Question
Question
1
The
economic concept of “opportunity cost” is most closely associated
with which of the following management considerations?
market
structure
resource
scarcity
product
demand
technology
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Question
2
Scarcity
is a condition that exists when
there
is a fixed supply of resources relative to the demand for the product.
there
is a large demand for a product.
resources
are not able to meet the entire demand for a product.
All
of these
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Question
3
A
critical element of entrepreneurship (as opposed to managerial skills) is
leadership
skills.
risk
taking.
technology.
political
skills.
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Question
4
A
large corporation’s profit objective may not be profit or wealth maximization,
because
stockholders
have little power in corporate decision making.
management
is more interested in maximizing its own income.
managers
are overly concerned with their own survival and may not take all prudent
risks.
All
of these
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Question
5
Unlike
an accountant, an economist measures costs on a(n) ________ basis.
explicit
replacement
historical
conservative
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Question
6
A
firm’s “normal profit” is best characterized by the
average
of a firm’s profits over the past five years.
amount
of profit necessary to keep the price of a firm’s stock from changing.
amount
of profit a firm could earn in its next best alternative activity.
the
average amount of profit earned in the firm’s industry.
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Question
7
If
the price of a substitute increases, which of the following is most likely to
happen in the market for the product under consideration in the short run?
Supply
will increase.
Firms
will leave the market.
Firms
will devote more variable inputs in the production of this good.
Firms
will devote less variable inputs in the production of this good.
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points Save Answer
Question
8
Which
of the following best applies to the distinction between the “long
run” and the “short run”?
The
short run is a period of approximately 1-6 months while the long run is any
time frame which is longer.
In
the short run, only new firms may enter, while in the long-run firms may either
enter or exit the market.
The
rationing function of price is a short-run phenomenon whereas the guiding
function is a long-run phenomenon.
All
of these statements are correct.
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points Save Answer
Question
9
A
market is in equilibrium when
supply
is equal to demand.
the
price is adjusting upward.
the
quantity supplied is equal to the quantity demanded.
tastes
and preference remain constant.
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points Save Answer
Question
10
If
government imposes a price ceiling on a good that is below the market
equilibrium price
a
surplus will develop.
a
shortage will develop.
producers
will reduce their sales price.
consumers
will reduce their demand for the good.
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points Save Answer
Question
11
If
an item has several good substitutes, the demand curve for that item is likely
to be
relatively
inelastic.
relatively
elastic.
perfectly
inelastic.
unit
elastic.
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Question
12
If
a firm decreases the price of a good and total revenue decreases, then
the
demand for this good is price elastic.
the
demand for this good is price inelastic.
the
cross elasticity is negative.
the
income elasticity is less than 1.
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points Save Answer
Question
13
When
a regression coefficient is significant at the .05 level, it means that
there
is only a five percent chance that there will be an error in a forecast.
there
is 95 percent chance that the regression coefficient is the true population
coefficient.
there
is a five percent chance or less that the estimated coefficient is zero.
there
is a five percent chance or less that the regression coefficient is not the
true population coefficient.
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Save Answer
Question
14
A
major problem in projecting with a trend line is that
only
straight-line projections can be accommodated.
it
is valid only if the trend is upward.
it
will not forecast turning points in activity.
it
is a very complex method of forecasting.
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points Save Answer
Question
15
When
the R2 of a regression equation is very high, it indicates that
all
the coefficients are statistically significant.
the
intercept term has no economic meaning.
a
high proportion of the variation in the dependent variable can be accounted for
by the variation in the independent variables.
there
is a good chance of serial correlation and so the equation must be discarded.
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points Save Answer
Question
16
When
is it not in the best interest of a company to hire additional workers in the
short run?
when
the average product of labor is decreasing
when
the firm is in Stage II of the production process
when
the marginal revenue product equals zero
when
the wage rate is equal to or greater than labor’s marginal revenue product
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points Save Answer
Question
17
The
production period in which at least one input is fixed in quantity is the
production
run.
long
run.
short
run.
planning
horizon.
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points Save Answer
Question
18
Answer
the questions based on the following information.The marginal product of the
fourth worker is
150
units of output.
24
units of output.
negative.
36
units of output.
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points Save Answer
Question
19
Which
of the following statements best represents a difference between short-run and
long-run cost?
Less
than one year is considered the short run; more than one year the long run.
There
are no fixed costs in the long run.
In
the short-run labor must always be considered the variable input and capital
the fixed input.
All
of these are true.
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points Save Answer
Question
20
Which
level indicates the point of maximum economic efficiency?
lowest
point on AC curve
lowest
point on AVC curve
lowest
point on MC curve
None
of these
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Question
21
When
a firm increased its output by one unit, its AFC decreased. This is an
indication that
the
law of diminishing returns has taken effect.
MC
< AFC.
AVC
< AFC.
the
firm is spreading out its total fixed cost.
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points Save Answer
Question
22
If
an industry could be organized either perfectly competitively or as monopoly, a
monopoly would
produce
less output.
produce
where P > MC.
charge
higher prices.
All
of these
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points Save Answer
Question
23
If
a perfectly competitive firm incurs an economic loss, it should
shut
down immediately.
try
to raise its price.
shut
down in the long run.
shut
down if this loss exceeds fixed cost.
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points Save Answer
Question
24
Monopoly
is characterized by
unique
products.
market
entry and exit are difficult or impossible.
non-price
competition not necessary.
All
of these
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points Save Answer
Question
25
In
perfect competition, if firms enter the market in the long run
total
supply will increase causing market price to increase.
total
supply will decrease causing market price to decrease.
total
supply will decrease causing market price to increase.
total
supply will increase causing market price to decrease.
