(Combined) Managerial Economics Final, econ quiz 1
review, Econ Test 1, ECO Finale, Managerial
Economics Final, Managerial Econ 3125 Exam 1 Study
Guide, BA6010 Midterm (Homework Questions), ECN
4010 MASTER, All With Complete Verified Solutions 100%
2023/2024
A firm's total revenue function is given by R = 100 + 100Q - 2Q2. At Q = 10, which
of the following is true?
The firm's Marginal Revenue is $60
According to the law of demand, if a firm reduces the price of its good:
Consumers in the Market will demand more units of the good.
Managerial economics can best be defined as the ____________.
analysis of major management decisions using economic tools.
In evaluating public programs, benefit-cost analysis:
states that a program should be undertaken only if total benefits exceed total cost.
The demand for a product is given by P = 1,750 - 25Q. If the firm wishes to sell 50
units, each unit should be priced at:
$500
The initial price for an item is $5.00, and the quantity demanded is 400 units.
When the price is raised to $5.25, the quantity demanded falls to 350 units. The
absolute value of the point elasticity of demand is _____.
2.5
Assume that demand for a service depends upon price and income, where the
price elasticity of demand is EP = -0.6 and income elasticity is EY = 1.2. If price
falls by 4% and income rises by 2%, the quantity demanded of the service will
_____.
increase by 6%
A regression analysis is said to suffer from multicollinearity when:
wrong answer
The demand curve that views Q as a function of Price can also be presented as
Price as a function of Quantity. We call this later presentation the ________.
inverse demand curve
Which of the following can be used to correct for seasonality in time-series
modeling?
dummy variables
Given that the market share of a firm depends on many unpredictable factors, a
firm will use a _____ economic model to estimate the market share for one of its
products.
probabilistic
A product's point price elasticity has been estimated at -1.5. At the initial price of
$20, the quantity demanded was 10 units. If the firm cuts the price to $17.50,
quantity demanded and sold is expected to increase by _____.
,18.75%
table
answer
If the price of a good or service decreases, what happens to the firm's demand
curve?
There is a downward movement along the demand curve
In contrast to simple regression, multiple regression considers:
several independent variables rather than one.
A firm's demand equation is given by: Q = 60 - 60P + 2Y, where Q is quantity, P is
price, and Y is income. If price increases by $2 and income increases by $80, then
quantity demanded will:
increase by 40 units
Managerial economics can best be defined as the:
analysis of major management decisions using economics tools
A firm's demand curve is given by Q = 800 - 2P, where P = price and Q = quantity.
Therefore, its inverse demand equation is:
P = 400 - .5Q
During our spring 2016 Economics 4357 class, the total number of possible
points to earn is __________.
500
A time-series model attempts to identify:
patterns of changes in a single variable over time.
If the sample variance of a set of observations is 225, its sample standard
deviation is equal to _____.
wrong answer
A firm's demand equation is given by: Q = 60 - 60P + 2Y, where Q is quantity, P is
price, and Y is income. If price increases by $1 and income increases by $80, then
quantity demanded will:
increase by 100 units
The government is deciding whether it should build a veteran's hospital in an
urban area. It will choose to build the hospital only if:
the total benefits from the hospital exceed total costs.
table 2
answer
table 3
answer
If the demand for a good is price-elastic, a cut in price will:
lead to an increase in quantity demanded and an increase in the firm's revenue.
The demand for a product is given by Q = 600 - 30P. At P = $15, the firm sells:
150 units
A good that has highly elastic demand is most likely to:
have a large number of substitutes.
A regression coefficient measures:
the change in the dependent variable due to a unit change in a particular independent
variable.
,When Amy was a student, she consumed beer with her dinner. Over the years, as
her income increased, she substituted beer for a glass of wine. From this
information, one can imply that:
Amy considers beer an inferior good.
If a study examines several different markets at the same time, and compares
outcomes with conditions in each market, it is specifically using:
wrong answer
Given the following demand curve: Q = 5.0 - 0.04 P, please match the inverse
demand curve below.
P = 1250 - 25 Q.
table 4
wrong answer
Econ 4357 generally addresses topics that typically labeled "microeconomic".
This means that topics focus on _____________.
wrong answer
Elements of economic trade-offs include ______________.
Consideration of benefits v. costs.
Short-term v. long-term results of decisions.
Risk v. returns of decisions.
If we use the equation, P = 170 - 20 Q, then to generate a revenue function we
have ___________.
R = 170 Q - 20 Q2
If we use the equation, P = 125 - 25 Q, then to generate revenue function we have
__________.
R = 125Q - 25Q2
A beverage company wants to launch a new diet soda aimed at diabetics and
health-conscious customers. It will use a _____ economic model to identify its
target customers.
deterministic
A cosmetics company is conducting a second-year review of one of its newest
products. The marketing department expects that the firm will continue to earn
profits from the sale of the product in the third year as it did in the past two years.
Senior management, however, feels that the profit projections would vary based
on other factors such as the price of the competitor's products, the actual level of
sales, and the possibility of cost reductions. In other words, the senior
management is undertaking _____.
a sensitive analysis
A firm's demand curve is given by Q = 800 - 2P, where P = price and Q = quantity.
Therefore, its inverse demand equation is____________.
P = 400 - .5Q
To maximize profit, the firm should set output at the level where ________.
marginal revenue is equal to marginal cost.
Assume that a firm is producing at its profit-maximizing level of output. A
decrease in the price of raw materials used in production is most likely to lead to
__________.
a fall in the price of the good and an increase in the quantity produced.
, Other factors constant, a change in _____ will cause a shift in a firm's demand
curve.
the general income level of consumers
If the price of a good or service increases, what happens to the firm's demand
curve?
There is an upward movement along the demand curve.
The price elasticity of demand is defined as the ratio of the _____ other factors
held constant.
percentage change in quantity demanded to the percentage change in price
When the demand for a product is said to be perfectly inelastic, it implies that:
with a change in price, change in quantity demanded is zero.
The cross-price elasticity between two products is estimated to be +2. If the price
of the first product is increased by 8%, demand for the second product will _____.
increase by 16%
A response bias occurs when:
responses do not reflect the true preferences and attitudes of respondents.
Which of the following is true of the R-squared statistic?
It measures the proportion of the variation of the dependent variable explained by the
multiple-regression equation.
Suppose that the "goodness of fit" of an equation is nearly perfect. What is the
value of the R2 statistic in this case?
Very close to +1
Start with the demand function P = 340 - 0.8 Q and
the total cost function is C = 120 + 100 Q.
Solve for the firm's optimal (profit-maximizing) output (Q = )
150
the demand curve that views Q as a function of Price can also be presented as
Price as a function of Quantity. We call this later presentation the ________.
Inverse demand curve
To maximize profit, the firm will set output at the level where ________.
marginal revenue is equal to marginal cost
Given the following demand curve: Q = 20 - 0.5 P, please match the inverse
demand curve below.
P = 40 - 2 Q.
A beverage company wants to launch a new diet soda aimed at diabetics and
health-conscious customers. It will use a _____ economic model to identify its
target customers.
deterministic
Managerial economics can best be defined as the ____________.
analysis of major management decisions using economic tools.
A cosmetics company is conducting a second-year review of one of its newest
products. The marketing department expects that the firm will continue to earn
profits from the sale of the product in the third year as it did in the past two years.
Senior management, however, feels that the profit projections would vary based
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