MBA815: Unit 1 Exam Study
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1. A good example of a consumer-consumer rivalry is:
a. the process of bidding in an auction
b. negotiations between buyer and seller of a new house
c. the competition between pizza restaurants
d. None of the above: a
2. Opportunity cost differs from accounting costs because of:
a; explicit costs
b. accounting profits
c. economic profits
d. implicit costs: d
3. Scarce resources are allocated towards the production of goods mots
valued by society because:
a. government mandates resources to be used in certain production combi-
nations
b. consumers are unwilling to buy expensive good and servies
c. firms have incentive to maximize profits
d. of the benevolence of firm owners: c
4. If the marginal cost equals marginal revenue at the current production level,
the firm is:
a. earning zero economic profits
b. earning zero accounting profits
c. maximizing profits
d. all of the above: c
5. Which of the following statements is most likely true regarding economic
and accounting profits?
a. economic profits are generally less than accounting profits
b. economic profits plus accounting profits generally equal zero
c. economic profits minus accounting profits generally equal zero
d. economic profits are generally greater than explicit costs: a
6. If firms in the pizza industry are earning positive economic profits, which of
the following will most likely occur in the future?
a. additional firms will enter the market
b. the economic profits of the firms in the industry will decline
c. the market price for pizza will fall
d. all of the above: d
7. Which of the following reduces the potential for sustainable long run indus-
try profits?
a. entry
b. absence of substitutes
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, MBA815: Unit 1 Exam Study
Study online at https://quizlet.com/_bpfqjg
c. absence of complements
d. none of the above: a
8. Which of the following is one of the five forces?
a. rivalry
b. power of buyers
c. power of sellers
d. all of the above: d
9. Maximizing the firms current profits is the same as maximizing the lifetime
value of the firm when the:
a. growth rate in profits is larger than the interest rate
b. growth rate in profits and the interest rate are equal
c. interest rate is constant and is smaller than the growth rate in profits
d. interest rate is larger than the growth rate in profits and are both constant: d
10. If a decrease in the price of hot tea increases the demand for honey, this
indicates that
a. the two goods are substitutes
b. the two goods are complements
c. hot tea is an inferior good
d. honey is an inferior good: b
11. Consumer surplus is measured as the area
a. below the demand curve and above the market price
b. above the demand curve and below the market price
c. above the supply curve and below the market price
d. below the supply curve and above the market price: a
12. Which of the following is most likely to shift the demand curve for electric-
ity to the left?
a. consumers becoming more energy conscious
b. an increase in income
c. a decrease in the price of electricity
d. an increase in the price of natural gas, a substitute source of energy: a
13. For a chemical manufacturer that emits some air pollutants, if the govern-
ment increased the restrictions on allowable emission levels, it would cause
the supply curve of chemicals to
a. become flatter
b. become steeper
c. shift to the right
d. shift to the left: d
14. When the government imposes a price ceiling above the market price, that
result will be that
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Study online at https://quizlet.com/_bpfqjg
1. A good example of a consumer-consumer rivalry is:
a. the process of bidding in an auction
b. negotiations between buyer and seller of a new house
c. the competition between pizza restaurants
d. None of the above: a
2. Opportunity cost differs from accounting costs because of:
a; explicit costs
b. accounting profits
c. economic profits
d. implicit costs: d
3. Scarce resources are allocated towards the production of goods mots
valued by society because:
a. government mandates resources to be used in certain production combi-
nations
b. consumers are unwilling to buy expensive good and servies
c. firms have incentive to maximize profits
d. of the benevolence of firm owners: c
4. If the marginal cost equals marginal revenue at the current production level,
the firm is:
a. earning zero economic profits
b. earning zero accounting profits
c. maximizing profits
d. all of the above: c
5. Which of the following statements is most likely true regarding economic
and accounting profits?
a. economic profits are generally less than accounting profits
b. economic profits plus accounting profits generally equal zero
c. economic profits minus accounting profits generally equal zero
d. economic profits are generally greater than explicit costs: a
6. If firms in the pizza industry are earning positive economic profits, which of
the following will most likely occur in the future?
a. additional firms will enter the market
b. the economic profits of the firms in the industry will decline
c. the market price for pizza will fall
d. all of the above: d
7. Which of the following reduces the potential for sustainable long run indus-
try profits?
a. entry
b. absence of substitutes
1/6
, MBA815: Unit 1 Exam Study
Study online at https://quizlet.com/_bpfqjg
c. absence of complements
d. none of the above: a
8. Which of the following is one of the five forces?
a. rivalry
b. power of buyers
c. power of sellers
d. all of the above: d
9. Maximizing the firms current profits is the same as maximizing the lifetime
value of the firm when the:
a. growth rate in profits is larger than the interest rate
b. growth rate in profits and the interest rate are equal
c. interest rate is constant and is smaller than the growth rate in profits
d. interest rate is larger than the growth rate in profits and are both constant: d
10. If a decrease in the price of hot tea increases the demand for honey, this
indicates that
a. the two goods are substitutes
b. the two goods are complements
c. hot tea is an inferior good
d. honey is an inferior good: b
11. Consumer surplus is measured as the area
a. below the demand curve and above the market price
b. above the demand curve and below the market price
c. above the supply curve and below the market price
d. below the supply curve and above the market price: a
12. Which of the following is most likely to shift the demand curve for electric-
ity to the left?
a. consumers becoming more energy conscious
b. an increase in income
c. a decrease in the price of electricity
d. an increase in the price of natural gas, a substitute source of energy: a
13. For a chemical manufacturer that emits some air pollutants, if the govern-
ment increased the restrictions on allowable emission levels, it would cause
the supply curve of chemicals to
a. become flatter
b. become steeper
c. shift to the right
d. shift to the left: d
14. When the government imposes a price ceiling above the market price, that
result will be that
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