TEST BANK FOR Managerial Economics, 9th Edition William F. Samuelson, Stephen G. Marks, Jay L. Zagorsky Chapter 1-18

TEST BANK FOR
b b


ManagerialbEconomics,b9thbEditionbWilliambF.bSamuelson,bStephenbG.bMarks,bJaybL.bZagorsky
Chapterb1-18

File:bCh01;bCHAPTERb1:bIntroductionbtobEconomicbDecisionbMakingb

MULTIPLEbCHOICE

1. bManagerialbeconomicsbcanbbestbbebdefinedbasbthe:
a) macroeconomicsbandbmicroeconomicsbforbmanagers.
b) studybofbeconomicbincentivesbonbconsumerbbehaviorbandbdemand.
c) analysisbofbtheblaborbmarketbthroughbthebbehaviorbofbworkersbandbmanagers.
d) analysisbofbmajorbmanagementbdecisionsbusingbeconomicbtools.
e) studybofbthebstrategicbinteractionbbetweenbfirmsbinbabmarket.

ANSWER:bd
SECTIONbREFERENCE:bIntroductionbDI
FFICULTYbLEVEL:bEasy



2. Whichbofbthebfollowingbisbnotbonebofbthebstepsbinbmanagerialbdecisionbmaking?
a) Predictingbthebconsequencesbofbabdecision.
b) Exploringbthebalternativesbtobthebdecision.
c) Definingbthebproblembandbthebobjectivesbofbthebdecision.
d) Negotiatingbabconsensusbtobimplementbthebdecision.
e) Performingbsensitivitybanalysis.

ANSWER:bd
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bEasy



3. Profitbmaximizationbisbanbambiguousbguidebtobdecisionbmakingbinbthebprivatebsectorbbecause:
a) firmsbinbthebprivatebsectorbusuallybdobnotbaimbatbprofitbmaximization.
b) thebgoalbofbprofitbmaximizationbcontradictsbthebgoalbofbsatisfyingbthebfirm‘sbshareholders.
c) ofbthebpresencebofbriskbandbuncertainty.
d) profit-maximizationbignoresbsocialbcostsbandbbenefits.
e) Nonebofbthebabovebanswersbisbcorrect.

ANSWER:bc
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bEasy




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,4. Whichbofbthebfollowingbisbtruebofbeconomicbmodels?
a) Modelsbarebtoobtheoreticalbtobbebapplicablebinbrealbworldbdecisions.
b) Modelsbarebnotbusefulbbecausebuncertaintybpreventsbaccuratebforecasts.
c) Modelsbarebsimplifiedbdescriptionsbofbprocesses,brelationships,borbotherbphenomena.
d) Modelsbdescribebrealbworldbsituationsbinbcompletebdetail.
e) Modelsbarebnotbusefulbbecausebtheybdobnotbtakebintobaccountbcomplicatingbandblessbi
mportantbfeaturesbofbabproblem.

ANSWER:bc
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bMedium



5. Whichbofbthebfollowingbcorrectlybdescribesbabdeterministicbeconomicbmodel?
a) Abdeterministicbmodelbisbabmodelbforbwhichbtheboutcomebisbpredictedbwithbcertainty.
b) Abdeterministicbmodelbcanbonlybbebusedbtobexplainbshort-runbeconomicbphenomena.
c) Abdeterministicbmodelbisbmostbusefulbinbidentifyingblong-termbtrends.
d) Abdeterministicbmodelbisbusedbinbthebstudybofbnormativebeconomics.
e) Theboutcomebofbabdeterministicbmodelbisbrandombandbhasbprobabilitiesbattached.

ANSWER:ba
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bEasy



6. Whichbofbthebfollowingbcorrectlybexplainsbabprobabilisticbmodel?
a) Abprobabilisticbmodelbgivesbabdescriptionbofbrealbworldbeconomicbphenomena.
b) Abprobabilisticbmodelbshowsbthebpossibilitybofbabrangebofboutcomes.
c) Abprobabilisticbmodelbexaminesbthebchangesbinbeconomicbvariablesboverbabperiodbofbtime.
d) Abprobabilisticbmodelbisbbasedbonbvaluebjudgments.
e) Abprobabilisticbmodelbisbusedbtobexplainblong-runbeconomicbphenomena

ANSWER:bb
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bEasy



7. Maximizingbprofitbbybenumeratingbthebprofitboutcomesbofbdifferentbcoursesbofbaction
a) Isbonlybapplicablebtobproblemsbwithbabsmallbnumberbofbalternatives.
b) Becomesbincreasinglybcostlybasbthebnumberbofbchoicesbincrease.
c) Alwaysbdiscoversbthebbestbpossiblebchoice.



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, d) Providesbabusefulbshortcutbtobfindingbtheboptimalbchoice.
e) Answersbbbandbcbarebbothbcorrect.

ANSWER:bb
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bMedium



8. Abbeveragesbcompanybwantsbtoblaunchbabnewbdietbsodabaimedbatbdiabeticsbandbhealth-
consciousbcustomers.bItbwillbusebab economicbmodelbtobidentifybitsbtargetbcustomers.
a) deterministic
b) dynamic
c) qualitative
d) stochastic
e) probabilistic

ANSWER:ba
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bMedium



9. Givenbthatbthebmarketbsharebofbabfirmbdependsbonbmanybunpredictablebfactors,babfirmbwillbusebab
economicbmodelbtobestimatebthebmarketbsharebforbonebofbitsbproducts.
a) deterministic
b) dynamic
c) qualitative
d) probabilistic
e) comparativebstatics

ANSWER:bd
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bMedium



10. Sensitivitybanalysisbisbusedbbybabfirmbto:
a) analyzebthebimpactbofbabchangebinbthebpricebofbthebgoodbonbthebdemandbforbthebgood.
b) examinebthebstaticbeffectsbofbanbeconomicbdecisionbonbthebfirm‘sbprofitability.
c) analyzebthebsocialbcostsbandbbenefitsbofbanbeconomicbdecision.
d) examinebthebopportunitybcostsbofbanbeconomicbdecision.
e) examinebhowbanboptimalbdecisionbisbaffectedbifbkeybeconomicbfactsbvary.

ANSWER:be
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMaking



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, DIFFICULTYbLEVEL:bEasy



11. Abcosmeticsbcompanybisbconductingbabsecond-
yearbreviewbofbonebofbitsbnewestbproducts.bThebmarketingbdepartmentbexpectsbthatbthebfirmbwil
lbcontinuebtobearnbprofitsbfrombthebsalebofbthebproductbinbthebthirdbyearbasbitbdidbinbthebpastbtwob
years.bSeniorbmanagement,bhowever,bfeelsbthatbthebprofitbprojectionsbwouldbvarybbasedbonboth
erbfactorsbsuchbasbthebpricebofbthebcompetitor'sbproducts,bthebactualblevelbofbsales,bandbthebpossi
bilitybofbcostbreductions.bInbotherbwords,bthebseniorbmanagementbisbundertakingb .
a) absensitivitybanalysis
b) anbenumerationbstudy
c) abbenefit-costbanalysis
d) abcontingentbvaluationbstudy
e) abstrategicbanalysis

ANSWER:ba
SECTIONbREFERENCE:bSixbStepsbtobDecisionbMakingbDIFFICUL
TYbLEVEL:bMedium



12. Accordingbtobthebsatisficingbmodelbofbmanagementbbehavior,bthebgoalbofbabfirmbisbto:
a) satisfybcustomers,bemployees,bandbshareholders.
b) maximizebthebgainbtobsocietybandbnotbjustbtobshareholders.
c) achievebabsatisfactoryblevelbofbperformancebagainstbabbenchmark.
d) maximizebsalesbrevenuebandbnotbnecessarilybthebvaluebofbthebfirm.
e) maximizebitsbmarketbsharebevenbatbthebcostbofbprofit.

ANSWER:bc
SECTIONbREFERENCE:bPrivatebandbPublicbDecisions:bAnbEconomicbViewbDIFFICULTY
bLEVEL: bEasy




13. Accordingbtobthebtheorybofbthebfirm,bthebmanagement‘sbultimatebobjectivebisbto:
a) maximizebshort-termbprofit,bevenbifbthisbsacrificesblong-termbprofit.
b) maximizebthebvaluebofbthebfirm.
c) increasebproductionbtobthebhighestbpossibleblevel.
d) increasebthebmarketbsharebofbthebfirm.
e) diversifybintobasbmanybproductblinesbasbthebfirmbcan.

ANSWER:bb
SECTIONbREFERENCE:bPrivatebandbPublicbDecisions:bAnbEconomicbViewbDIFFICULTY
bLEVEL: bEasy




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