GMS 402 Final Exam (Managerial Economics Final Exam Notes) with Complete Solutions!!

Managerial Economics - ANSWER-The study of how to direct scarce resources in the way that most efficiently achieves a managerial goal How to calculate economic profit - ANSWER-= accounting profit - opportunity cost Basic Principles compromising effective management - ANSWER--Identifying goals and constraints -Recognize the nature and importance of profits -Understand incentives -Understand markets -Recognize the time value of money -Use marginal Analysis The three rivalries in economic transactions - ANSWER-Consumer - producer rivalry Consumer - consumer rivalry Producer - producer rivalry Which of the following is among the 5 forces that impact the sustainability of industry profits according to Michael Porter 1. Entry 2. Firm Size 3. Power of Buyers 4. Industry Rivals - ANSWER-1. Entry 3. Power of Buyers 4. Industry Rivals True of false: managerial economics includes the analysis of household decisions making - ANSWER-True Law of Demand - ANSWER-As price goes up, quantity demanded goes down. As price goes down, quantity demanded goes up. Movement along the demand curve is called - ANSWER-change in quantity demanded A rightward shift in demand: A leftward shift in demand: