MBA 701 WEEK 1 EXAM 2025/2026
QUESTIONS AND ANSWERS 100% PASS
Economics - ANS the study of how individuals, institutions, commercial enterprises,
countries, and governments allocate scarce resources amongst competing uses
scarcity - ANS the output of goods and services is limited bc of the supply of productive
inputs and other resources needed for their production is finite
opportunity cost - ANS highest-valued alternative foregone when a choice is made
managerial economics - ANS application of economic principles to topics of concern to
managers
managerial economics combines - ANS the various business disciplines (acct, fin, market,
manage) with quantitative methods ( optimization analysis, game theory, statistics, forecasting)
to find optimal solutions to business problems
strategic behavior - ANS decisions made by an individual or group affect and are affected by
the decisions of other individuals or groups
game theory - ANS the study of strategic behavior
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, quantitative methods - ANS include mathematical tools and techniques of analysis-
optimization analysis, statistical methods, forecasting and game theory
role of a manager - ANS responsible for making the day-to-day operational and long run
strategic decisions that determine a company's success or failure
production function - ANS is assumed to exhibit certain desirable mathematical properties
like the law of diminishing returns, returns to scale and substitutability between and among
productive inputs
law of diminishing returns - ANS principle stating that profits or benefits gained from
something will represent a proportionally smaller gain as more money or energy is invested
returns to scale - ANS refers to the proportionality of changes in output after amounts of all
inputs in production have been changed by the same factor
interest rate - ANS price paid for the use of borrowed funds
discount rate - ANS used to determine present value
is a dollar today worth more than a dollar tomorrow? - ANS yes, a dollar today can be
reinvested at some interest rate to yield an even greater amount tomorrow
net present value - ANS difference between the present value of cash inflows and cash
outflows
total revenue - ANS equal to prices times the number of units sold
total profit - ANS can be defined as total revenue earned from the sale of a good or service
sold minus the total cost incurred from its production
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS AND ANSWERS 100% PASS
Economics - ANS the study of how individuals, institutions, commercial enterprises,
countries, and governments allocate scarce resources amongst competing uses
scarcity - ANS the output of goods and services is limited bc of the supply of productive
inputs and other resources needed for their production is finite
opportunity cost - ANS highest-valued alternative foregone when a choice is made
managerial economics - ANS application of economic principles to topics of concern to
managers
managerial economics combines - ANS the various business disciplines (acct, fin, market,
manage) with quantitative methods ( optimization analysis, game theory, statistics, forecasting)
to find optimal solutions to business problems
strategic behavior - ANS decisions made by an individual or group affect and are affected by
the decisions of other individuals or groups
game theory - ANS the study of strategic behavior
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, quantitative methods - ANS include mathematical tools and techniques of analysis-
optimization analysis, statistical methods, forecasting and game theory
role of a manager - ANS responsible for making the day-to-day operational and long run
strategic decisions that determine a company's success or failure
production function - ANS is assumed to exhibit certain desirable mathematical properties
like the law of diminishing returns, returns to scale and substitutability between and among
productive inputs
law of diminishing returns - ANS principle stating that profits or benefits gained from
something will represent a proportionally smaller gain as more money or energy is invested
returns to scale - ANS refers to the proportionality of changes in output after amounts of all
inputs in production have been changed by the same factor
interest rate - ANS price paid for the use of borrowed funds
discount rate - ANS used to determine present value
is a dollar today worth more than a dollar tomorrow? - ANS yes, a dollar today can be
reinvested at some interest rate to yield an even greater amount tomorrow
net present value - ANS difference between the present value of cash inflows and cash
outflows
total revenue - ANS equal to prices times the number of units sold
total profit - ANS can be defined as total revenue earned from the sale of a good or service
sold minus the total cost incurred from its production
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
