Managerial economics is best defined as the economic study of: - ANSWERShow businesses can decide on the best use of scarce resources.
Managerial economics: - ANSWERShelps managers make decisions in the face of scarcity.
Microeconomics includes the study of the; - ANSWERSb. choices made by in...
ECON 528 Questions & Answers
Correct!!
Managerial economics is best defined as the economic study of: - ANSWERShow
businesses can decide on the best use of scarce resources.
Managerial economics: - ANSWERShelps managers make decisions in the face of
scarcity.
Microeconomics includes the study of the; - ANSWERSb. choices made by individuals
and businesses.
The form of economics most relevant to managerial decision-making within the firm is: -
ANSWERSb. microeconomics
CEOs should focus on - ANSWERSb. maximizing firm profits.
Managerial economics generally refers to the integration of economic theory with
business - ANSWERSPractice
A managerial decision is not profitable if - ANSWERSb. it increases costs more than
revenue
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. -
ANSWERSFalse
1) Microeconomics studies the allocation of - ANSWERSB) scarce resources.
2) Managerial economics - ANSWERSC) helps managers make decisions in the face of
scarcity.
4) Microeconomic models are used to - ANSWERSA) make predictions.
B) explain real-life phenomena.
C) evaluate production alternatives.
D) All of the above.
Answer: D
5) Managerial Economics as a specialized branch of Economics - ANSWERSb. Provide
logic and methodology to find solutions to business problems
1) Unlike an accountant, an economist measures costs on a(n) ________ basis. -
ANSWERSreplacement
, 10) When an economist uses the term "cost" referring to a firm, the economist refers to
the - ANSWERSd. opportunity cost of producing a good or service, which includes both
implicit and explicit cost.
2) Accounting costs - ANSWERSa. are historical costs.
3) A firm earns a normal profit when its total revenues just offset both the ________
cost and ________ cost. - ANSWERSa. accounting; opportunity
5) If Melissa owns a software company that incurs no fixed costs, then - ANSWERSd.
her total cost equals her total variable cost.
6) In the short run, a firm cannot change the amount of capital it uses. Therefore the
cost of capital is a - ANSWERSb. fixed cost.
7) Because the amount of labor a firm employs can be changed, the cost of labor is
known as - ANSWERSe. variable cost.
8) Marginal cost equals - ANSWERSa. the change in total cost that results from a one-
unit increase in output.
9) Lauren runs a chili restaurant in San Francisco. Her total revenue last year was
$110,000. The rent on her restaurant was $48,000, her labor costs were $42,000, and
her materials, food and other variable costs were $20,000. Lauren could have worked
as a biologist and earned $50,000 per year. An economist calculates her implicit costs
as - ANSWERSa. $50,000.
A factor of production that can be easily changed in the relevant time period is called a:
- ANSWERSd. variable input.
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 implicit costs? - ANSWERS41,500
Accounting costs exclude implicit costs. - ANSWERSa. The $10,000 Adam spent on
equipment is a fixed cost of business and the $12,000 he'll need to continue operations
is a variable cost.
Which of the following is the best example of a short run adjustment? - ANSWERSc.
Your local Wal-Mart hires two more associates.
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