MANAGERIAL ECONOMICS
(Economics)STUDY GUIDE QUESTIONS
AND ANSWERS TO PASS
Suppose a firm has two plants, A and B, each producing the same product but
using different production processes. After analyzing production data, a
manager finds that the marginal product of labor in plant A is greater than the
marginal product of labor in plant B. What should he recommend as a short-run
remedy?
Correct Answer -Move labor from plant B to plant A.
Index of Leading Indicators
Correct Answer -signals future changes in the course of the economy
1. weekly hours of manufacturing workers
2. manufacturers' new orders
3. changes in manufacturers' unfilled orders
4. plant and equipment orders
5. the number of housing building permits
6. changes in sensitive materials prices
7. percentage of companies receiving slower deliveries
8. the money supply
9. the index of consumer confidence
10. the index of 500 companies' common-stock prices
,11. average weekly claims for unemployment insurance
If MRP>MC
Correct Answer -add more workers
if 'a' and 'b' are <1 in CD function
Correct Answer -decreasing return to scale
if 'a' and 'b' are >1
Correct Answer -constant or could be increasing
change in general income will
Correct Answer -shift demand curve
firm demand equation Q=60-60P+2Y. P=2 Y=80
Correct Answer -quantity demand will increase by 40
normal good
Correct Answer -steak, new smart phone
inferior good
Correct Answer -used smart phone, used car
elastic
Correct Answer -|EP|> 1
, unitary elastic
Correct Answer -|EP|= 1
inelastic
Correct Answer -|EP|<1
perfectly elastic
Correct Answer -EP= infiity
perfectly inelastic
Correct Answer -=0
price elasticity of demand when substituted become available
Correct Answer -it becomes more elastic
law of demand
Correct Answer -states, all other factors being equal, as the price of a good or
service increases, consumer demand for the good or service will decrease, and
vice versa.
In the long run, perfectly competitive firms are at equilibrium when
Correct Answer -P = LMC = LAC
Which of the following is a characteristic of a perfectly competitive market?
Correct Answer -A perfectly competitive market has a large number of small
firms.
(Economics)STUDY GUIDE QUESTIONS
AND ANSWERS TO PASS
Suppose a firm has two plants, A and B, each producing the same product but
using different production processes. After analyzing production data, a
manager finds that the marginal product of labor in plant A is greater than the
marginal product of labor in plant B. What should he recommend as a short-run
remedy?
Correct Answer -Move labor from plant B to plant A.
Index of Leading Indicators
Correct Answer -signals future changes in the course of the economy
1. weekly hours of manufacturing workers
2. manufacturers' new orders
3. changes in manufacturers' unfilled orders
4. plant and equipment orders
5. the number of housing building permits
6. changes in sensitive materials prices
7. percentage of companies receiving slower deliveries
8. the money supply
9. the index of consumer confidence
10. the index of 500 companies' common-stock prices
,11. average weekly claims for unemployment insurance
If MRP>MC
Correct Answer -add more workers
if 'a' and 'b' are <1 in CD function
Correct Answer -decreasing return to scale
if 'a' and 'b' are >1
Correct Answer -constant or could be increasing
change in general income will
Correct Answer -shift demand curve
firm demand equation Q=60-60P+2Y. P=2 Y=80
Correct Answer -quantity demand will increase by 40
normal good
Correct Answer -steak, new smart phone
inferior good
Correct Answer -used smart phone, used car
elastic
Correct Answer -|EP|> 1
, unitary elastic
Correct Answer -|EP|= 1
inelastic
Correct Answer -|EP|<1
perfectly elastic
Correct Answer -EP= infiity
perfectly inelastic
Correct Answer -=0
price elasticity of demand when substituted become available
Correct Answer -it becomes more elastic
law of demand
Correct Answer -states, all other factors being equal, as the price of a good or
service increases, consumer demand for the good or service will decrease, and
vice versa.
In the long run, perfectly competitive firms are at equilibrium when
Correct Answer -P = LMC = LAC
Which of the following is a characteristic of a perfectly competitive market?
Correct Answer -A perfectly competitive market has a large number of small
firms.
