Wal-Mart
builds another supercenter

Academic book publishers hire editors, designers, and production and marketing managers
who help prepare books for publication. Because these employees work on several books
simultaneously, the number of people the company hires will not go up and down with the
quantity of books the company publishes during any particular year. The salaries and benefits
of people in these job categories will be included in correct answers fixed cost and total cost
but not variable cost

If, for a given output level, a perfectly competitive firm's price is less than its average
variable cost, the firm correct answers should shut down

Which of the following statements best describes the economic short run? correct answers it
is a period during which at least one of the firm's inputs is fixed

Unlike an accountant, an economist measures costs on a ____________ basis. correct
answers replacement

When an economist uses the term "cost" referring to a firm, the economist refers to the
correct answers opportunity cost of producing a good or service, which includes both implicit
and explicit cost

Accounting cost correct answers are historical costs

A firm earns a normal profit when its total revenues just offset both the ____ cost and _____
cost correct answers accounting; opportunity

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