Managerial Economics & Business Strategy Michael Baye 9th Edition- Test Bank 2023/2024

Multiple Choice Questions 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