ECON 528 EXAM QUESTIONS WITH CORRECT ANSWERS

ECON 528 EXAM QUESTIONS WITH
CORRECT ANSWERS

Managerial |economics |is |best |defined |as |the |economic |study |of: |- |CORRECT |ANSWER✔✔-how
|businesses |can |decide |on |the |best |use |of |scarce |resources.




Managerial |economics: |- |CORRECT |ANSWER✔✔-helps |managers |make |decisions |in |the |face |of |
scarcity.



Microeconomics |includes |the |study |of |the; |- |CORRECT |ANSWER✔✔-b. |choices |made |by |
individuals |and |businesses.



The |form |of |economics |most |relevant |to |managerial |decision-making |within |the |firm |is: |- |
CORRECT |ANSWER✔✔-b. |microeconomics



CEOs |should |focus |on |- |CORRECT |ANSWER✔✔-b. |maximizing |firm |profits.



Managerial |economics |generally |refers |to |the |integration |of |economic |theory |with |business |- |
CORRECT |ANSWER✔✔-Practice



A |managerial |decision |is |not |profitable |if |- |CORRECT |ANSWER✔✔-b. |it |increases |costs |more |
than |revenue



According |to |the |profit-maximization |goal, |the |firm |should |attempt |to |maximize |short-run |
profits |since |there |is |too |much |uncertainty |associated |with |long-run |profits. |- |CORRECT |
ANSWER✔✔-False

, 1) |Microeconomics |studies |the |allocation |of |- |CORRECT |ANSWER✔✔-B) |scarce |resources.



2) |Managerial |economics |- |CORRECT |ANSWER✔✔-C) |helps |managers |make |decisions |in |the |
face |of |scarcity.



4) |Microeconomic |models |are |used |to |- |CORRECT |ANSWER✔✔-A) |make |predictions.

B) |explain |real-life |phenomena.

C) |evaluate |production |alternatives.

D) |All |of |the |above.

Answer: |D



5) |Managerial |Economics |as |a |specialized |branch |of |Economics |- |CORRECT |ANSWER✔✔-b. |
Provide |logic |and |methodology |to |find |solutions |to |business |problems



1) |Unlike |an |accountant, |an |economist |measures |costs |on |a(n) |________ |basis. |- |CORRECT |
ANSWER✔✔-replacement



10) |When |an |economist |uses |the |term |"cost" |referring |to |a |firm, |the |economist |refers |to |the |- |
CORRECT |ANSWER✔✔-d. |opportunity |cost |of |producing |a |good |or |service, |which |includes |
both |implicit |and |explicit |cost.



2) |Accounting |costs |- |CORRECT |ANSWER✔✔-a. |are |historical |costs.



3) |A |firm |earns |a |normal |profit |when |its |total |revenues |just |offset |both |the |________ |cost |and
|________ |cost. |- |CORRECT |ANSWER✔✔-a. |accounting; |opportunity




5) |If |Melissa |owns |a |software |company |that |incurs |no |fixed |costs, |then |- |CORRECT |
ANSWER✔✔-d. |her |total |cost |equals |her |total |variable |cost.