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Terms in this set (793)

Question 1
.

2 out of 2 points



Correct

A firm will maximize profits and revenues at the same price when:


Selected Answer:
Correct

the marginal cost is zero.

Answers:
Correct

the marginal cost is zero.




the fixed costs are zero.




the demand for the good is unit elastic.




the demand for the good is unit elastic.




the demand for the good is highly elastic.







.


Question 2
.

2 out of 2 points



Correct

For a parking garage of fixed capacity, the owner sets different parking rates for cars that are parked for less than 24 hours (short-term) and for those that are parked for more than 24 hours (long-term). To maximize revenue, the operator should set prices and target the number of places for each segment such that:


Selected Answer:
Correct

the marginal revenues from the segments are equal.



Answers:
Correct

the marginal revenues from the segments are equal.






the total revenues from each of the segments are equal.






the average revenues from the segments are equal.






the long-term consumers pay a higher hourly price.






the price paid by both short-term and long-term consumers is equal.







.


Question 3
.

2 out of 2 points



Correct

Given that the market share of a firm depends on many unpredictable factors, a firm will use a _____ economic model to estimate the market share for one of its products.


Selected Answer:
Correct

probabilistic

Answers:


deterministic




dynamic




qualitative


Correct

probabilistic




comparative statics







.


Question 4
.

0 out of 3 points



Incorrect

The demand for a product is given by Q = 600 - 30P. At P = $10, the firm sells:


Selected Answer:
Incorrect

100 units.

Answers:


100 units.




150 units.


Correct

300 units.




450 units.




600 units.









.


Question 5
.

0 out of 2 points



Incorrect

The following table shows the total revenue and total cost (in dollars. from different sales volumes of the good.
Table 2-1

Refer to Table 2-1. What is the marginal revenue for the firm from the sale of the 6th unit of the good?


Selected Answer:
Incorrect

$7

Answers:
Correct

$5




$7




$11




$13







.


Question 6
.

2 out of 2 points



Correct

Managerial economics can best be defined as the ____________.


Selected Answer:
Correct

analysis of major management decisions using economic tools.

Answers:


macroeconomics and microeconomics for managers.




study of economic incentives on consumer behavior and demand.




analysis of the labor market through the behavior of workers and managers.


Correct

analysis of major management decisions using economic tools.




study of the strategic interaction between firms in a market.







.


Question 7
.

2 out of 2 points



Correct

If a study examines several different markets at the same time, and compares outcomes with conditions in each market, it is specifically using:


Selected Answer:
Correct

cross-sectional data.

Answers:


time series data.




censored data.




controlled data.




truncated data.


Correct

cross-sectional data.







.


Question 8
.

2 out of 2 points



Correct

During our fall 2018 Economics 4357 class, the total number of possible points to earn is __________.


Selected Answer:
Correct

500.

Answers:


600.


Correct

500.




400.




200.







.


Question 9
.

1 out of 1 points



Correct

Assume that Burger King, a fast food chain, enters into a franchise agreement. The royalty paid to Burger King by the franchisee is calculated as a percentage of the franchisee's revenue. Given that the franchisee faces a downward-sloping demand curve, which of the following is likely to be true?




Selected Answer:
Correct

The franchisee's revenue-maximizing output will be greater than its profit-maximizing output.



Answers:
Correct

The franchisee's revenue-maximizing output will be greater than its profit-maximizing output.






To maximize revenue, Burger King will want the franchisee to produce at the level where total revenue is positive but falling.






The franchisee will produce at the level where the slope of the total revenue curve is zero in order to maximize profits.






The profit-maximizing level of output for the franchisee will be at the level where marginal revenue is less than marginal cost.






To maximize revenue, Burger King will want the franchisee to produce at the level where marginal revenue equals marginal cost.







.


Question 10
.

1 out of 1 points



Correct

Start with the demand function P = 340 - 0.8 Q and the total cost function is C = 120 + 100 Q. Solve for the firm's optimal (profit-maximizing) output (Q = ).


Selected Answer:
Correct

150

Answers:


10




30




70


Correct

150







.


Question 11
.

2 out of 2 points



Correct

Given the following demand curve: Q = 5.0 - 0.04 P, please match the inverse demand curve below.


Selected Answer:
Correct

P = 125 - 25 Q.

Answers:


P = 5.0 - 0.04 Q.




P = 170 - 20 P.




P = 40 - 35 P.


Correct

P = 125 - 25 Q.




P = 200 - 50 Q.







.


Question 12
.

2 out of 2 points



Correct

The demand curve that views Q as a function of Price can also be presented as Price as a function of Quantity. We call this later presentation the ________.


Selected Answer:
Correct

Inverse demand curve.



Answers:


Market demand curve.




Individual demand curve.


Correct

Inverse demand curve.






Marginal profit.




A revenue function of Price and Quantity.







.


Question 13
.

3 out of 3 points



Correct

A firm's demand curve is given by Q = 800 - 2P, where P = price and Q = quantity. Therefore, its inverse demand equation is:


Selected Answer:
Correct

P = 400 - .5Q

Answers:


MR = 800 - 4P




P = 800 - 2Q


Correct

P = 400 - .5Q




P = 800 - .5Q




800 = Q + 2P







.


Question 14
.

2 out of 2 points



Correct

The government is deciding whether it should build a veteran's hospital in an urban area. It will choose to build the hospital only if:


Selected Answer:
Correct

the total benefits from the hospital exceed total costs.

Answers:


the hospital generates positive revenues.




the cost of building the hospital is low.




the profits from the hospital are positive.




the opportunity cost of building the hospital is zero.


Correct

the total benefits from the hospital exceed total costs.







.


Question 15
.

3 out of 3 points



Correct

The initial price for an item is $5.00, and the quantity demanded is 400 units. When the price is raised to $5.25, the quantity demanded falls to 350 units. The absolute value of the point elasticity of demand is _____.


Selected Answer:
Correct

2.7

Answers:


5.25


Correct

2.7




1.5




1.0




0.1







.


Question 16
.

0 out of 3 points



Incorrect

Assume that demand for a service depends upon price and income, where the price elasticity of demand is EP = -0.6 and income elasticity is EY = 1.2. If price falls by 4% and income rises by 2%, the quantity demanded of the service will _____.


Selected Answer:
Incorrect

increase by 6%

Answers:


not be affected as the change in price will cancel the change in income




increase by 6%


Correct

increase by 4.8%




decrease by 9.6%




decrease by 2.4%







.


Question 17
.

2 out of 2 points



Correct

A time-series model attempts to identify:


Selected Answer:
Correct

patterns of changes in a single variable over time.

Answers:
Correct

patterns of changes in a single variable over time.




possible links between a dependent variable and a single independent variable over time.




possible links between a dependent variable and one or more independent variables over time.




the key factors that help predict future economic events.




patterns of forecast errors over time.







.


Question 18
.

3 out of 3 points



Correct

In contrast to simple regression, multiple regression considers:


Selected Answer:
Correct

several independent variables rather than one.

Answers:


several dependent variables rather than one.


Correct

several independent variables rather than one.




more than one dependent and independent variable.




multiple equation specifications in order to find the best statistical fit.




both times-series data and cross-section data.







.


Question 19
.

2 out of 2 points



Correct

A good that has highly elastic demand is most likely to:


Selected Answer:
Correct

have a large number of substitutes.

Answers:
Correct

have a large number of substitutes.




be purchased by low-income consumers.




be sold at a low price level.




be produced by a single firm.




be a necessary good.







.


Question 20
.

0 out of 3 points



Incorrect

The demand for a product is given by P = 1,750 - 25Q. If the firm wishes to sell 66 units, each unit should be priced at:


Selected Answer:
Incorrect

$400.

Answers:
Correct

$100.




$200,




$300.




$400.




$500.







.


Question 21
.

1 out of 1 points



Correct

Start with the demand function P = 340 - 0.8 Q and the total cost function is C = 120 + 100 Q. Find the profit function.


Selected Answer:
Correct

-120 + 240 Q -0.8 Q2


Answers:


240 -0.8Q -120/Q




220- 99.2 Q


Correct

-120 + 240 Q -0.8 Q2





240 -0.8Q -120 Q2








.


Question 22
.

2 out of 2 points



Correct

Given that digital music players are used to play music downloaded from the Internet, a fall in the price of digital music players will lead to:


Selected Answer:
Correct

an increase in the demand for downloaded songs.

Answers:


an increase in the price of a song download.


Correct

an increase in the demand for downloaded songs.




an increase in the price of broadband plans




a fall in the demand for digital music players.




an increase in the price of personal laptops.







.


Question 23
.

2 out of 2 points



Correct

For a downward-sloping demand curve, the associated marginal revenue curve:


Selected Answer:
Correct

has twice the slope as the demand curve.



Answers:


coincides with the demand curve.






lies below and is parallel to the demand curve.




is positive for all levels of sales.




Correct

has twice the slope as the demand curve.






is parallel to the quantity axis.







.


Question 24
.

0 out of 2 points



Incorrect

A product's point price elasticity has been estimated at -1.8 (or 1.8 in absolute value). At the initial price of $20, the quantity demanded was 100 units. If the firm increases the price to $22, quantity demanded and sold is expected to decrease by _________.


Selected Answer:
Incorrect

15%

Answers:
Correct

18%




15%




10%




5%




0







.


Question 25
.

3 out of 3 points



Correct

If the price of a good or service decreases, what happens to the firm's demand curve?


Selected Answer:
Correct

There is a downward movement along the demand curve.

Answers:


The demand curve shifts inward toward the origin.




The demand curve shifts outward away from the origin.




There is an upward movement along the demand curve.


Correct

There is a downward movement along the demand curve.




The slope of the demand curve changes.







.


Question 26
.

3 out of 3 points



Correct

When Amy was a student, she consumed beer with her dinner. Over the years, as her income increased, she substituted beer for a glass of wine. From this information, one can imply that:


Selected Answer:
Correct

Amy considers beer an inferior good.

Answers:


the law of demand does not hold for beer.




wine and beer are complementary goods.


Correct

Amy considers beer an inferior good.




the price elasticity of demand for beer is high.




Amy gets more utility from beer than from wine.







.


Question 27
.

3 out of 3 points



Correct

A firm's demand equation is given by: Q = 60 - 60P + 2Y, where Q is quantity, P is price, and Y is income. If price increases by $2 and income increases by $80, then quantity demanded will:


Selected Answer:
Correct

increase by 40 units.

Answers:


increase by 160 units.




increase by 80 units.




decrease by 120 units.


Correct

increase by 40 units.




decrease by 60 units.







.


Question 28
.

2 out of 2 points



Correct

Is it always worthwhile gathering more information about customer needs and preferences?


Selected Answer:
Correct

No, the value of additional information must be compared to its additional cost.

Answers:


Yes, the cost of gathering information is always negligible.




Yes, provided that this information is relevant to the firm's decisions.




No, a good rule of thumb is not to spend on information more than 2% of what is at stake in the decision.


Correct

No, the value of additional information must be compared to its additional cost.




Yes, gathering more information enables the firm to forecast demand more accurately.







.


Question 29
.

2 out of 2 points



Correct

Managerial economics can best be defined as the:


Selected Answer:
Correct

analysis of major management decisions using economic tools.

Answers:


macroeconomics and microeconomics for managers.




study of economic incentives on consumer behavior and demand.




analysis of the labor market through the behavior of workers and managers.


Correct

analysis of major management decisions using economic tools.




study of the strategic interaction between firms in a market.









.


Question 30
.

0 out of 2 points



Incorrect





Assume that demand for a service depends upon price and income, where the price elasticity of demand is Ep = -0.8 and income elasticity is Ey = 1.5. If price falls by 4% and income rises by 2%, the quantity demanded of the service will _____.


Selected Answer:
Incorrect

increase by 4.8%

Answers:


decline by 6.2%




not be a change in quantity demanded.




increase by 2.0%




increase by 4.8%


Correct

increase by 6.2%







.


Question 31
.

2 out of 2 points



Correct

Which of the following correctly defines marginal cost?


Selected Answer:
Correct

Marginal cost is the additional cost of producing an extra unit of output.

Answers:


Marginal cost is the addition made to fixed cost when an extra unit is produced.


Correct

Marginal cost is the additional cost of producing an extra unit of output.




Marginal cost is the additional cost of increasing the scale of production in the long run.




Marginal cost is the difference between price and marginal revenue for the last unit sold.




Marginal cost is the same as the firm's variable cost at all levels of output.







.


Question 32
.

3 out of 3 points



Correct

A firm's demand equation is given by: Q = 60 - 60P + 2Y, where Q is quantity, P is price, and Y is income. If price increases by $2 and income increases by $80, then quantity demanded will:


Selected Answer:
Correct

increase by 40 units.

Answers:


increase by 160 units.




increase by 100 units.




decrease by 120 units.


Correct

increase by 40 units.




decrease by 60 units.







.


Question 33
.

3 out of 3 points



Correct

According to the law of demand, if a firm reduces the price of its good:


Selected Answer:
Correct

consumers in the market will want more units of the good at the lower price.

Answers:
Correct

consumers in the market will want more units of the good at the lower price.




some consumers will exit the market.




consumers will demand fewer units than before the price cut.




the quantity of goods produced and sold by the firm will decline.




competing firms will reduce prices.









.


Question 34
.

2 out of 2 points



Correct

When a firm practices price discrimination in two market segments, the firm:




Selected Answer:
Correct

must be able to identify market segments that have different price elasticities.

Answers:


sets price according to the different costs of serving different market segments.




sets price according to the different costs of serving different market segments.




must be selling a heterogeneous product.




will typically charge higher prices in the larger market segment.


Correct

must be able to identify market segments that have different price elasticities.







.


Question 35
.

0 out of 3 points



Incorrect

A firm's total revenue function is given by R = 100 + 100Q - 2Q2. At Q = 20, which of the following is true?


Selected Answer:
Incorrect

The firm's marginal revenue is $80.

Answers:


The firm's marginal revenue is $80.




The firm's marginal revenue is constant.




The firm's average revenue is $50.




The firm's total revenue is $500.


Correct

The firm's marginal revenue is $20.







.


Question 36
.

0 out of 2 points



Incorrect

The following table shows the total revenue and total cost (in dollars. from different sales volumes of the good.
Table 2-1

Refer to Table 2-1. What is the marginal revenue for the firm from the sale of the 3rd unit of the good?


Selected Answer:
Incorrect

$9

Answers:


$13


Correct

$11




$9




$7







.


Question 37
.

2 out of 2 points



Correct

A regression analysis is said to suffer from multicollinearity when:


Selected Answer:
Correct

two or more explanatory variables tend to move together.

Answers:


the dependent and independent variables move in the same direction.


Correct

two or more explanatory variables tend to move together.




the degrees of freedom in the regression is equal to zero.




the explanatory variables vary independently of one another.




the correlation coefficient between the predicted and the explanatory variables is equal to zero.







.


Question 38
.

2 out of 2 points



Correct

A product's point price elasticity has been estimated at -1.5. At the initial price of $20, the quantity demanded was 10 units. If the firm cuts the price to $17.50, quantity demanded and sold is expected to increase by _____.


Selected Answer:
Correct

20.0%

Answers:
Correct

20.0%




12.67%




8.75%




5.33%




1.5%







.


Question 39
.

3 out of 3 points



Correct

If the demand for a good is price-elastic, a decrease in price will:


Selected Answer:
Correct

lead to an increase in quantity demanded and an increase in the firm's revenue.

Answers:
Correct

lead to an increase in quantity demanded and an increase in the firm's revenue.




not affect the total revenue of the firm.




lead to a fall in the firm's revenue but an increase in quantity demanded.




lead to a decrease in quantity demanded.




decrease the firm's revenue by the same percentage as the cut in price.







.


Question 40
.

0 out of 2 points



Incorrect

The following table shows the total revenue and total cost (in dollars. from different sales volumes of the good.
Table 2-1

Refer to Table 2-1. What is the marginal cost for the firm from the sale of the 3rd unit of the good?


Selected Answer:
Incorrect

$4

Answers:


$4


Correct

$5




$6




$7







.


Question 41
.

0 out of 2 points



Incorrect

The following table shows the total revenue and total cost (in dollars. from different sales volumes of the good.
Table 2-1

Refer to Table 2-1. What is the marginal cost for the firm from the sale of the 6th unit of the good?


Selected Answer:
Incorrect

$6

Answers:
Correct

$8




$7




$6




$5







.


Question 42
.

0 out of 2 points



Incorrect

If the sample variance of a set of observations is 225, its sample standard deviation is equal to _____.


Selected Answer:
Incorrect

0.225

Answers:


0.225


Correct

15




22.5




0.15




2.25







.


Question 43
.

2 out of 2 points



Correct

Which of the following can be used to correct for seasonality in time-series modeling?


Selected Answer:
Correct

Dummy variables

Answers:


Error terms




Binomial coefficients


Correct

Dummy variables




Stochastic constants




Confidence intervals







.


Question 44
.

2 out of 2 points



Correct

In evaluating public programs, benefit-cost analysis:


Selected Answer:
Correct

states that a program should be undertaken only if total benefits exceed total costs.

Answers:


takes into account only the benefits that society gains from public programs.




states that a program should be undertaken only if it generates revenue.


Correct

states that a program should be undertaken only if total benefits exceed total costs.




takes into account only the direct costs of the program.




states that a program should be undertaken only if there are no indirect costs.







.


Question 45
.

2 out of 2 points



Correct

A regression coefficient measures:


Selected Answer:
Correct

the change in the dependent variable due to a unit change in a particular independent variable.

Answers:
Correct

the change in the dependent variable due to a unit change in a particular independent variable.




the correlation between the dependent and independent variables.




the correlation between the explanatory variables.




the intercept of the regression line.




the value of the predicted variable when the explanatory variables remain unchanged.