ACCURACY IS GUARANTEED
Managerial Economics Questions with Detailed
Verified Answers for Accuracy
When it comes to determining where resources are most highly
valued by society, profits play the role of a
✓✓ signal
t/F: managerial economics includes analysis of household
decision making
✓✓ true
by pursuing self interest (maximizing profits), a firm tends to
✓✓ meet the needs of society
a manager
✓✓ directs resources to achieve a stated goal
economics
✓✓ the science of making decisions in the face of scarce
resources
resource
✓✓ anything used to produce a good or service
not having appropriate technology or rising input prices is an
example of a _____
, ACCURACY IS GUARANTEED
✓✓ constraint
accounting profits
✓✓ total amount made minus the cost of production
economic profits
✓✓ total revenue - opportunity cost
opportunity cost
✓✓ explicit (accounting) cost and the implicit cost of giving up
the best alternative use of the resource
opportunity cost is generally _______ than accounting costs
✓✓ higher
what are the 5 forces of framework and industry profit
✓✓ 1. entry
2. power of input suppliers
3. power of buyers
4. industry rivalry
5. substitutes and compliments
time value of money
, ACCURACY IS GUARANTEED
✓✓ it is better to have $1 today than $1 in the future;
opportunity cost is the interest that could have been earned on
the dollar in present day
present value
✓✓ the amout that would have to be invested today at the
prevailing interest rate to generate the given future value
present value =
✓✓ future value / (1+interest)^years
net present value
✓✓ present value of the income stream minus the current costs
if the net present value is positive, then the project is ____
✓✓ profitable
profit maximization
✓✓ maximizing profits means maximizing the value of the
firm, which is the present value of the current and future profits
if the growth rate of profits is _____ than the interest rate,
and those remain _____, then maximizing current profits,
maximizes long term profits
✓✓ less than ; constant
Managerial Economics Questions with Detailed
Verified Answers for Accuracy
When it comes to determining where resources are most highly
valued by society, profits play the role of a
✓✓ signal
t/F: managerial economics includes analysis of household
decision making
✓✓ true
by pursuing self interest (maximizing profits), a firm tends to
✓✓ meet the needs of society
a manager
✓✓ directs resources to achieve a stated goal
economics
✓✓ the science of making decisions in the face of scarce
resources
resource
✓✓ anything used to produce a good or service
not having appropriate technology or rising input prices is an
example of a _____
, ACCURACY IS GUARANTEED
✓✓ constraint
accounting profits
✓✓ total amount made minus the cost of production
economic profits
✓✓ total revenue - opportunity cost
opportunity cost
✓✓ explicit (accounting) cost and the implicit cost of giving up
the best alternative use of the resource
opportunity cost is generally _______ than accounting costs
✓✓ higher
what are the 5 forces of framework and industry profit
✓✓ 1. entry
2. power of input suppliers
3. power of buyers
4. industry rivalry
5. substitutes and compliments
time value of money
, ACCURACY IS GUARANTEED
✓✓ it is better to have $1 today than $1 in the future;
opportunity cost is the interest that could have been earned on
the dollar in present day
present value
✓✓ the amout that would have to be invested today at the
prevailing interest rate to generate the given future value
present value =
✓✓ future value / (1+interest)^years
net present value
✓✓ present value of the income stream minus the current costs
if the net present value is positive, then the project is ____
✓✓ profitable
profit maximization
✓✓ maximizing profits means maximizing the value of the
firm, which is the present value of the current and future profits
if the growth rate of profits is _____ than the interest rate,
and those remain _____, then maximizing current profits,
maximizes long term profits
✓✓ less than ; constant
