1. Which of the following best describes the concept of
"opportunity cost"?
- A) The cost of producing one more unit of a good
- B) The value of the next best alternative foregone
- C) The total cost of all resources used in production
- D) The cost of acquiring new customers
- ANS: B) The value of the next best alternative foregone
- Rationale: Opportunity cost represents the value of the next
best alternative that is given up when a decision is made.
,2. What is the primary purpose of marginal analysis in
managerial economics?
- A) To determine the total cost of production
- B) To analyze the additional benefits and costs of a decision
- C) To calculate the average cost of production
- D) To forecast future market trends
- ANS: B) To analyze the additional benefits and costs of a
decision
- Rationale: Marginal analysis helps in evaluating the
additional benefits and costs associated with a decision to
optimize resource allocation.
, 4. What is the primary difference between fixed costs and
variable costs?
- A) Fixed costs change with the level of output, while variable
costs remain constant
- B) Fixed costs remain constant regardless of output, while
variable costs change with the level of output
- C) Fixed costs are incurred only in the short run, while
variable costs are incurred only in the long run
- D) Fixed costs are associated with labor, while variable costs
are associated with materials
- ANS: B) Fixed costs remain constant regardless of output,
while variable costs change with the level of output
- Rationale: Fixed costs do not vary with the level of output,
while variable costs fluctuate based on production levels.
5. Which of the following best describes the concept of "price
elasticity of demand"?
- A) The responsiveness of quantity demanded to changes in
price
- B) The total revenue generated from sales
- C) The relationship between price and supply
- D) The cost of producing one more unit of a good
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 Bankart. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.49. You're not tied to anything after your purchase.
