HBX Economics for Managers Questions and
Answers (100% Correct Answers) Already
Graded A+
Accounting Costs [ Ans: ] A measure of the direct cost
incured in partaking in a specific business endeavor; cost
reported in a company's financial statements that serve to
give an accurate description of where the firm's money is
being spent.
Advertising Elasticity of Demand (AED) [ Ans: ] A measure
of the responsiveness of a consumer demand for one
product or service to change in advertising expenditures
for that product or service; mathematically calculated as
the percentage change in quantity demanded for product
X, divided by the percentage change in advertising
devoted to product X.
Auction [ Ans: ] A process of buying/selling products and
services in which items are bid on and then sold to the
ultimate buyer at a price determined by the bids gathered.
Average Revenue [ Ans: ] The revenues received per unit
sold; mathematically, the total revenues for a business,
divided by the total volume of goods sold; average
revenue is equal to price unless there is a price
discrimination.
Average Total Cost (ATC) [ Ans: ] The costs incurred in
producing a product per unit of the product sold;
,mathematically, the total costs for a business, divided by
the total volume of units produced.
Barriers to Entry [ Ans: ] Obstacles that prevent a firm
from entering a specific market; barriers to entry can exist
naturally within markets for specific products or services,
can be created by the government, or be created by firms
already in that market to keep out competition.
Bid [ Ans: ] The offer to purchase a good or service at a
particular price submitted by a potential buyer in an
auction.
Bundling [ Ans: ] The pairing of different goods to be sold
together; price bundling is a form of price discrimination.
Capital [ Ans: ] Factors of production, such as machinery,
equipment, factories, IT, money, etc. owned by a business;
capital (which does not include land) is distinct from labor
services.
Competition [ Ans: ] The relative presence of firms in a
market for a product or service; the more competition this
is in a market, the more likely that price in the market will
be low (close to firms' marginal cost of production).
Competitive Advantage [ Ans: ] A firm's ability to earn
profits by creating value in a unique way; a firm can gain
advantage over it's competitors by offering lower prices
(via lower costs of production) or providing customers
with differentiated products or services that justify higher
prices.
, Complement [ Ans: ] A product or service that can
increase willingness to pay for another product or service;
mathematically, the combined WTP for two products that
are complements is higher than the sum of the WTP for
each individual product. (i.e. you'd be willing to pay more
for both PB and J together than seperately).
Confirmation Bias [ Ans: ] The tenancy to look for, notice
and favor information that confirms one's pre-conceived
notions or beliefs, while also discounting information that
goes again one's beliefs; helps explain why investor can be
overconfident, politicians might cherry-pick pieces of
evidence to support their own stances, or scientists may
come to wrong conclusions by only searching for evidence
that supports their hypothesis
Conjoint Analysis [ Ans: ] A form of market research based
on the principle that a product can be broken down into a
set of consumer-relevant attributes; a specialized survey
design, which determines consumers' preferences for
individual features of a product by first ranking the
importance of features and then assigning values to each
product attribute based on those features.
Consumer Surplus [ Ans: ] The value captured by
consumers in a market transaction; mathematically, the
difference between consumer willingness to pay and price
added to all consumers who get to transact the market.
Cost-Plus Pricing [ Ans: ] A method of setting prices in
which a company bases its prices on its cost of production
Answers (100% Correct Answers) Already
Graded A+
Accounting Costs [ Ans: ] A measure of the direct cost
incured in partaking in a specific business endeavor; cost
reported in a company's financial statements that serve to
give an accurate description of where the firm's money is
being spent.
Advertising Elasticity of Demand (AED) [ Ans: ] A measure
of the responsiveness of a consumer demand for one
product or service to change in advertising expenditures
for that product or service; mathematically calculated as
the percentage change in quantity demanded for product
X, divided by the percentage change in advertising
devoted to product X.
Auction [ Ans: ] A process of buying/selling products and
services in which items are bid on and then sold to the
ultimate buyer at a price determined by the bids gathered.
Average Revenue [ Ans: ] The revenues received per unit
sold; mathematically, the total revenues for a business,
divided by the total volume of goods sold; average
revenue is equal to price unless there is a price
discrimination.
Average Total Cost (ATC) [ Ans: ] The costs incurred in
producing a product per unit of the product sold;
,mathematically, the total costs for a business, divided by
the total volume of units produced.
Barriers to Entry [ Ans: ] Obstacles that prevent a firm
from entering a specific market; barriers to entry can exist
naturally within markets for specific products or services,
can be created by the government, or be created by firms
already in that market to keep out competition.
Bid [ Ans: ] The offer to purchase a good or service at a
particular price submitted by a potential buyer in an
auction.
Bundling [ Ans: ] The pairing of different goods to be sold
together; price bundling is a form of price discrimination.
Capital [ Ans: ] Factors of production, such as machinery,
equipment, factories, IT, money, etc. owned by a business;
capital (which does not include land) is distinct from labor
services.
Competition [ Ans: ] The relative presence of firms in a
market for a product or service; the more competition this
is in a market, the more likely that price in the market will
be low (close to firms' marginal cost of production).
Competitive Advantage [ Ans: ] A firm's ability to earn
profits by creating value in a unique way; a firm can gain
advantage over it's competitors by offering lower prices
(via lower costs of production) or providing customers
with differentiated products or services that justify higher
prices.
, Complement [ Ans: ] A product or service that can
increase willingness to pay for another product or service;
mathematically, the combined WTP for two products that
are complements is higher than the sum of the WTP for
each individual product. (i.e. you'd be willing to pay more
for both PB and J together than seperately).
Confirmation Bias [ Ans: ] The tenancy to look for, notice
and favor information that confirms one's pre-conceived
notions or beliefs, while also discounting information that
goes again one's beliefs; helps explain why investor can be
overconfident, politicians might cherry-pick pieces of
evidence to support their own stances, or scientists may
come to wrong conclusions by only searching for evidence
that supports their hypothesis
Conjoint Analysis [ Ans: ] A form of market research based
on the principle that a product can be broken down into a
set of consumer-relevant attributes; a specialized survey
design, which determines consumers' preferences for
individual features of a product by first ranking the
importance of features and then assigning values to each
product attribute based on those features.
Consumer Surplus [ Ans: ] The value captured by
consumers in a market transaction; mathematically, the
difference between consumer willingness to pay and price
added to all consumers who get to transact the market.
Cost-Plus Pricing [ Ans: ] A method of setting prices in
which a company bases its prices on its cost of production
