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Which of the following areas shows the connection between economics and management?

Select one:

a.Financial analysis

b.Business concepts

c.Decision making

d.Leadership

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Managerial economics involves a four-stage model of change. Which of the following is one of those stages?

Select one:

a.Income management

b.Revenue plus

c.Expense management

d.Economic plus

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When a company needs to determine its breakdown in the market, its leaders consider which of the following questions?

Select one:

a.What is the segregation in the market?

b.What are the company's hiring and staffing needs?

c.How does the company produce its goods?

d.What type of product does the company produce?

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Managerial economics combines an understanding of four areas. Which of the following is not one of these areas?

Select one:

a.Finance

b.Statistics

c.Marketing

d.Managerial accounting

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Which of the five forces relates to a company's ability to maintain profits in the industry and is contingent on the force of rivalry between companies in the same industry?

Select one:

a.Force 2: Power of input suppliers

b.Force 3: Power of buyers

c.Force 1: Entry

d.Force 4: Industry rivalry

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Which of the five forces refers to when suppliers agree to satisfactory conditions for their efforts, yet their profits decrease?

Select one:

a.Force 2: Power of input suppliers

b.Force 3: Power of buyers

c.Force 1: Entry

d.Force 4: Industry rivalry

Question7

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Which concept ensures that companies make the best use of their limited resources?

Select one:

a.Assets

b.Liabilities

c.Expenses

d.Profits

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The five forces are not meant to replace __________ and __________ economic philosophies, which are part of making thorough decisions from a business perspective.

Select one:

a.checking; balancing

b.trial; error

c.analyzing; accepting

d.balancing; analyzing

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What is the most well-known form of profits?

Select one:

a.Financial

b.Managerial

c.Analytical

d.Accounting

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Which stage of change describes the state of companies that had a dominant place in the market years ago?

Select one:

a.Stage 4: Revenue plus

b.Stage 3: Revenue management

c.Stage 2: Cost management

d.Stage 1: Cost plus

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Which of the following is the most important step in the decision-making process?

Select one:

a.Determine the objective.

b.Explore the alternatives.

c.Define the problem.

d.Make a choice.

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What is the primary goal of a company's private and public decisions?

Select one:

a.Increase profit.

b.Satisfy customers.

c.Decrease costs.

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Which of the following is not one of the six steps of decision making?

Select one:

a.Explore the alternatives.

b.Solve the problem.

c.Determine the objective.

d.Predict consequences.

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What options do companies offer shareholders who do not visit the office on a regular basis?

Select one:

a.Profit sharing

b.Retirement plan

c.Incentive plan

d.Incentive bonus

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Which type of rivalry can direct market practice?

Select one:

a.Consumer-producer rivalry

b.Producer-producer rivalry

c.Consumer-consumer rivalry

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Which of the following does not influence the decision making of companies, employees, customers, buyers, and sellers?

Select one:

a.Benefit-cost analysis

b.Markets

c.Incentives

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Based on the formula PV=FV/(1+i)^n, what is the present value of $500 in 20 years when the interest is 8%?

Select one:

a.$40

b.$107.27

c.$462.96

d.$6,250

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In marginal analysis, what does B(Q) signify?

Select one:

a.Costs

b.Profits

c.Units

d.Benefits

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What is the time value of money?

Select one:

a.Market cost

b.Opportunity cost

c.Total cost

d.Benefit cost

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Of the six steps in decision making, which one requires managers to ask questions to identify the problem?

Select one:

a.Step 6: Perform sensitivity analysis.

b.Step 1: Define the problem.

c.Step 3: Explore the alternatives.

d.Step 5: Make a choice.

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Which of the following costs are variable costs for a candy plant? (Select all that apply.)

Select one or more:

a.Electricity to power the candy manufacturing machines

b.Costs of material for wrapping

c.Expenses for an accountant to formulate the tax returns

d.Fees to design the candy wrappers

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Average variable cost offers a degree of __________ costs per item.

Select one:

a.marginal

b.variable

c.fixed

d.total

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Short run is the period of time in which __________ elements of production exist.

Select one:

a.fixed

b.average

c.variable

d.marginal

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Variable costs increase and decrease as output __________.

Select one:

a.decreases

b.increases

c.stays the same

d.fluctuates

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The opportunity cost related to choosing a specific conclusion is determined through its __________.

Select one:

a.decisions

b.expenses

c.effort

d.profits

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A sunk cost is a cost already __________ that the company cannot __________.

Select one:

a.paid; earn

b.incurred; recover

c.refunded; return

d.paid; deliver

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What type of cost involves an evaluation of comparative advantages and disadvantages?

Select one:

a.Opportunity cost

b.Total cost

c.Variable cost

d.Fixed cost

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Growing profits to scale occurs if a certain percentage of __________ in all inputs ends in a larger percentage of __________ in outputs.

Select one:

a.growth; increase

b.increase; decrease

c.growth; change

d.decrease; increase

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A production process has economies of scope when the cost of producing multiple goods is __________ the aggregate cost of producing each item separately.

Select one:

a.less than

b.greater than

c.equal to

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What is the percentage adjustment in output that results from a 1% growth in all inputs?

Select one:

a.Economies of scope

b.Continuous profit

c.Growing profit

d.Output resistance

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Which demand shifter gives customers information about the location or quality of a product in order to encourage them to purchase the product, which can shift the demand curve to the right?

Select one:

a.Population

b.Prices of related goods

c.Advertising

d.Consumer income

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The demand function demonstrates that the quantity of a good purchased is based on which of the following?

Select one:

a.Price and demand shifters

b.Percentage and ratios

c.Expenses and owners' equity

d.Types of customers

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Which of the following is not a demand shifter?

Select one:

a.Advertising

b.Increase in profits

c.Consumer income

d.Population

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Which of the following is not a linear role that affects demand?

Select one:

a.Expenses

b.Values

c.Revenue

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Which of the following does not affect the own-price elasticity of a good?

Select one:

a.Time

b.Expenditure share

c.Available substitutes

d.Retained earnings

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What is marginal revenue?

Select one:

a.The adjustment in total revenue based on a variation in output

b.The change in total cost as the quantity produced changes by one unit

c.The difference between the total cost of producing an item and the revenue earned by producing that additional item

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Which of the following does affect the own-price elasticity of a good?

Select one:

a.Expenditure share

b.Time

c.Available substitutes

d.All of the above

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Customers will often buy an extra unit of a good if the price __________.

Select one:

a.decreases

b.increases

c.stays the same

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What is the adjustment in total revenue based on a variation in output?

Select one:

a.Total revenue

b.Marginal analysis

c.Marginal revenue

d.Profit analysis

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Which of the following qualitative tools enables managers to see the entire picture of a company?

Select one:

a.Marginal analysis

b.Profit analysis

c.Demand analysis

d.Supply analysis

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The theory of free entry and exit says that new companies can enter the market if they achieve __________.

Select one:

a.costs

b.profits

c.products

d.expenses

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Which of the following is not a characteristic of a monopolistically competitive industry?

Select one:

a.Companies have restricted entry into the industry.

b.Companies have unrestricted entry into and exit out of the industry.

c.Every company in the industry creates a specific product.

d.Several consumers and suppliers exist.

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Which of the following is not a primary element of perfect competition?

Select one:

a.No operation costs exist.

b.Consumers and suppliers have identical material.

c.No profits exist.

d.Every company in the market creates a similar product.

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To sell more of its product, a company must __________ its price.

Select one:

a.charge back

b.increase

c.supplement

d.decrease

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Monopolists lack unlimited __________.

Select one:

a.demand

b.supply

c.power

d.markets

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Which of the following does not contribute to monopoly power?

Select one:

a.Economies of profit

b.Economies of scale

c.Cost complementarities

d.Patents and other legal barriers

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Monopoly describes a situation in which a single company serves an entire __________.

Select one:

a.market

b.profit

c.product

d.supply

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Diseconomies of scale occur when long-run average __________ increase as output increases.

Select one:

a.expenses

b.costs

c.profits

d.inputs

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In which type of market do all companies charge their customers an identical price for the product and base this price on the dealings of all consumers and suppliers in the market?

Select one:

a.Competitive

b.Financial

c.Monopolistic

d.Supply

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Which of the following is not a marketing situation in which managers make decisions?

Select one:

a.Perfect competition

b.Monopoly

c.Oligopoly

d.Monopolistic competition

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Which of the following is not a type of capital budgeting decision?

Select one:

a.Enhanced products

b.Lease or buy

c.Extension of amenities

d.Replacement standards

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Which of the following is not a form of cash flow?

Select one:

a.Primary cash flow

b.Budgeting cash flow

c.Noncash investment

d.Operating cash flow

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Capital budgeting refers to decisions about __________ and __________ during a designated time period.

Select one:

a.capital; profits

b.expenses; revenues

c.profits; costs

d.budgets; surpluses

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The ability to invest in working capital is a(n) __________expenditure.

Select one:

a.income

b.supply

c.expense

d.cash

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Which of the following is not needed to participate in capital plans?

Select one:

a.Expenses

b.Dividend growth model

c.Debts

d.Equity

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Economists generally agree that capital rationing does not allow companies to attain their maximum __________.

Select one:

a.expenses

b.profits

c.worth

d.debts

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To participate in capital plans, an organization must obtain __________.

Select one:

a.shares

b.funding

c.profits

d.supply

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Marginal regulation specifies that companies must participate in every project that has a(n) __________ that surpasses the marginal cost of capital.

Select one:

a.internal rate of return

b.profit

c.expense

d.capital

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Which of the following refers to decisions about where expenses and revenues for a specific activity should remain over a designated time period?

Select one:

a.Capital profits

b.Capital sales

c.Capital budgeting

d.Capital revenue

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What is the act of placing restrictions on the amount of new investments or projects a company undertakes?

Select one:

a.Capital rationing

b.Capital controlling

c.Capital budgeting

d.Capital revenue

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Which of the following is not a source of business risk?

Select one:

a.Profit and loss

b.Economic condition

c.Competition and technological change

d.Cost and expenses

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With risk, a specific __________ exists that shows how likely it is that each outcome will occur.

Select one:

a.profit

b.event

c.probability

d.distribution

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In a fiscal or economic model, what are two important positions?

Select one:

a.Risk and possibilities

b.Risk and reward

c.Risk and uncertainty

d.Risk and replication

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What is probability distribution?

Select one:

a.An increase in a company's sales that occurs because a competitor stops production

b.The possibility that a certain task will end in a loss

c.The event that occurs when a company throws away last year's product

d.A function that designates the probabilities of all potential events by percentage

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Which form of business risk might not continuously correspond with the inclusive economy?

Select one:

a.Economic conditions

b.Variations in categorical businesses

c.Competition and technological change

d.Changes in consumer preferences

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If __________ is unknown, a potential for uncertainty in pricing will exist.

Select one:

a.supply

b.profit

c.demand

d.expense

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A(n) __________ is a variable that has an unknown value.

Select one:

a.allocated variable

b.random variable

c.binomial random variable

d.trinomial random variable

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An easy way to eliminate uncertainty about the customers of a particular retail store is to __________ the number and variety of consumers who shop there.

Select one:

a.categorize

b.decrease

c.estimate

d.increase

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The best price choice for a new product depends on which of the following?

Select one:

a.The possibility of a successful launch in the first market

b.A decrease in profits from other products made by the same company

c.An increase in competitor prices of similar products

d.The cost to produce and market the product

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What is price discrimination?

Select one:

a.A variable that has an unknown value

b.The assumption that the value of an investment will be modified

c.A pricing strategy that charges customers different prices for the same product or service

d.Mathematical results expressed in two separate values

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As __________ reaches unit elasticity, the ideal markup reaches an infinite factor.

Select one:

a.demand

b.supply

c.profit

d.expense

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A common misconception is that monopolies frequently generate large __________.

Select one:

a.gains

b.expenses

c.returns

d.losses

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A misconception is that ________ frequently generate large returns. Gains

Select one:

a.variables

b.supplies

c.demands

d.monopolies

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If vendors are unresponsive to __________, the reduction in the cost of providing goods or services will not persuade them to sell additional products.

Select one:

a.cost

b.expense

c.profit

d.supply

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A misconception about supply shifts is that if vendors' costs __________ by a specific amount, the market price will ultimately __________ by the same amount.

Select one:

a.increase; decrease

b.decrease; increase

c.increase; increase

d.decrease; decrease

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Which type of shift refers to influences (other than price) that lead to a shift?

Select one:

a.Supply

b.Demand

c.Expense

d.Revenue

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This type of rationale ignores the effect that the __________ shift has on consumers.

Select one:

a.supply

b.demand

c.expense

d.revenue

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When pricing does not change, __________ decrease, which in turn affects __________.

Select one:

a.sales; revenues

b.revenues; sales

c.profits; sales

d.sales; profits

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When a company achieves total capacity utilization, __________ can increase.

Select one:

a.expenses

b.supply

c.sales

d.costs

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In a company's economies of scale, the average __________ is based on the overall level of production.

Select one:

a.demand

b.expense

c.cost

d.profit