Managerial Econ

Question 1

What is the relationship between economic and accounting profit?

		Economic profit is equal to accounting profit.
		Economic profit is greater than accounting profit.
		Economic profit is less than accounting profit.
		Economic profit may be equal to or less than accounting profit.
		Economic profit may be equal to or greater than accounting profit.

 

 

 

Question 2

Look at the function below.

What is the numerical value of a? Type a number.

 

Question 3

In managerial economics, managers are assumed to maximize:

		current profits.
		their take-home pay.
		their employees’ welfare.
		the value of their firm.
		social welfare.

 

 

Question 4

The market supply curve shows the quantity of a good or service that , holding other possible influences constant.

		households would sell at various prices
		households would buy at various outputs
		firms would sell at various prices
		firms would buy at various prices
		households would buy at various prices

 

 

Question 5

William Howe must decide whether to start a business renting beach umbrellas at an ocean resort during June, July, and August of next summer. He believes he can rent each umbrella to vacationers at $5 a day, and he intends to lease 50 umbrellas for the three- month period for $3,000. To operate this business, he does not have to hire anyone (but himself), and he has no expenses other than the leasing costs and a fee of $3,000 per month to rent the business location. Howe is a college student, and if he did not operate this business, he could earn $4,000 for the three- month period doing construction work.

 

Assume there are 80 days during the summer when beach umbrellas are demanded and Howe rents all 50 of his umbrellas on each of these days. Answer the following questions (Do not use a comma to separate groups of thousands in your answer).

1. What will be his total revenuefor the summer? $

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1. What will be hisaccounting profit for the summer? $

Blank 2

1. What will be his economic profit for the summer?$

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Question 6

In the following figure, there will be an excess supply at any price:

		above Pb.
		below Pb.
		other than Pb.
		below Pa.
		above Pc.

 

 

 

Question 7

Managerial economics uses  to help managers solve problems.

		formal models
		prescribed behavior
		quantitative methods
		microeconomic theory
		all of the above

 

 

 

 

 

Question 8

The market demand curve shows the quantity of a good or service that:

		households would sell at various prices.
		households would buy at various outputs.
		firms would sell at various prices.
		firms would buy at various prices.
		households would buy at various prices.

 

 

 

Question 9

In the accompanying figure, the equilibrium price and quantity are:

		Pa and Qa.
		Pb and Qb.
		Pc and Qc.
		Pa and Qc.
		Pc and Qa.

 

 

 

 

 

Question 10

The price of computers has fallen, while the quantity purchased has remained constant. This implies that the demand for computers has:

		decreased, while the supply of computers has increased.
		increased.
		decreased, while the supply of computers has decreased.
		increased, while the supply of computers has increased.
		become more volatile.

 

 

Question 11

What is the derivative of the following function?

		2x – 3
		2x
		none of the above

 

 

 

Question 12

The economic theory of the firm assumes that the primary objective of a firm’s owner or owners is to:

		behave in a socially conscientious manner.
		maximize the firm’s profit.
		maximize the firm’s total sales.
		maximize the value of the firm.
		All of these are primary objectives.