Economics For Managers Final Exam Multiple Choice Questions
1. E: Profit is maximized where:
a. marginal revenue equals zero
b. total revenue is maximized
c. marginal profit equals zero
d. marginal cost equals marginal revenue
e. both c and d
f. none of the above
2. A: If your marginal revenue is $19 per unit and your marginal cost is $11 per unit
you should:
a. lower your price
b. raise your price
c. maintain your current price
d. obtain more information; you cannot tell what to do based solely on this
3. A: Marginal revenue:
a. is the revenue earned from selling an additional unit of the good or service
b. should be zero i profit is maximized
c. is always equal to the price of a good or service
d. both a and c are correct
4. B: changes in something other than a product's own price causes:
a. quantity demanded to change
b. the demand curve to shift
c. the variable cost of a good to change
d. no change; price is the only thing which matters
5. E: Elasticity of demand is:
a. a way to measure price discrimination
b. a measure of how demand changes when variables in the demand function
change
c. something you can calculate for any variable in a demand equation
d. both a and c are correct
e. both b and c are correct
6. B: An inferior good, as defined in economic, is:
a. a good of lower quality than its counterparts
b. a good with an income elasticity < 0
c. a good with an income elasticity > 0
d. a figment of your instructor's imagination
7. C: If own price elasticity of demand for your product is -1.16, which of the following
is true?
a. you should lower your price
b. you are selling an inferior good or service
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, Economics For Managers Final Exam Multiple Choice Questions
c. you are on the elastic portion of your demand curve
d. your good is a complement to another good
8. D: If the cross-price elasticity for your product is -.69 as compared to product X,
you can make which of the following statements about your product:
a. your product is inelastic
b. your product is a substitute to product X
c. your product is an inferior good
d. your product is a complement to product X
9. A: You have made a decision to go forward with marketing campaign C after
reviewing plans A, B, and C. Your boss asks you to perform sensitivity analysis on
your decisions and submit a report. Which of the following analyses would be a part
of your report?
a. explaining the impact of being 5% high or low in your estimates for plan C.
b. explaining why campaign C is better than A or B.
c. Outlining the pros and cons of plans A, B, and C.
d. Both a and b will be included in your report
e. All of the above will be included in your report
10. E: Price discrimination is:
a. only possible if firms have the ability to segment their market and enforce
differences in prices
b. the ability of firms to charge customers different prices based on their willingness
to pay
c. illegal according to Title VII of the Civil Rights Act
d. all of the above are correct
e. both a and b are correct
11. B: An example of 3rd degree (or direct) price discrimination is:
a. asking each customer what they would be willing to pay for the toilet gold training
potter putter to it on Amazon and charge accordingly
b. charging a student rate to see the new Aquaman movie instead of the regular
adult rate
c. offering a lower admission fee, o an economics class taking a field trip to the
Coca-Cola museum
d. charging different prices for different sizes of pizza at R-Pizza
e. both c and d are correct
12. E: Which of the following is a pitfall of customer surveys?
a. sample bias
b. response bias
c. cost
d. response accuracy
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1. E: Profit is maximized where:
a. marginal revenue equals zero
b. total revenue is maximized
c. marginal profit equals zero
d. marginal cost equals marginal revenue
e. both c and d
f. none of the above
2. A: If your marginal revenue is $19 per unit and your marginal cost is $11 per unit
you should:
a. lower your price
b. raise your price
c. maintain your current price
d. obtain more information; you cannot tell what to do based solely on this
3. A: Marginal revenue:
a. is the revenue earned from selling an additional unit of the good or service
b. should be zero i profit is maximized
c. is always equal to the price of a good or service
d. both a and c are correct
4. B: changes in something other than a product's own price causes:
a. quantity demanded to change
b. the demand curve to shift
c. the variable cost of a good to change
d. no change; price is the only thing which matters
5. E: Elasticity of demand is:
a. a way to measure price discrimination
b. a measure of how demand changes when variables in the demand function
change
c. something you can calculate for any variable in a demand equation
d. both a and c are correct
e. both b and c are correct
6. B: An inferior good, as defined in economic, is:
a. a good of lower quality than its counterparts
b. a good with an income elasticity < 0
c. a good with an income elasticity > 0
d. a figment of your instructor's imagination
7. C: If own price elasticity of demand for your product is -1.16, which of the following
is true?
a. you should lower your price
b. you are selling an inferior good or service
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, Economics For Managers Final Exam Multiple Choice Questions
c. you are on the elastic portion of your demand curve
d. your good is a complement to another good
8. D: If the cross-price elasticity for your product is -.69 as compared to product X,
you can make which of the following statements about your product:
a. your product is inelastic
b. your product is a substitute to product X
c. your product is an inferior good
d. your product is a complement to product X
9. A: You have made a decision to go forward with marketing campaign C after
reviewing plans A, B, and C. Your boss asks you to perform sensitivity analysis on
your decisions and submit a report. Which of the following analyses would be a part
of your report?
a. explaining the impact of being 5% high or low in your estimates for plan C.
b. explaining why campaign C is better than A or B.
c. Outlining the pros and cons of plans A, B, and C.
d. Both a and b will be included in your report
e. All of the above will be included in your report
10. E: Price discrimination is:
a. only possible if firms have the ability to segment their market and enforce
differences in prices
b. the ability of firms to charge customers different prices based on their willingness
to pay
c. illegal according to Title VII of the Civil Rights Act
d. all of the above are correct
e. both a and b are correct
11. B: An example of 3rd degree (or direct) price discrimination is:
a. asking each customer what they would be willing to pay for the toilet gold training
potter putter to it on Amazon and charge accordingly
b. charging a student rate to see the new Aquaman movie instead of the regular
adult rate
c. offering a lower admission fee, o an economics class taking a field trip to the
Coca-Cola museum
d. charging different prices for different sizes of pizza at R-Pizza
e. both c and d are correct
12. E: Which of the following is a pitfall of customer surveys?
a. sample bias
b. response bias
c. cost
d. response accuracy
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