UCumberlands Multiple Choice Questions For Managerial Finance

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timer Asked: Mar 29th, 2019
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I have attached exam-1 which have 40 multiple choice question. Its randomly selected answer for few question. So Please select correct answers for all 40 questions. I also attached book if you want to read.

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Quick Links Logout Sapankumar Jayeshbhai Patel HomeCourses Tab 2 of 2 (active tab) 1. • • • • • • • • • • • • • • • • • 2019_SPR_IIG_Managerial Economics_20 2. Content 3. Week 4 4. Take Test: Exam I 2019_SPR_IIG_Managerial Economics_20 Home Page Information My Instructor Discussions Content Communicate Tools Help Course Messages My Grades Calendar Library Resources Netiquette • Groups Take Test: Exam I Test Information Description Instructions Multiple Attempts Not allowed. This test can only be taken once. Force Completion This test can be saved and resumed later. Question Completion Status: QUESTION 1 1. Which of the following describe the impact of taxes? A. Impede the movement of assets to higher value uses B. Reduce incentives to work C. Decrease the number of wealth-creating transactions D. All of the above 2 points QUESTION 2 1. A consumer values a car at $20,000, and it costs the manufacturer $15,000 to make the car. If the transaction is completed at $18,000, the transaction will generate: A. consumer surplus equal to $2,000 and producer surplus equal to $3,000 B. We need more information to answer this question C. total surplus equal to $5,000, but we do not know how this amount is allocated to the buyer and seller D. consumer surplus equal to $3,000 and producer surplus equal to $2,000 3 points QUESTION 3 1. A price floor imposed above the equilibrium market price leads to A. Higher quantity demanded than quantity supplied B. We need more information to answer this question C. No impact on the market equilibrium D. Higher quantity supplied than quantity demanded 2 points QUESTION 4 1. Suppose I value your business at $580,000, you value your business at $550,000, and I must pay an attorney $40,000 to complete the required documents for the county government. What is the outcome from the potential transaction? A. The transaction does not occur because the transaction costs exceed the value created B. The business is sold for $565,000 C. You buy the business from me at a price between $580,000 and $550,000 D. I buy the business from you at a price between $580,000 and $550,000 3 points QUESTION 5 1. Opportunity costs arise due to A. lack of alternatives B. scarcity of resources C. abundance of resources D. limited wants 3 points QUESTION 6 1. Suppose you are enrolled in an MBA program and your parents ask you how much the education will cost. Your reply includes the tuition charges and book expenses, but you do not include the opportunity cost of your time. Have you fallen into a logical trap? A. Yes, the hidden-cost fallacy B. No, the information is correct C. Yes, you have violated the Law of Demand D. Yes, the sunk-cost fallacy 2 points QUESTION 7 1. You advertise a used car for sale on a local electronic bulletin board. The best offer you receive is $4,000, but you decline because you paid $6,000 for the car five years ago. Have you fallen into a logical trap? A. Yes, hidden-cost fallacy B. Yes, you are violating the first principle of economic profits C. No, it is your car and you can do what you want D. Yes, sunk-cost fallacy 3 points QUESTION 8 1. When are accounting profits equal to economic profits? A. Explicit costs are zero B. Accounting profits are zero C. Implicit costs equal zero D. Implicit costs are positive 2 points QUESTION 9 1. Your restaurant sells 300 pizzas in the typical day, and the total costs are $3,000 per day. If your fixed costs are $1,200 per day, what is average variable cost? A. $6 B. $4 C. $10 D. $8 2 points QUESTION 10 1. Which of the following statements is NOT true? A. Accounting profit can be equal to economic profit B. Accounting profit can be more than economic profit C. Accounting profit can be positive while economic profit may be negative D. Economic profit can be more than accounting profit 3 points QUESTION 11 1. Your pizza restaurant increases output by 5 pizzas per hour. Total variable costs and total costs increase by $10 per hour. What is the change in marginal cost for the restaurant? A. We do not have enough information to answer this question B. MC increases by $10 per pizza C. MC does not change D. MC increases by $2 per pizza 2 points QUESTION 12 1. If average cost is rising as output increases, then we know that A. Average total cost is less than average fixed cost B. MC > AC C. MC < 0 D. MC < AC 3 points QUESTION 13 1. Your local pizza restaurant sells each pizza for $12, and their marginal cost per pizza is $10. The restaurant could increase profits by A. Holding sales at the current level because profits are already maximized B. Selling less pizza C. Selling more pizza D. Closing the business 3 points QUESTION 14 1. How do fixed costs influence business decisions? A. They influence "should I stay in business" decision but not extent decisions B. They do not matter at all C. They influence "should I stay in business" decisions as well as extent decisions D. They only affect accounting profits but not economic profits 2 points QUESTION 15 1. If MC > MR, then we have A. Negative marginal profits B. Zero economic profits C. Negative marginal revenue D. An incentive to increase output 3 points QUESTION 16 1. Which of the following statements is NOT true? A. Average fixed costs is constant as output increases if total fixed costs equal zero B. Total costs increase as output increases C. Average fixed costs can be constant as output increases if total fixed costs are positive D. Average fixed costs always decline as output increases if total fixed costs are positive 2 points QUESTION 17 1. At the break-even quantity, we know that A. the firm's profits are maximized B. the firm's costs are minimized C. the firm has zero economic profit D. the firm is covering all of variable costs but only some of the fixed costs 3 points QUESTION 18 1. If the price received by a producer is less than average total cost but greater than average variable cost in the short run, then the firm A. should shut down immediately B. should continue to produce C. is earning zero economic profits D. is earning positive economic profits 2 points QUESTION 19 1. Which discount rate represents the firm's opportunity cost of capital for a net present value analysis? A. Prime interest rate B. Weighted average cost of capital (WACC) C. Treasury rate on 10 year bonds D. Fed funds rate 2 points QUESTION 20 1. A coffee house earns zero economic profits on its tall latte, which sells for $5 per serving and has average variable cost equal to $3.00. What is the average total cost? A. $2 per serving B. $3 per serving C. $4 per serving D. $5 per serving 3 points QUESTION 21 1. An AI startup firm has fixed costs of $5 million and will produce an app that retails for $5 and has marginal costs equal to $1 per download. What is the break-even quantity for this firm? A. Q = 1 million units B. Q = 1.25 units C. P = $1.25 D. Q = 1.25 million units 3 points QUESTION 22 1. Suppose we invest in a new stock market information service that is sold by subscription to stock market participants. Our investment will generate a stream of income from the subscription revenues collected in future years. What happens to the net present value (NPV) of this investment if the discount rate increases? A. NPV declines B. NPV is unchanged C. We do not have enough information to answer this question D. NPV increases 2 points QUESTION 23 1. Which of the following will decrease the break-even quantity? A. an increase in marginal costs B. an increase in the price level C. an increase in fixed costs D. a decrease in the price level 3 points QUESTION 24 1. The cross-price elasticity of demand for tea with respect to the price of scones is 0.2. What do we know about the economic relationship between these goods? A. Complements B. Substitutes C. Tea and scones are independent goods with no cross-price relationshp D. Both are normal goods 2 points QUESTION 25 1. The income elasticity of demand for pizza is 0.5 for US consumers as a group. Which of the following statements is NOT true? A. Pizza is a necessity for most US consumers B. Pizza is a luxury good C. Pizza consumption is expected to increase as US consumer incomes rise D. Most US consumers view pizza as a normal good 2 points QUESTION 26 1. The short-run price elasticity of demand for gasoline in the US is roughly equal to -0.25, which tells us that A. the short-run demand for gasoline is elastic B. the short-run demand for gasoline is inelastic C. gasoline is an inferior good in the US D. gasoline consumers are completely unresponsive to price changes 3 points QUESTION 27 1. A new entrant has appeared in your market. What is the expected impact on the elasticity of demand for your product? A. We do not have enough information to answer this question B. Entrants do not impact demand elasticities C. Demand becomes more inelastic D. Demand becomes more elastic 3 points QUESTION 28 1. Which is more elastic? A. Demand for all coffee drinks B. Demand for espresso-based coffee drinks 2 points QUESTION 29 1. The price elasticity of demand for online book buyers is -0.4 for Barnes and Noble customers and -1.2 for Amazon customers. Based on this information, which firm can increase online book revenue by increasing book prices? A. Both firms B. Amazon C. Neither firm D. Barnes and Noble 3 points QUESTION 30 1. The short-run price elasticity of demand for gasoline in the US retail market is -0.25. Which of the following values would be a reasonable value for the long-run price elasticity of demand in this market? A. -0.85 B. -0.15 2 points QUESTION 31 1. The less-than-load (LTL) freight business in the US has constant or flat average costs across all quantity levels. What does this imply about the scale economies in this industry? A. Business has diseconomies of scale B. Business has economies of scale C. Business has economies of scope but not economies of scale D. Business has neither economies of scale or diseconomies of scale 2 points QUESTION 32 1. If marginal costs are less than average costs, we know that A. Average costs are increasing B. Average costs are sunk C. Average costs are negative D. Average costs are declining 3 points QUESTION 33 1. A U-shaped average cost curve exhibits A. Both economies of scale and diseconomies of scale B. Only economies of scale C. Only diseconomies of scale D. We do not have enough information to answer this question 2 points QUESTION 34 1. If a firm has an average cost curve that is downward sloping at all relevant quantities, then we know that A. the firm enjoys positive economic profits B. the firm should exit the business and shut down C. the firm's incentive is to increase output D. the firm has diseconomies of scale 3 points QUESTION 35 1. A firm that can enjoy economies of scope has an incentive to A. shut down B. increase output of its main product as fast as possible C. diversify its product line D. focus on making one product 2 points QUESTION 36 1. An effective advertising campaign for Edy's brand ice cream should: A. shift the supply curve for Edy's ice cream to the left B. shift the demand curve for Edy's ice cream to the right C. shift the supply curve for Edy's ice cream to the right D. shift the demand curve for Edy's ice cream to the left 3 points QUESTION 37 1. Suppose a profit-maximizing monopoly seller adopts new production technology that reduces their marginal cost of production. What is the firm's optimal response to this change? A. Reduce the product price B. Do not change the product price C. We do not have enough information to answer this question D. Increase the product price 3 points QUESTION 38 1. Your firm manufactures doors for the US home construction industry. A new federal regulation imposes strict environmental protection rules on how these doors can be painted in order to reduce chemical emissions into the air. As a result, the fixed costs of production increase sharply (MC does not change), and several competing firms exit the business. What is your optimal response to the regulation change? A. Demand becomes more elastic, so the firm can decrease prices B. The firm should not respond because changes in fixed costs do not affect firm decisions C. Demand becomes more inelastic, so the firm can increase prices D. Demand becomes more inelastic, so the firm can decrease prices 3 points QUESTION 39 1. Suppose you invest $100 today in bonds that have an annual discount rate equal to -2% per year. At this time next year, your investment will be worth: A. $98 B. $100 C. $102 D. $104 2 points QUESTION 40 1. Suppose the market demand curve shifts rightward and the market price remains the same. What happens to consumer surplus in this market? A. We do not have enough information to answer this question B. Increases C. Does not change D. Decreases 2 points Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save and Submit Froeb McCann Shor Wa r d fif th e ditio n Managerial Economics A PROBLEM SOLVING APPROACH Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Fit your coursework into your hectic life. Make the most of your time by learning your way. Access the resources you need to succeed wherever, whenever. Study with digital flashcards, listen to audio textbooks, and take quizzes. Review your current course grade and compare your progress with your peers. Get the free MindTap Mobile App and learn wherever you are. Break Limitations. Create your own potential, and be unstoppable with MindTap. MINDTAP. POWERED BY YOU. cengage.com/mindtap Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 fifth edition Managerial Economics A PRO B LEM SOLV ING A P P RO ACH Luke M. Froeb Vanderbilt University Mikhael Shor University of Connecticut Brian T. McCann Vanderbilt University Michael R. Ward University of Texas, Arlington Australia • Brazil • Mexico • Singapore • United Kingdom • United States Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Managerial Economics, Fifth Edition © 2018, 2016 Cengage Learning® Luke M. Froeb, Brian T. McCann, Mikhael Shor, Michael R. Ward Unless otherwise noted, all content is © Cengage Senior Vice President: Erin Joyner copyright herein may be reproduced or distributed in any form Product Director: Jason Fremder ALL RIGHTS RESERVED. No part of this work covered by the or by any means, except as permitted by U.S. copyright law, without the prior written permission of the copyright owner. Product Manager: Christopher Rader Content Developer: Molly Umbarger Product Assistant: Denisse Zavala-Rosales Marketing Manager: John Carey Manufacturing Planner: Kevin Kluck For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Sr. Art Director: Michelle Kunkler Cover Image: Kamira/Shutterstock Library of Congress Control Number: 2017947785 Intellectual Property Analyst: Jennifer Bowes ISBN: 978-1-337-10666-5 Project Manager: Carly Belcher Art and Cover Direction, Production Management, and Composition: Lumina Datamatics, Inc Cengage Learning 20 Channel Center Street Boston, MA 02210 USA Cengage Learning is a leading provider of customized l­earning solutions with employees residing in nearly 40 different ­countries and sales in more than 125 countries around the world. Find your local representative at www.cengage.com. Cengage Learning products are represented in Canada by Nelson Education, Ltd. To learn more about Cengage Learning Solutions, visit www.cengage.com Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com Printed in the United States of America Print Number: 01 Print Year: 2017 Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 In loving memory of Lisa, and for our families: Donna, David, Jake, Halley, Scott, Chris, Leslie, Jacob, Eliana, Cindy, Alex, and Chris Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 BRIEF CONTENTS Preface: Teaching Students to Solve Problems SECTION I Problem Solving and Decision Making 1   1 Introduction: What This Book Is About 3   2 The One Lesson of Business 15   3 Benefits, Costs, and Decisions 25   4 Extent (How Much) Decisions 37   5 Investment Decisions: Look Ahead and Reason Back SECTION II Pricing, Costs, and Profits xiii 49 65   6 Simple Pricing 67   7 Economies of Scale and Scope 83   8 Understanding Markets and Industry Changes 95   9 Market Structure and Long-Run Equilibrium 113 10 Strategy: The Quest to Keep Profit from Eroding 125 11 Foreign Exchange, Trade, and Bubbles 137 SECTION III Pricing for Greater Profit 151 12 13 14 SECTION IV Strategic Decision Making 183 15 16 SECTION V More Realistic and Complex Pricing 153 Direct Price Discrimination 163 Indirect Price Discrimination 171 Strategic Games 185 Bargaining 205 Uncertainty 215 17 18 19 20 Making Decisions with Uncertainty 217 Auctions 233 The Problem of Adverse Selection 243 The Problem of Moral Hazard 255 v Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 vi BRIEF CONTENTS SECTION VI Organizational Design 21 22 23 SECTION VII Getting Employees to Work in the Firm’s Best Interests 269 Getting Divisions to Work in the Firm’s Best Interests 283 Managing Vertical Relationships 295 Wrapping Up 24 267 Test Yourself 307 309 Epilogue: Can Those Who Teach, Do? Glossary Index 315 317 325 Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 CONTENTS Preface: Teaching Students to Solve Problems SECTION I Problem Solving and Decision Making CHAPTER 1 Introduction: What This Book Is About  3 1.1 Using Economics to Solve Problems 1.2 Problem-Solving Principles 4 1.3 Test Yourself 6 1.4 Ethics and Economics 7 1.5 Economics in Job Interviews 9 Summary & Homework Problems 11 End Notes 13 CHAPTER 2 xiii 1 3 The One Lesson of Business  15 2.1 Capitalism and Wealth 16 2.2 Does the Government Create Wealth? 17 2.3 How Economics Is Useful to Business 18 2.4 Wealth Creation in Organizations 21 Summary & Homework Problems 21 End Notes 23 CHAPTER 3 Benefits, Costs, and Decisions 25 3.1 Background: Variable, Fixed, and Total Costs 26 3.2 Background: Accounting versus Economic Profit 27 3.3 Costs Are What You Give Up 29 3.4 Sunk-Cost Fallacy 30 3.5 Hidden-Cost Fallacy 32 3.6 A Final Warning 32 Summary & Homework Problems 33 End Notes 36 CHAPTER 4 Extent (How Much) Decisions 37 4.1 Fixed Costs Are Irrelevant to an Extent Decision 4.2 Marginal Analysis 39 4.3 Deciding between Two Alternatives 40 38 vii Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 viii CONTENTS 4.4 Incentive Pay 43 4.5 Tie Pay to Performance Measures That Reflect Effort 4.6 Is Incentive Pay Unfair? 45 Summary & Homework Problems 46 End Notes 48 CHAPTER 5 Investment Decisions: Look Ahead and Reason Back 49 5.1 Compoundi ...
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2019_SPR_IIG_Managerial Economics_20

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Week 4

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Take Test: Exam I

2019_SPR_IIG_Managerial Economics_20
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Take Test: Exam I
Test Information
Description
Instructions
Multiple Attempts Not allowed. This test can only be taken once.
Force Completion This test can be saved and resumed later.
Question Completion Status:

QU ESTION 1
1.

Which of the following describe the impact of taxes?
A. Impede the movement of assets to higher value uses
B. Reduce incentives to work
C. Decrease the number of wealth-creating transactions
D. All of the above
2 points

QU ESTION 2
1.

A consumer values a car at $20,000, and it costs the manufacturer $15,000 to make the car. If the transaction is
completed at $18,000, the transaction will generate:
A. consumer surplus equal to $2,000 and producer surplus equal to $3,000
B. We need more information to answer this question
C. total surplus equal to $5,000, but we do not know how this amount is allocated to the buyer and seller
D. consumer surplus equal to $3,000 and producer surplus equal to $2,000
3 points

QU ESTION 3
1.

A price floor imposed above the equilibrium market price leads to
A. Higher quantity demanded than quantity supplied
B. We need more information to answer this question
C. No impact on the market equilibrium
D. Higher quantity supplied than quantity demanded
2 points

QU ESTION 4
1.

Suppose I value your business at $580,000, you value your business at $550,000, and I must pay an attorney
$40,000 to complete the required documents for the county government. What is the outcome from the
potential transaction?
A. The transaction does not occur because the transaction costs exceed the value created

B. The business is sold for $565,000
C. You buy the business from me at a price between $580,000 and $550,000
D. I buy the business from you at a price between $580,000 and $550,000
3 points

QU ESTION 5
1.

Opportunity costs arise due to
A. lack of alternatives
B. scarcity of resources
C. abundance of resources
D. limited wants
3 points

QU ESTION 6
1.

Suppose you are enrolled in an MBA program and your parents ask you how much the education will cost. Your
reply includes the tuition charges and book expenses, but you do not include the opportunity cost of your
...

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awesome work thanks

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