Question 1

Marginal net benefits in the above table

Accepted Answer

A) initially increase, reach a maximum and then decrease. 
B) initially decrease, reach a minimum and then increase. 
C) remain the relatively stable over different values for the control variable. 
D) initially remain relatively stable and then decrease. 
A) initially increase, reach a maximum and then decrease. 
B) initially decrease, reach a minimum and then increase. 
C) remain the relatively stable over different values for the control variable. 
D) initially remain relatively stable and then decrease.

Question 2

Incentive plans imply:

Accepted Answer

A) if managers get highly paid, then they work hard. 
B) if managers put forth little effort, they receive little pay; if they put forth much effort and hence generate many sales, they receive a lot of pay. 
C) managers are not selfish. 
D) managers should be watched all the time. 
A) if managers get highly paid, then they work hard. 
B) if managers put forth little effort, they receive little pay; if they put forth much effort and hence generate many sales, they receive a lot of pay. 
C) managers are not selfish. 
D) managers should be watched all the time.

Question 3

Suppose the growth rate of the firm's profit is 7%, the interest rate is 10%, and the current profits of the firm are 120 million dollars.What is the value of the firm?

Accepted Answer

A) $44 million. 
B) $4,280 million. 
C) $4,400 million. 
D) $6,800 million. 
A) $44 million. 
B) $4,280 million. 
C) $4,400 million. 
D) $6,800 million.

Question 4

Suppose the interest rate is five percent, the expected growth rate of the firm is two percent, and the firm is expected to continue forever.If current profits are $1,000, what is the value of the firm?

Accepted Answer

A) $31,000. 
B) $30,000. 
C) $26,500. 
D) $35,000. 
A) $31,000. 
B) $30,000. 
C) $26,500. 
D) $35,000.

Question 5

-What is the marginal cost of producing the tenth unit?

Accepted Answer

A) 80. 
B) 5. 
C) 40. 
D) 4. 
A) 80. 
B) 5. 
C) 40. 
D) 4.

Question 6

You are the manager of a Fortune 500 hotel chain and must decide where to locate a new hotel.Based on tax considerations, your accounting department suggests that Atlantic City is the best choice, followed closely by Las Vegas.In particular, your current year tax savings from locating in Atlantic City are $4 million but only $3 million in Las Vegas.Your marketing department, on the other hand, has provided you with sales estimates that suggest that the present value of the gross (of taxes) operating profits from locating in Atlantic City are only $10 million but are $14 million for Las Vegas.It will cost $14 million to build the hotel in either location.Ignoring all other considerations, where should you build the hotel? What are your firm's economic profits if you locate the hotel in Atlantic City?

Accepted Answer

Ignoring other considerations, if you bu

Question 7

-Suppose total benefits and total costs are given by B(Y) = 150Y - 10Y2 and C(Y) = 5Y2.What level of Y will yield the maximum net benefits?

Accepted Answer

A) 7. 
B) 10/9. 
C) 50. 
D) 150/20. 
A) 7. 
B) 10/9. 
C) 50. 
D) 150/20.

Question 8

If the annual interest rate is 0%, the present value of receiving $1.10 in the next year is:

Accepted Answer

A) $1.00. 
B) $1.01. 
C) $1.11. 
D) $1.10. 
A) $1.00. 
B) $1.01. 
C) $1.11. 
D) $1.10.

Question 9

Your firm's research department has estimated your total revenues to be

Accepted Answer

@#IMG-DLM& and your total costs to be @#IMG-DLM& (Note that

Question 10

To maximize profits, a firm should continue to increase production of a good until:

Accepted Answer

A) total revenue equals total cost. 
B) profits are zero. 
C) marginal revenue equals marginal cost. 
D) average cost equals average revenue. 
A) total revenue equals total cost. 
B) profits are zero. 
C) marginal revenue equals marginal cost. 
D) average cost equals average revenue.

Question 11

The value of the firm is the:

Accepted Answer

A) current value of profits. 
B) present discounted value of all future profits. 
C) average value of all future profits. 
D) total value of all future profits. 
A) current value of profits. 
B) present discounted value of all future profits. 
C) average value of all future profits. 
D) total value of all future profits.

Question 12

To maximize net benefits in the above table it is most appropriate to use

Accepted Answer

A) four units of the control variable, since the marginal benefit exceeds marginal cost. 
B) six units of the control variable, since the marginal cost exceeds marginal benefit. 
C) five units of the control variable, since net marginal benefits are zero. 
D) none of the statements associated with this question are correct. 
A) four units of the control variable, since the marginal benefit exceeds marginal cost. 
B) six units of the control variable, since the marginal cost exceeds marginal benefit. 
C) five units of the control variable, since net marginal benefits are zero. 
D) none of the statements associated with this question are correct.

Question 13

Marginal benefit refers to:

Accepted Answer

A) the average benefits that arise by using an additional unit of the managerial control variables. 
B) the additional benefits that arise by using an additional unit of the managerial control variables. 
C) the change in average benefits arising from a change in the control variable. 
D) none of the statements associated with this question are correct. 
A) the average benefits that arise by using an additional unit of the managerial control variables. 
B) the additional benefits that arise by using an additional unit of the managerial control variables. 
C) the change in average benefits arising from a change in the control variable. 
D) none of the statements associated with this question are correct.

Question 14

Accounting profits are:

Accepted Answer

A) total revenue minus total cost. 
B) total cost minus total revenue. 
C) marginal revenue minus total cost. 
D) total revenue minus marginal cost. 
A) total revenue minus total cost. 
B) total cost minus total revenue. 
C) marginal revenue minus total cost. 
D) total revenue minus marginal cost.

Question 15

Given the benefit function B(Y) = 200Y - 3Y2, the marginal benefit is:

Accepted Answer

A) 600Y. 
B) 200-3Y. 
C) 200-6Y2. 
D) 200-6Y. 
A) 600Y. 
B) 200-3Y. 
C) 200-6Y2. 
D) 200-6Y.

Question 16

-What is the total cost associated with producing eight units of the control variable, Q (identify point B in the above table)?

Accepted Answer

A) 3,000. 
B) 3,600. 
C) 3,800. 
D) 4,200. 
A) 3,000. 
B) 3,600. 
C) 3,800. 
D) 4,200.

Question 17

Which of the following is not the source of rivalry that exists in economic transactions?

Accepted Answer

A) consumer-producer rivalry. 
B) producer-producer rivalry. 
C) government-producer rivalry. 
D) all of the statements associated with this question are correct. 
A) consumer-producer rivalry. 
B) producer-producer rivalry. 
C) government-producer rivalry. 
D) all of the statements associated with this question are correct.

Question 18

Economics

Accepted Answer

A) exists because of the scarcity. 
B) is not related to decision-making. 
C) is the science for the rich. 
D) has nothing to do with the allocation of resources. 
A) exists because of the scarcity. 
B) is not related to decision-making. 
C) is the science for the rich. 
D) has nothing to do with the allocation of resources.

Question 19

-What is the marginal net benefit associated with producing five units of the control variable, Q (identify point F in the above table)?

Accepted Answer

A) -100. 
B) -75. 
C) 0. 
D) 100. 
A) -100. 
B) -75. 
C) 0. 
D) 100.

Question 20

Marginal benefits are the:

Accepted Answer

A) incremental benefits of a decision. 
B) average benefits of a decision. 
C) total benefits of a decision. 
D) present discounted benefit of a decision. 
A) incremental benefits of a decision. 
B) average benefits of a decision. 
C) total benefits of a decision. 
D) present discounted benefit of a decision.

Marginal net benefits in the above table

Incentive plans imply:

Suppose the growth rate of the firm's profit is 7%, the interest rate is 10%, and the current profits of the firm are 120 million dollars.What is the value of the firm?

Suppose the interest rate is five percent, the expected growth rate of the firm is two percent, and the firm is expected to continue forever.If current profits are $1,000, what is the value of the firm?

-What is the marginal cost of producing the tenth unit?

-Suppose total benefits and total costs are given by B(Y) = 150Y - 10Y² and C(Y) = 5Y².What level of Y will yield the maximum net benefits?

If the annual interest rate is 0%, the present value of receiving $1.10 in the next year is:

Your firm's research department has estimated your total revenues to be

To maximize profits, a firm should continue to increase production of a good until:

The value of the firm is the:

To maximize net benefits in the above table it is most appropriate to use

Marginal benefit refers to:

Accounting profits are:

Given the benefit function B(Y) = 200Y - 3Y2, the marginal benefit is:

-What is the total cost associated with producing eight units of the control variable, Q (identify point B in the above table)?

Which of the following is not the source of rivalry that exists in economic transactions?

Economics

-What is the marginal net benefit associated with producing five units of the control variable, Q (identify point F in the above table)?

Marginal benefits are the:

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 1: The Fundamentals of Managerial Economics

Marginal net benefits in the above table

Incentive plans imply:

Suppose the growth rate of the firm's profit is 7%, the interest rate is 10%, and the current profits of the firm are 120 million dollars.What is the value of the firm?

Suppose the interest rate is five percent, the expected growth rate of the firm is two percent, and the firm is expected to continue forever.If current profits are $1,000, what is the value of the firm?

-What is the marginal cost of producing the tenth unit?

-Suppose total benefits and total costs are given by B(Y) = 150Y - 10Y2 and C(Y) = 5Y2.What level of Y will yield the maximum net benefits?

If the annual interest rate is 0%, the present value of receiving $1.10 in the next year is:

Your firm's research department has estimated your total revenues to be

To maximize profits, a firm should continue to increase production of a good until:

The value of the firm is the:

To maximize net benefits in the above table it is most appropriate to use

Marginal benefit refers to:

Accounting profits are:

Given the benefit function B(Y) = 200Y - 3Y2, the marginal benefit is:

-What is the total cost associated with producing eight units of the control variable, Q (identify point B in the above table)?

Which of the following is not the source of rivalry that exists in economic transactions?

Economics

-What is the marginal net benefit associated with producing five units of the control variable, Q (identify point F in the above table)?

Marginal benefits are the:

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

-Suppose total benefits and total costs are given by B(Y) = 150Y - 10Y² and C(Y) = 5Y².What level of Y will yield the maximum net benefits?