TEST BANK FOR Managerial Economics, 9th Edition William F. Samuelson, Stephen G. Marks, Jay L. Zagorsky All Chapters || Verified Solution.

TEST BANK FOR Managerial Economics, 9th Edition William
m m m m m m mm




m F. Samuelson, Stephen G. Marks, Jay L. Zagorsky
m m m m m m mm




File: Ch01; CHAPTER 1: Introduction to Economic Decision Making
m m m m m m m m




m MULTIPLE CHOICE
m




1. Managerial economics can best be defined as the:
m m m m m m m




a) macroeconomics and microeconomics for managers. m m m m




b) study of economic incentives on consumer behavior and demand.
m m m m m m m m




c) analysis of the labor market through the behavior of workers and managers.
m m m m m m m m m m m




d) analysis of major management decisions using economic tools.
m m m m m m m




e) study of the strategic interaction between firms in a market.
m m m m m m m m m




ANSWER: d m




SECTION REFERENCE: Introduction
m m




m DIFFICULTY LEVEL: Easy m m




2. Which of the following is not one of the steps in managerial decision making?
m m m m m m m m m m m m m




a) Predicting the consequences of a decision.
m m m m m




b) Exploring the alternatives to the decision.
m m m m m




c) Defining the problem and the objectives of the decision.
m m m m m m m m




d) Negotiating a consensus to implement the decision.
m m m m m m




e) Performing sensitivity analysis. m m




ANSWER: d m




SECTION REFERENCE: Six Steps to Decision Making DIFFICULTY
m m m m m m m




m LEVEL: Easy
m




1-1

,3. Profit maximization is an ambiguous guide to decision making in the private sector because:
m m m m m m m m m m m m m




a) firms in the private sector usually do not aim at profit maximization.
m m m m m m m m m m m




b) the goal of profit maximization contradicts the goal of satisfying the firm‘s shareholders.
m m m m m m m m m m m m




c) of the presence of risk and uncertainty.
m m m m m m




d) profit-maximization ignores social costs and benefits.
m m m m m




e) None of the above answers is correct.
m m m m m m




ANSWER: c m




SECTION REFERENCE: Six Steps to Decision Making DIFFICULTY
m m m m m m m




LEVEL: Easy
m m




1-2

,4. Which of the following is true of economic models?
m m m m m m m m




a) Models are too theoretical to be applicable in real world decisions.
m m m m m m m m m m




b) Models are not useful because uncertainty prevents accurate forecasts.
m m m m m m m m




c) Models are simplified descriptions of processes, relationships, or other phenomena.
m m m m m m m m m




d) Models describe real world situations in complete detail.
m m m m m m m




e) Models are not useful because they do not take into account complicating and
m m m m m m m m m m m m




less important features of a problem.
m m m m m m




ANSWER: c m




SECTION REFERENCE: Six Steps to Decision Making DIFFICULTY
m m m m m m m




LEVEL: Medium
m m




5. Which of the following correctly describes a deterministic economic model?
m m m m m m m m m




a) A deterministic model is a model for which the outcome is predicted with certainty.
m m m m m m m m m m m m m




b) A deterministic model can only be used to explain short-run economic phenomena.
m m m m m m m m m m m




c) A deterministic model is most useful in identifying long-term trends.
m m m m m m m m m




d) A deterministic model is used in the study of normative economics.
m m m m m m m m m m




e) The outcome of a deterministic model is random and has probabilities attached.
m m m m m m m m m m m




ANSWER: a m




SECTION REFERENCE: Six Steps to Decision Making DIFFICULTY
m m m m m m m




LEVEL: Easy
m m




6. Which of the following correctly explains a probabilistic model?
m m m m m m m m




a) A probabilistic model gives a description of real world economic phenomena.
m m m m m m m m m m




1-3

, b) A probabilistic model shows the possibility of a range of outcomes.
m m m m m m m m m m




c) A probabilistic model examines the changes in economic variables over a period of time.
m m m m m m m m m m m m m




d) A probabilistic model is based on value judgments.
m m m m m m m




e) A probabilistic model is used to explain long-run economic phenomena
m m m m m m m m m




ANSWER: b m




SECTION REFERENCE: Six Steps to Decision Making DIFFICULTY
m m m m m m m




LEVEL: Easy
m m




7. Maximizing profit by enumerating the profit outcomes of different courses of action
m m m m m m m m m m m




a) Is only applicable to problems with a small number of alternatives.
m m m m m m m m m m




b) Becomes increasingly costly as the number of choices increase.
m m m m m m m m




c) Always discovers the best possible choice.
m m m m m




1-4