lOMoAR cPSD| 57394295
Managerial Economics & Business Strategy 9th
Edition by Michael Baye Test bank
, lOMoAR cPSD| 57394295
1. The higher the interest rate:
A. the greater the present value of a future amount.
B. the smaller the present value of a future amount.
C. the greater the level of inflation.
D. None of the statements associated with this question are correct.
Answer: B
Learning Objective: 01-05
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
2. If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000
at the end of year two, then the present value of these cash flows is: A. $2,562.
B. $3,200.
C. $439.
D. $3,000.
Answer: A
Learning Objective: 01-05
Topic: The Economics of Effective Management
Blooms: Apply
AACSB: Analytical Thinking
Difficulty: 1 Easy
3. Accounting profits are:
A. total revenue minus total cost.
B. total cost minus total revenue.
C. marginal revenue minus total cost.
D. total revenue minus marginal cost.
Answer: A
Learning Objective: 01-02
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
4. Economic profits are:
A. total revenue minus total cost.
B. marginal revenue minus marginal cost.
, lOMoAR cPSD| 57394295
C. total revenue minus total opportunity cost.
D. total profits of the economy as a whole.
Answer: C
Learning Objective: 01-02
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
5. Which of the following is an implicit cost to a firm that produces a good or service?
A. Labor costs
B. Costs of operating production machinery
C. Foregone profits of producing a different good or service
D. Costs of renting or buying land for a production site
Answer: C
Learning Objective: 01-01
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
6. Which of the following is an implicit cost of going to college?
A. Tuition
B. Cost of books and supplies
C. Room and board
D. Foregone wages
Answer: D
Learning Objective: 01-01
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
7. Which of the following are signals to the owners of scarce resources about the best uses of
those resources? A. Profits of businesses
B. Government regulations
C. Economic indicators
D. The accounting cost of those resources
, lOMoAR cPSD| 57394295
Answer: A
Learning Objective: 01-03
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
8. The primary inducement for new firms to enter an industry is: A.
increased technology.
B. availability of labor.
C. low capital costs.
D. presence of economic profits.
Answer: D
Learning Objective: 01-03
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
9. As more firms enter an industry: A.
accounting profits increase.
B. economic profits decrease.
C. prices rise.
D. None of the statements associated with this question are correct.
Answer: B
Learning Objective: 01-04
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
10. Scarce resources are ultimately allocated toward the production of goods most wanted by
society because:
A. firms attempt to maximize profits.
B. they are most efficiently utilized in these areas.
C. consumers demand inexpensive goods and services.
D. managers are benevolent.
Answer: A
Learning Objective: 01-03
Topic: The Economics of Effective Management
Managerial Economics & Business Strategy 9th
Edition by Michael Baye Test bank
, lOMoAR cPSD| 57394295
1. The higher the interest rate:
A. the greater the present value of a future amount.
B. the smaller the present value of a future amount.
C. the greater the level of inflation.
D. None of the statements associated with this question are correct.
Answer: B
Learning Objective: 01-05
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
2. If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000
at the end of year two, then the present value of these cash flows is: A. $2,562.
B. $3,200.
C. $439.
D. $3,000.
Answer: A
Learning Objective: 01-05
Topic: The Economics of Effective Management
Blooms: Apply
AACSB: Analytical Thinking
Difficulty: 1 Easy
3. Accounting profits are:
A. total revenue minus total cost.
B. total cost minus total revenue.
C. marginal revenue minus total cost.
D. total revenue minus marginal cost.
Answer: A
Learning Objective: 01-02
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
4. Economic profits are:
A. total revenue minus total cost.
B. marginal revenue minus marginal cost.
, lOMoAR cPSD| 57394295
C. total revenue minus total opportunity cost.
D. total profits of the economy as a whole.
Answer: C
Learning Objective: 01-02
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
5. Which of the following is an implicit cost to a firm that produces a good or service?
A. Labor costs
B. Costs of operating production machinery
C. Foregone profits of producing a different good or service
D. Costs of renting or buying land for a production site
Answer: C
Learning Objective: 01-01
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
6. Which of the following is an implicit cost of going to college?
A. Tuition
B. Cost of books and supplies
C. Room and board
D. Foregone wages
Answer: D
Learning Objective: 01-01
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
7. Which of the following are signals to the owners of scarce resources about the best uses of
those resources? A. Profits of businesses
B. Government regulations
C. Economic indicators
D. The accounting cost of those resources
, lOMoAR cPSD| 57394295
Answer: A
Learning Objective: 01-03
Topic: The Economics of Effective Management
Blooms: Understand
AACSB: Knowledge Application
Difficulty: 02 Medium
8. The primary inducement for new firms to enter an industry is: A.
increased technology.
B. availability of labor.
C. low capital costs.
D. presence of economic profits.
Answer: D
Learning Objective: 01-03
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
9. As more firms enter an industry: A.
accounting profits increase.
B. economic profits decrease.
C. prices rise.
D. None of the statements associated with this question are correct.
Answer: B
Learning Objective: 01-04
Topic: The Economics of Effective Management
Blooms: Remember
AACSB: Knowledge Application
Difficulty: 01 Easy
10. Scarce resources are ultimately allocated toward the production of goods most wanted by
society because:
A. firms attempt to maximize profits.
B. they are most efficiently utilized in these areas.
C. consumers demand inexpensive goods and services.
D. managers are benevolent.
Answer: A
Learning Objective: 01-03
Topic: The Economics of Effective Management
