BE 301: Managerial Economics Chapters 1-7 || with 100% Accurate Solutions.
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An individual's value for a good or service is the
a. The amount of money he or she used to pay for a good
b. The amount of money he or she is willing to pay for it
c. The amount of money he or she has to spend on goods
d. None of the above correct answers B
The biggest advantage of capitali...
BE 301: Managerial Economics Chapters 1-7 || with 100%
Accurate Solutions.
An individual's value for a good or service is the
a. The amount of money he or she used to pay for a good
b. The amount of money he or she is willing to pay for it
c. The amount of money he or she has to spend on goods
d. None of the above correct answers B
The biggest advantage of capitalism is
a. Generates wealth with the help of government intervention
b. That prices assists in moving assets from high valued to low value uses
c. It forces involuntary exchanges
d. Creates wealth by letting a person follow his or her own self-interest correct answers D
Wealth creating transactions are more likely to occur
a. With private property rights
b. With contract enforcement
c. With black markets
d. a and b correct answers D
Government regulation
a. provides incentives to conduct business in an illegal black market
b. plays no role in generating wealth
c. is the best way to eliminate poverty
d. does not enforce property rights correct answers A
An example of price floor is
a. Minimum wages
b. Rent controls in New York
c. Both a and b
d. None of the above correct answers A
A price ceiling:
a. Is a government-set price above market equilibrium price.
b. Is the equivalent of an implicit tax on producers and an implicit subsidy to
consumers.
c. Will create a surplus.
d. Causes an increase in consumer and producer surplus. correct answers B
Taxes:
a. Impede the movement of assets to higher valued uses
b. Reduce incentives to work
c. Decreases the number of wealth creating transactions
d. All the above correct answers D
, A consumer values a car at $30,000 and a producer values the same car at $20,000. If the
transaction is completed at $24,000, the transaction will generate:
a. No surplus
b. $4,000 worth of seller surplus and unknown amount of buyer surplus
c. $6,000 worth of buyer surplus and $4,000 of seller surplus
d. $6,000 worth of buyer surplus and unknown amount of seller surplus correct answers C
A consumer values a car at $525,000 and a producer values the same car at $485,000. If sales
tax is 8% and is levied on the seller, then the sellers bottom line price is
a. $527,000
b. $523,800
c. $525,000
d. $500,000 correct answers B
Efficiency implies opportunity,
a. Always
b. Never
c. Only if accompanied by secure property rights
d. None of the above correct answers B
A business owner makes 1000 items a day. Each day he or she contributes 8 hours to
produce those items. If hired, elsewhere he/she could have earned $250 an hour. The item
sells for $15 each. Production does not stop during weekends. If the explicit costs total
$150,000 for 30 days, the firm's accounting profit for the month equals:
a. $300,000
b. $60,000
c. $450,000
d. $240,000 correct answers A
A business owner makes 1000 items a day. Each day he/she contributes 8 hours to produce
those items. If hired, elsewhere he/she could have earned $250 an hour. The item sells for
$15 each. Production does not stop during weekends. If the explicit costs total $150,000 for
30 days, the economic profit for the month equals:
a. $300,000
b. $60,000
c. $450,000
d. $240,000 correct answers D
If a firm is earning negative economic profits, it implies
a. That the firm's accounting profits are zero
b. That the firm's accounting profits are positive
c. That the firm's accounting profits are negative
d. More information is needed to conclude about accounting profits correct answers D
Opportunity costs arise due to
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