GMS 402 Final Exam questions well
answered to pass
Managerial Economics - correct answer ✔✔The study of how to direct scarce resources in the way that
most efficiently achieves a managerial goal
How to calculate economic profit - correct answer ✔✔= accounting profit - opportunity cost
Basic Principles compromising effective management - correct answer ✔✔-Identifying goals and
constraints
-Recognize the nature and importance of profits
-Understand incentives
-Understand markets
-Recognize the time value of money
-Use marginal Analysis
The three rivalries in economic transactions - correct answer ✔✔Consumer - producer rivalry
Consumer - consumer rivalry
Producer - producer rivalry
Which of the following is among the 5 forces that impact the sustainability of industry profits according
to Michael Porter
1. Entry
2. Firm Size
3. Power of Buyers
4. Industry Rivals - correct answer ✔✔1. Entry
, 3. Power of Buyers
4. Industry Rivals
True of false: managerial economics includes the analysis of household decisions making - correct
answer ✔✔True
Law of Demand - correct answer ✔✔As price goes up, quantity demanded goes down.
As price goes down, quantity demanded goes up.
Movement along the demand curve is called - correct answer ✔✔change in quantity demanded
A rightward shift in demand:
A leftward shift in demand: - correct answer ✔✔Increases demand
Decreases Demand
What are the demand shifters - correct answer ✔✔Income
Price of related goods
Advertising/Tastes
Population
Consumer Expectations
Normal goods vs inferior goods - correct answer ✔✔Normal good: Good whose demand increases when
consumer income increases
Inferior good: Good whose demand increases as consumer income decreases
"substitute" vs. "complementary" goods - correct answer ✔✔Substitutes goods: when the INCREASE of
the price for one goods increases the demand for the other good
Complement goods: when the REDUCTION of the price of on good increases the demand for another
answered to pass
Managerial Economics - correct answer ✔✔The study of how to direct scarce resources in the way that
most efficiently achieves a managerial goal
How to calculate economic profit - correct answer ✔✔= accounting profit - opportunity cost
Basic Principles compromising effective management - correct answer ✔✔-Identifying goals and
constraints
-Recognize the nature and importance of profits
-Understand incentives
-Understand markets
-Recognize the time value of money
-Use marginal Analysis
The three rivalries in economic transactions - correct answer ✔✔Consumer - producer rivalry
Consumer - consumer rivalry
Producer - producer rivalry
Which of the following is among the 5 forces that impact the sustainability of industry profits according
to Michael Porter
1. Entry
2. Firm Size
3. Power of Buyers
4. Industry Rivals - correct answer ✔✔1. Entry
, 3. Power of Buyers
4. Industry Rivals
True of false: managerial economics includes the analysis of household decisions making - correct
answer ✔✔True
Law of Demand - correct answer ✔✔As price goes up, quantity demanded goes down.
As price goes down, quantity demanded goes up.
Movement along the demand curve is called - correct answer ✔✔change in quantity demanded
A rightward shift in demand:
A leftward shift in demand: - correct answer ✔✔Increases demand
Decreases Demand
What are the demand shifters - correct answer ✔✔Income
Price of related goods
Advertising/Tastes
Population
Consumer Expectations
Normal goods vs inferior goods - correct answer ✔✔Normal good: Good whose demand increases when
consumer income increases
Inferior good: Good whose demand increases as consumer income decreases
"substitute" vs. "complementary" goods - correct answer ✔✔Substitutes goods: when the INCREASE of
the price for one goods increases the demand for the other good
Complement goods: when the REDUCTION of the price of on good increases the demand for another
