Question 1

Which of the following cost line items would be a variable cost?

Accepted Answer

A) Office salaries 
B) Rent 
C) Raw Materials 
D) Insurance 
E) None of the above 
A) Office salaries 
B) Rent 
C) Raw Materials 
D) Insurance 
E) None of the above

Question 2

In the following sequential decision tree,Alpha chooses a strategy first and then Beta chooses a strategy.Using backwards inductions,determine the Subgame Perfect Nash Equilibrium strategies and payoffs?

Accepted Answer

Alpha - Medium with

Question 3

If a firm is producing as efficiently as it knows how,then how will the total cost function slope?

Accepted Answer

A) Upward 
B) Downward 
C) No Slope 
D) Downward until an output threshold value,then upward 
E) Upward until an output threshold value,then downward 
A) Upward 
B) Downward 
C) No Slope 
D) Downward until an output threshold value,then upward 
E) Upward until an output threshold value,then downward

Question 4

Suppose a firm's plant produces Q units in any given year.The plant itself operates with annualized costs of $10M and other annual fixed expenses totaling $3M.In addition,the firm's variable costs depend on Q and are given by the formula 5Q²+3Q.What is the formula for the firm's Average Fixed Costs?

Accepted Answer

The answer of Suppose a firm's plant produces Q units...

Question 5

In what special situation might the law of demand not hold?

Accepted Answer

A) In a perfectly competitive market 
B) When there is a high price elasticity of demand 
C) When MR=MC 
D) At the Nash Equilibrium 
E) If high prices confer prestige 
A) In a perfectly competitive market 
B) When there is a high price elasticity of demand 
C) When MR=MC 
D) At the Nash Equilibrium 
E) If high prices confer prestige

Question 6

Which of the following would be the range of elasticity for a product with an "inelastic" demand?

Accepted Answer

A)     1 
D)    > 2 
E) none of the above 
A)     1 
D)    > 2 
E) none of the above

Question 7

Suppose a firm's plant produces Q units in any given year.The plant itself operates with annualized costs of $10M and other annual fixed expenses totaling $3M.In addition,the firm's variable costs depend on Q and are given by the formula 5Q²+3Q.What is the formula for the firm's Average Variable Costs?

Accepted Answer

The answer of Suppose a firm's plant produces Q units...

Question 8

The basic law of demand says that all other things being the same,_______________________.

Accepted Answer

A) The lower the price of a product,the less of it consumers will purchase 
B) The higher the price of a product,the less of it consumers will purchase 
C) The lower the price of a product,the more of it consumers will purchase 
D) The higher the price of a product,the more of it consumers will purchase 
E) The greater the number of units of a product sold in the past,the more of it consumers will purchase that product in the future 
A) The lower the price of a product,the less of it consumers will purchase 
B) The higher the price of a product,the less of it consumers will purchase 
C) The lower the price of a product,the more of it consumers will purchase 
D) The higher the price of a product,the more of it consumers will purchase 
E) The greater the number of units of a product sold in the past,the more of it consumers will purchase that product in the future

Question 9

Which of the following best describes average cost?

Accepted Answer

A) The per-unit-of-output cost for a product at a given quantity 
B) The incremental cost of producing one more unit of output. 
C) A cost invariant to the firm's output 
D) The sum of all costs associate with the production of a product 
E) The cost of fixed items such as general and administrative expenses 
A) The per-unit-of-output cost for a product at a given quantity 
B) The incremental cost of producing one more unit of output. 
C) A cost invariant to the firm's output 
D) The sum of all costs associate with the production of a product 
E) The cost of fixed items such as general and administrative expenses

Question 10

If a firm can sell its product for more than its fixed costs,but not for more than its totals costs:

Accepted Answer

A) It will shut down 
B) It will lower its fixed costs 
C) It will stop producing that product 
D) It will continue to operate in the short run at a loss 
E) It will increase its production quantity 
A) It will shut down 
B) It will lower its fixed costs 
C) It will stop producing that product 
D) It will continue to operate in the short run at a loss 
E) It will increase its production quantity

Question 11

Which of the following best describes marginal cost?

Accepted Answer

A) The per-unit-of-output cost for a product 
B) The incremental cost of producing one more unit of output. 
C) A cost invariant to the firm's output 
D) The sum of all costs associate with the production of a product 
E) The cost of fixed items such as general and administrative expenses 
A) The per-unit-of-output cost for a product 
B) The incremental cost of producing one more unit of output. 
C) A cost invariant to the firm's output 
D) The sum of all costs associate with the production of a product 
E) The cost of fixed items such as general and administrative expenses

Question 12

Suppose a factory is producing 100 units and the price of each unit is $10.If raising the price to $12 per unit results in a drop in sales of 12 units,what is the price elasticity of demand,η?

Accepted Answer

A) 6 
B) 0.6 
C) 1.67 
D) 0.8 
E) 0.17 
A) 6 
B) 0.6 
C) 1.67 
D) 0.8 
E) 0.17

Question 13

What are the Nash Equilibrium Strategies and corresponding payoffs for the following matrix?
Beta:

Accepted Answer

Alpha - Enter Market

Question 14

Which of the following cost line items would be a fixed cost?

Accepted Answer

A) Commissions to Salespeople 
B) Rent 
C) Raw Materials 
D) Packaging 
E) Shipping/Delivery Charges 
A) Commissions to Salespeople 
B) Rent 
C) Raw Materials 
D) Packaging 
E) Shipping/Delivery Charges

Which of the following cost line items would be a variable cost?

In the following sequential decision tree,Alpha chooses a strategy first and then Beta chooses a strategy.Using backwards inductions,determine the Subgame Perfect Nash Equilibrium strategies and payoffs?

If a firm is producing as efficiently as it knows how,then how will the total cost function slope?

In what special situation might the law of demand not hold?

Which of the following would be the range of elasticity for a product with an "inelastic" demand?

The basic law of demand says that all other things being the same,_______________________.

Which of the following best describes average cost?

If a firm can sell its product for more than its fixed costs,but not for more than its totals costs:

Which of the following best describes marginal cost?

Suppose a factory is producing 100 units and the price of each unit is $10.If raising the price to $12 per unit results in a drop in sales of 12 units,what is the price elasticity of demand,η?

What are the Nash Equilibrium Strategies and corresponding payoffs for the following matrix? Beta:

Which of the following cost line items would be a fixed cost?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

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Exam 15: Economics Primer

Which of the following cost line items would be a variable cost?

In the following sequential decision tree,Alpha chooses a strategy first and then Beta chooses a strategy.Using backwards inductions,determine the Subgame Perfect Nash Equilibrium strategies and payoffs?

If a firm is producing as efficiently as it knows how,then how will the total cost function slope?

In what special situation might the law of demand not hold?

Which of the following would be the range of elasticity for a product with an "inelastic" demand?

The basic law of demand says that all other things being the same,_______________________.

Which of the following best describes average cost?

If a firm can sell its product for more than its fixed costs,but not for more than its totals costs:

Which of the following best describes marginal cost?

Suppose a factory is producing 100 units and the price of each unit is $10.If raising the price to $12 per unit results in a drop in sales of 12 units,what is the price elasticity of demand,η?

What are the Nash Equilibrium Strategies and corresponding payoffs for the following matrix? Beta:

Which of the following cost line items would be a fixed cost?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

Filters