TEST BANK FOR Managerial Economics, 9th Edition
William F. Samuelson, Stephen G. Marks, Jay L.
Zagorsky
1-1
,File: mCh01; mCHAPTER m1: mIntroduction mto mEconomic mDecision
mMaking mMULTIPLE mCHOICE
1. Managerial m economics m can m best m be m defined m as m the:
a) macroeconomics m and m microeconomics m for m managers.
b) study mof m economic m incentives m on m consumer m behavior m and m demand.
c) analysis mof m the mlabor m market m through m the m behavior m of m workers m and m managers.
d) analysis m of m major m management m decisions m using m economic m tools.
e) study mof m the mstrategic m interaction m between m firms m in m a m market.
ANSWER: m d
SECTION mREFERENCE: mIntroduction
mDIFFICULTY mLEVEL: mEasy
2. Which mof mthe m following m is m not m one m of m the m steps m in m managerial m decision m making?
a) Predicting mthe m consequences m of m a m decision.
b) Exploring mthe m alternatives m to m the m decision.
c) Defining mthe m problem m and m the m objectives m of m the m decision.
d) Negotiating m a m consensus m to m implement m the m decision.
e) Performing msensitivity manalysis.
ANSWER: m d
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
3. Profit mmaximization m is m an m ambiguous m guide m to m decision m making min m the mprivate m sector
m because:
a) firms min m the m private m sector m usually mdo m not m aim m at m profit m maximization.
b) the mgoal m of m profit m maximization m contradicts m the m goal m of m satisfying mthe m firm‘s
m shareholders.
c) of mthe m presence m of m risk m and m uncertainty.
d) profit-maximization mignores m social m costs m and m benefits.
e) None mof m the m above m answers m is m correct.
ANSWER: m c
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
1-2
,4. Which mof m the m following m is m true m of m economic m models?
a) Models mare mtoo m theoretical m to m be mapplicable m in m real m world m decisions.
b) Models mare m not m useful m because m uncertainty mprevents m accurate m forecasts.
c) Models mare msimplified m descriptions m of mprocesses, m relationships, m or m other mphenomena.
d) Models m describe mreal m world m situations m in mcomplete m detail.
e) Models mare mnot museful mbecause mthey mdo mnot mtake minto maccount
mcomplicating mand mless mimportant mfeatures mof ma mproblem.
ANSWER: m c
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
5. Which mof mthe m following m correctly mdescribes m a m deterministic m economic m model?
a) A mdeterministic m model m is m a m model m for m which m the m outcome m is m predicted m with
m certainty.
b) A mdeterministic m model m can m only mbe mused m to m explain m short-run m economic m phenomena.
c) A mdeterministic m model m is m most m useful m in m identifying mlong-term m trends.
d) A mdeterministic m model m is m used m in m the m study mof m normative m economics.
e) The moutcome m of m a m deterministic m model m is m random m and m has m probabilities m attached.
ANSWER: m a
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
6. Which mof mthe m following m correctly mexplains m a m probabilistic m model?
a) A mprobabilistic m model m gives m a mdescription m of m real m world m economic m phenomena.
b) A mprobabilistic m model m shows m the m possibility mof m a m range m of m outcomes.
c) A mprobabilistic m model m examines m the m changes m in m economic m variables m over m a m period m of
m time.
d) A mprobabilistic m model m is mbased m on m value m judgments.
e) A mprobabilistic m model m is m used m to m explain m long-run m economic m phenomena
ANSWER: m b
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
7. Maximizing mprofit m by menumerating mthe m profit m outcomes m of m different m courses m of m action
a) Is monly mapplicable m to m problems m with m a m small m number m of m alternatives.
b) Becomes mincreasingly mcostly mas m the m number m of m choices m increase.
c) Always m discovers m the m best m possible m choice.
1-3
, d) Provides m a m useful m shortcut m to m finding mthe m optimal m choice.
e) Answers m b m and m c m are m both m correct.
ANSWER: m b
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
8. A mbeverages mcompany mwants mto mlaunch ma mnew mdiet msoda maimed mat mdiabetics mand
mhealth- mconscious mcustomers. mIt mwill muse ma m economic mmodel mto midentify mits
mtarget mcustomers.
a) deterministic
b) dynamic
c) qualitative
d) stochastic
e) probabilistic
ANSWER: m a
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
9. Given mthat mthe mmarket mshare mof ma mfirm mdepends mon mmany munpredictable mfactors, ma
mfirm mwill muse m a m m economic m model m to m estimate m the m market m share m for m one
m of m its m products.
a) deterministic
b) dynamic
c) qualitative
d) probabilistic
e) comparative mstatics
ANSWER: m d
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
10. Sensitivity manalysis m is m used m by ma m firm m to:
a) analyze mthe m impact m of m a m change m in m the m price mof m the m good m on m the m demand m for m the
m good.
b) examine mthe m static m effects m of m an m economic mdecision m on m the m firm‘s m profitability.
c) analyze mthe m social m costs m and m benefits m of m an m economic m decision.
d) examine mthe m opportunity mcosts m of m an m economic m decision.
e) examine mhow m an m optimal m decision m is m affected m if m key meconomic m facts m vary.
ANSWER: m e
1-4
William F. Samuelson, Stephen G. Marks, Jay L.
Zagorsky
1-1
,File: mCh01; mCHAPTER m1: mIntroduction mto mEconomic mDecision
mMaking mMULTIPLE mCHOICE
1. Managerial m economics m can m best m be m defined m as m the:
a) macroeconomics m and m microeconomics m for m managers.
b) study mof m economic m incentives m on m consumer m behavior m and m demand.
c) analysis mof m the mlabor m market m through m the m behavior m of m workers m and m managers.
d) analysis m of m major m management m decisions m using m economic m tools.
e) study mof m the mstrategic m interaction m between m firms m in m a m market.
ANSWER: m d
SECTION mREFERENCE: mIntroduction
mDIFFICULTY mLEVEL: mEasy
2. Which mof mthe m following m is m not m one m of m the m steps m in m managerial m decision m making?
a) Predicting mthe m consequences m of m a m decision.
b) Exploring mthe m alternatives m to m the m decision.
c) Defining mthe m problem m and m the m objectives m of m the m decision.
d) Negotiating m a m consensus m to m implement m the m decision.
e) Performing msensitivity manalysis.
ANSWER: m d
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
3. Profit mmaximization m is m an m ambiguous m guide m to m decision m making min m the mprivate m sector
m because:
a) firms min m the m private m sector m usually mdo m not m aim m at m profit m maximization.
b) the mgoal m of m profit m maximization m contradicts m the m goal m of m satisfying mthe m firm‘s
m shareholders.
c) of mthe m presence m of m risk m and m uncertainty.
d) profit-maximization mignores m social m costs m and m benefits.
e) None mof m the m above m answers m is m correct.
ANSWER: m c
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
1-2
,4. Which mof m the m following m is m true m of m economic m models?
a) Models mare mtoo m theoretical m to m be mapplicable m in m real m world m decisions.
b) Models mare m not m useful m because m uncertainty mprevents m accurate m forecasts.
c) Models mare msimplified m descriptions m of mprocesses, m relationships, m or m other mphenomena.
d) Models m describe mreal m world m situations m in mcomplete m detail.
e) Models mare mnot museful mbecause mthey mdo mnot mtake minto maccount
mcomplicating mand mless mimportant mfeatures mof ma mproblem.
ANSWER: m c
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
5. Which mof mthe m following m correctly mdescribes m a m deterministic m economic m model?
a) A mdeterministic m model m is m a m model m for m which m the m outcome m is m predicted m with
m certainty.
b) A mdeterministic m model m can m only mbe mused m to m explain m short-run m economic m phenomena.
c) A mdeterministic m model m is m most m useful m in m identifying mlong-term m trends.
d) A mdeterministic m model m is m used m in m the m study mof m normative m economics.
e) The moutcome m of m a m deterministic m model m is m random m and m has m probabilities m attached.
ANSWER: m a
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
6. Which mof mthe m following m correctly mexplains m a m probabilistic m model?
a) A mprobabilistic m model m gives m a mdescription m of m real m world m economic m phenomena.
b) A mprobabilistic m model m shows m the m possibility mof m a m range m of m outcomes.
c) A mprobabilistic m model m examines m the m changes m in m economic m variables m over m a m period m of
m time.
d) A mprobabilistic m model m is mbased m on m value m judgments.
e) A mprobabilistic m model m is m used m to m explain m long-run m economic m phenomena
ANSWER: m b
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mEasy
7. Maximizing mprofit m by menumerating mthe m profit m outcomes m of m different m courses m of m action
a) Is monly mapplicable m to m problems m with m a m small m number m of m alternatives.
b) Becomes mincreasingly mcostly mas m the m number m of m choices m increase.
c) Always m discovers m the m best m possible m choice.
1-3
, d) Provides m a m useful m shortcut m to m finding mthe m optimal m choice.
e) Answers m b m and m c m are m both m correct.
ANSWER: m b
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
8. A mbeverages mcompany mwants mto mlaunch ma mnew mdiet msoda maimed mat mdiabetics mand
mhealth- mconscious mcustomers. mIt mwill muse ma m economic mmodel mto midentify mits
mtarget mcustomers.
a) deterministic
b) dynamic
c) qualitative
d) stochastic
e) probabilistic
ANSWER: m a
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
9. Given mthat mthe mmarket mshare mof ma mfirm mdepends mon mmany munpredictable mfactors, ma
mfirm mwill muse m a m m economic m model m to m estimate m the m market m share m for m one
m of m its m products.
a) deterministic
b) dynamic
c) qualitative
d) probabilistic
e) comparative mstatics
ANSWER: m d
SECTION mREFERENCE: mSix mSteps mto mDecision mMaking
mDIFFICULTY mLEVEL: mMedium
10. Sensitivity manalysis m is m used m by ma m firm m to:
a) analyze mthe m impact m of m a m change m in m the m price mof m the m good m on m the m demand m for m the
m good.
b) examine mthe m static m effects m of m an m economic mdecision m on m the m firm‘s m profitability.
c) analyze mthe m social m costs m and m benefits m of m an m economic m decision.
d) examine mthe m opportunity mcosts m of m an m economic m decision.
e) examine mhow m an m optimal m decision m is m affected m if m key meconomic m facts m vary.
ANSWER: m e
1-4
