1. Although there are many objectives of a business organization, the priority is to:

A. Revenue maximization

B. Profit maximization

C. Output maximization

D. Utility maximization

E. No correct answer

2. The economic profit of a business organization is calculated by:

A. total revenue less implicit and explicit costs

B. adding all the revenues from various product lines

C. total revenue less implicit cost

D. total revenue less explicit cost

E. adding revenues from shops in various locations

3. Which of the following is considered an implicit cost?

A. Use of your labor services in manning your business without paying yourself

B. Converting your existing warehouse to a store without charging any cost

C. The assistance provided by a relative without receiving a payment

D. All are examples of implicit cost

E. No correct answer

4. Which of the following is correct with respect to economic profit?

A. Economic profit is positive if total revenue is higher than explicit cost

B. Economic profit is positive if total revenue is higher than implicit cost

C. Economic profit is positive if total revenue is higher than the sum of implicit and explicit costs

D. Any of the A, B, and C are correct

E. None is correct

5. Managerial economics is based on the principles of:

A. Monetary economics

B. Public sector economics

C. Microeconomics

D. Institutional economics

E. None is correct

6. Which is/are correct?

A. Managerial economics is based on the Keynesians framework of correcting the short-run fluctuations in the economy

B. Managerial economics is based on the Neoclassical framework of maximizing the profits of the firm

C. Managerial economics is based on the Keynesian framework of aligning production with demand

D. A and B are correct

E. B and C are correct

7. Which of the following is important in making managerial decisions?

A. Analyzing the number of competitors to decide on optimal output and pricing

B. Understanding the psychology of the consumers to aid in developing a marketing strategy

C. Getting updates on government regulations and policies so the manager can violate the rules without being caught

D. A and B are important

E. A, B and C are important

8. Given a demand equation Q = 100 - 10 P, what is the inverse demand? Note that Q refers to the quantity demanded even if we do not represent it by Qd

A. P = 100 - 10 Q

B. P = 100 - 0.10 Q

C. P = 10 - 10 Q

D. P = 10 - 1/10 Q

E. No correct answer

9. Given the information in number 8, what is the total revenue equation? Note: caret (^) is used to indicate that the number next to it is an exponent

A. TR = 10 Q - 0.10 Q^2

B. TR = 100 Q - 10 Q^2

C. TR = 100 Q - 10 Q^3

D. TR = 10 Q - 10 Q^2

E. No correct answer

10. Which is correct in the graphical presentation of data in economics?

A. Price is an considered a dependent variable so it is written on the vertical axis, quantity demanded is the independent variable so it is written on the horizontal axis

B. Price is an considered the independent variable although it is written on the vertical axis, quantity demanded is the dependent variable although it is written on the horizontal axis

C. The graphical representation of demand is based on the inverse demand equation

D. A and C are correct

E. B and C are correct