BADM 610 Homework Exam Questions
and Answers 100% PASS
microeconomics - CORRECT ANSWER-A. is generally too complex and abstract
to be of much use in making real-world business decisions.
B. studies the behavior of individual economic units or segments of the economy.
C. contributes to the understanding of ordinary business practices or tactics.
D. all of the above.
Correct --E. both b and c.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere.
,Total implicit costs of using owner-supplied resources for Quest Realty for this
year are - CORRECT ANSWER-$4,100,000
A manager who does not see his or her goal as the maximization of profit -
CORRECT ANSWER-both b and c
moral hazard - CORRECT ANSWER-is the cause of principal-agent problems.
St. Charles Hospital, located in an upper-income neighborhood of a large city,
recently received a restored mansion as a gift from an appreciative patient. The
board of directors decided to remodel the mansion and use it as recuperative
quarters for patients willing to pay for luxurious accommodations. The cost to the
hospital of using the mansion includes - CORRECT ANSWER-both b and c
Suppose Marv, the owner-manager of Marv's Hot Dogs, earned $82,000 in revenue
last year. Marv's explicit costs of operation totaled $36,000. Marv has a Bachelor of
Science degree in mechanical engineering and could be earning $40,000 annually as
mechanical engineer. - CORRECT ANSWER-Marv's economic profit is $6,000
economic profit - CORRECT ANSWER-is negative when total costs exceed total
revenues.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
,Economic theory is a valuable tool for business decision making because it -
CORRECT ANSWER-identifies for managers the essential information for
making a decision.
a risk premium is - CORRECT ANSWER-a measure calculated to reflect the
riskiness of future profits.
In a perfectly competitive market, - CORRECT ANSWER-all firms produce and
sell a standardized or undifferentiated product.
Owners of a firm want the managers to make business decisions which will -
CORRECT ANSWER-both a and b are correct when revenue and cost conditions
in one time period are independent of revenues and costs in future time periods.
a market - CORRECT ANSWER-is any arrangement that brings buyers and sellers
together to exchange goods or services.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere. - CORRECT ANSWER-
19,000,000
Consider a firm that employs some resources that are owned by the firm. When
accounting profit is zero, economic profit - CORRECT ANSWER-must be
negative and shareholder wealth is reduced.
, A price-taking firm can exert no control over price because - CORRECT
ANSWER-the firm's individual production is insignificant relative to total
production in the industry.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere. - CORRECT ANSWER-
42,300,000
a price-setting firm - CORRECT ANSWER-can lower the price of its product and
sell more units.
In markets characterized by oligopoly, - CORRECT ANSWER-entry into the
market is restricted so that profit may be positive in the long run.
Firms with market power may try to limit entry of rival firms in the long run by
setting the price of their product below the level that maximizes profit. This kind
of pricing behavior - CORRECT ANSWER-is a strategic pricing decision because
the manager is making the pricing decision with the goal of altering the behavior of
rival firms to protect its profit in the long run.
Economic profit is the best measure of a firm's performance because - CORRECT
ANSWER-the opportunity cost of using ALL resources is subtracted from total
revenue.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
and Answers 100% PASS
microeconomics - CORRECT ANSWER-A. is generally too complex and abstract
to be of much use in making real-world business decisions.
B. studies the behavior of individual economic units or segments of the economy.
C. contributes to the understanding of ordinary business practices or tactics.
D. all of the above.
Correct --E. both b and c.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere.
,Total implicit costs of using owner-supplied resources for Quest Realty for this
year are - CORRECT ANSWER-$4,100,000
A manager who does not see his or her goal as the maximization of profit -
CORRECT ANSWER-both b and c
moral hazard - CORRECT ANSWER-is the cause of principal-agent problems.
St. Charles Hospital, located in an upper-income neighborhood of a large city,
recently received a restored mansion as a gift from an appreciative patient. The
board of directors decided to remodel the mansion and use it as recuperative
quarters for patients willing to pay for luxurious accommodations. The cost to the
hospital of using the mansion includes - CORRECT ANSWER-both b and c
Suppose Marv, the owner-manager of Marv's Hot Dogs, earned $82,000 in revenue
last year. Marv's explicit costs of operation totaled $36,000. Marv has a Bachelor of
Science degree in mechanical engineering and could be earning $40,000 annually as
mechanical engineer. - CORRECT ANSWER-Marv's economic profit is $6,000
economic profit - CORRECT ANSWER-is negative when total costs exceed total
revenues.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
,Economic theory is a valuable tool for business decision making because it -
CORRECT ANSWER-identifies for managers the essential information for
making a decision.
a risk premium is - CORRECT ANSWER-a measure calculated to reflect the
riskiness of future profits.
In a perfectly competitive market, - CORRECT ANSWER-all firms produce and
sell a standardized or undifferentiated product.
Owners of a firm want the managers to make business decisions which will -
CORRECT ANSWER-both a and b are correct when revenue and cost conditions
in one time period are independent of revenues and costs in future time periods.
a market - CORRECT ANSWER-is any arrangement that brings buyers and sellers
together to exchange goods or services.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere. - CORRECT ANSWER-
19,000,000
Consider a firm that employs some resources that are owned by the firm. When
accounting profit is zero, economic profit - CORRECT ANSWER-must be
negative and shareholder wealth is reduced.
, A price-taking firm can exert no control over price because - CORRECT
ANSWER-the firm's individual production is insignificant relative to total
production in the industry.
During this year of operation, Quest Realty owned and occupied an office building
in downtown Indianapolis. For this year, the building could have been leased to
other businesses for $2,000,000 in lease income. Quest Realty also owned
undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14%
rate of return annually on funds invested elsewhere. - CORRECT ANSWER-
42,300,000
a price-setting firm - CORRECT ANSWER-can lower the price of its product and
sell more units.
In markets characterized by oligopoly, - CORRECT ANSWER-entry into the
market is restricted so that profit may be positive in the long run.
Firms with market power may try to limit entry of rival firms in the long run by
setting the price of their product below the level that maximizes profit. This kind
of pricing behavior - CORRECT ANSWER-is a strategic pricing decision because
the manager is making the pricing decision with the goal of altering the behavior of
rival firms to protect its profit in the long run.
Economic profit is the best measure of a firm's performance because - CORRECT
ANSWER-the opportunity cost of using ALL resources is subtracted from total
revenue.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
