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Managerial Economics MCQ

Is monopolistic competition efficient? monopolistic competition might be efficient if _______.

The loss that arises because the quantity produced is less than the efficient quantity is offset by the gain that arises from having a greater degree of product variety

New firms enter, and the demand for the good produced by each firm decreases until price equals average total cost

Product quality, price, and marketing; are free to enter and exit

Other firms will enter the market and demand for clubs made by Callaway will decrease

Answer

Correct Answer: The loss that arises because the quantity produced is less than the efficient quantity is offset by the gain that arises from having a greater degree of product variety

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In figure 8.3 below, the minimum of the atc curve is where _________ = mc.

Economic

2400

Answer

Correct Answer: MC

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In figure 8.3 above, the maximum profit output is at quantity of ________ .

2.0

4.0

6.0

8.0

Answer

Correct Answer: 8.0

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In figure 8.3 above at the profit maximizing output, the total revenue is $ __________.

1400

2400

3600

4800

Answer

Correct Answer: 2400

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A coupon purchaser is _______ sensitive, but time insensitive.

Superfior

Price

Inelastic

Proportional

Answer

Correct Answer: Price

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____________ tells a firm whether it can earn profits given the price in the market.

Average marginal cost

Total cost

Average cost

Marginal cost

Answer

Correct Answer: Average cost

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The location of a firm will be a _ factor of production in run.

Variable;the short

Fixed;both the short and long

Variable;the long

Fixed;the long

Answer

Correct Answer: Variable;the long

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The initial fee to open a jimmy johns for franchise buyers is __________.

$35,000

$31500

$2500

$35000

Answer

Correct Answer: $35,000

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One can determine the consumers surplus if the _______________ are known

Maximum buying price and price paid

Shortage, upward

A deadweight loss

Maximum price above which legal trades cannot be made.

Answer

Correct Answer: Maximum buying price and price paid

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Oligopoly firms acting individually may seek to gain profits ___________________________ .

By expanding levels of output and cutting prices

By selling products that are distinctive in some way

By having a mini-monopoly on a particular brand name

By having a mini-monopoly or through tough competition

Answer

Correct Answer: By expanding levels of output and cutting prices

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Markup is the amount by which price _____ cost.

Exceeds marginal.

Is less than average.

Exceeds average.

Is less than marginal.

Answer

Correct Answer: Exceeds marginal.

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Labor, materials, and energy are typically __________ costs.

Sacrifice

Variable

Sales-oriented

None of these

Answer

Correct Answer: Variable

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A monopoly can price discriminate between two groups of consumers if _______ across the two groups.

A different willingness to pay

Converts consumers surplus into economic profit

Economies of scale

Exceeds the percentage increase in all inputs

Answer

Correct Answer: A different willingness to pay

Note: This Question is unanswered, help us to find answer for this one

The level of an economic activity should be increased to the point where the ____ is zero.

Marginal cost.

Average cost.

Net marginal cost

None of these.

Answer

Correct Answer: Marginal cost.

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Valueminustotal cost = ________.

True

False

Answer

Correct Answer: True

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Because of market forces, firms have ________ when competition is widespread.

Little or no control over the price that they can charge and they make negative economic profit

Little or no control over the price that they can charge and they make little or no economic profit

Little or no control over the price that they can charge and they make extreme economic profits

Control over the price that they can charge and they make little or no economic profit

Control over the price that they can charge and they make positive economic profit

Answer

Correct Answer: Little or no control over the price that they can charge and they make little or no economic profit

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A firm's total revenue is the _ of its output multiplied by the _.

Price; number of units of output sold

Enter; rightward

Raises its price; customers

None of these

Answer

Correct Answer: Price; number of units of output sold

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There are ________ accounting periods per fiscal year in a typical restaurant.

Answer

Correct Answer: 13

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__________ is based on a buyers perceptions of value rather than on the sellers cost.

Value-added pricing

Good-value pricing

Price

Answer

Correct Answer:

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Fixed costs are important because, at least in the _, the firm _____.

Increasing returns to scale

Decreasing returns to scale

Short run; cannot alter them

Diminishing marginal returns

Answer

Correct Answer: Short run; cannot alter them

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When there is excess demand, there is _____.

Downward pressure on price because buyers are not willing to pay more.

Upward pressure on price because buyers are willing to pay more.

Downward pressure on price because buyers are willing to pay more.

Upward pressure on price because buyers are not willing to pay more.

Answer

Correct Answer: Upward pressure on price because buyers are willing to pay more.

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Refer to the data. at 6 units of output, total fixed cost is and total cost is .

$10; $30

$150; $300

$10; $300

$150; $100

Answer

Correct Answer: $150; $300

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Price discrimination leads to a _ price for consumers with a _ demand.

Lower; less elastic

Higher; more elastic

Lower; more elastic

Higher; less elastic

Answer

Correct Answer: Lower; more elastic

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One defining characteristic of pure monopoly is that the _____.

Monopoly is a price taker

Monopoly produces a product with no close substitutes

Entry into the industry is relatively easy, but exit is difficult

Monopoly uses advertising

Answer

Correct Answer: Monopoly produces a product with no close substitutes

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Monopolistic competition might be efficient if _______.

The loss that arises

The loss that not arises

A downward-sloping

Product quality is increased

Answer

Correct Answer: The loss that arises

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Marginal utility is the satisfaction gained by consuming of a good.

Total; all units

Total; one more unit

Additional; all units

Additional; one more unit

Answer

Correct Answer: Additional; one more unit

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Marginal revenue (mr) is ____ when total revenue is maximized.

Greater than one

Equal to one

Less than zero

Equal to zero

Equal to minus one

Answer

Correct Answer: Equal to zero

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At a quantity of 130, marginal benefit equals __ and marginal cost equals _.

$1.60, $0.50

$3.60, $0.50

$1.60, $6.50

$1.80, $0.10

Answer

Correct Answer: $1.60, $0.50

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To cool off an inflationary economy, a government might ________.

Lower interest rates

Raise interest rates

Lower foreign exchange rates

Raise foreign exchange rates

Answer

Correct Answer: Raise interest rates

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When ford decides to increase production of hybrid cars, it directly answers the ________ question.

What.

How.

For whom.

Where

Answer

Correct Answer: What.

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The demand for all carbonated beverages is likely to be ________ the demand for dr. pepper.

More elastic than

Perfectly elastic compared to

Less elastic than

Perfectly inelastic compared to

Answer

Correct Answer: Less elastic than

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The amount of money charged for a product is its __________.

Price

Cost

Profit

Revenue

Breakeven point

Answer

Correct Answer: Price

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Profits are equal to the difference between _ and _.

Total revenue; total costs

Total revenue; explicit costs

Marginal revenue; marginal costs

Total revenue; marginal costs

Answer

Correct Answer: Total revenue; total costs

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For most products, a decrease in price will _______ value.

Increase

Have no effect on

Decrease

Answer

Correct Answer: Increase

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Economic costs are the sum of _ and _.

Explicit costs; implicit costs

Implicit costs; explicit costs

Increases; increases

None of these

Answer

Correct Answer: Explicit costs; implicit costs

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Two external factors which must be considered in pricing decisions are __________.

Demand and the nature of the market

Balanced budget.

Contractionary fiscal policy.

Discretionary fiscal policy

Answer

Correct Answer: Demand and the nature of the market

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Overhead costs ________ as the number of units produced increases.

Decrease

Increase steadily

Fluctuate

Remain the same

Increase rapidly

Answer

Correct Answer: Remain the same

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Internal factors that affect pricing include __________.

The company's overall marketing strategy, the nature of the market, and demand.

The company's overall marketing strategy, objectives, and marketing mix

The company's overall marketing strategy, objectives, and the nature of the market

The nature of the market, demand, and the economy.

The company's overall marketing strategy, objectives, and demand

Answer

Correct Answer: The company's overall marketing strategy, objectives, and marketing mix

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By finding the total cost and dividing by the number of units produced ______________ are found.

Average or per unit costs

Good Choices

Law of Diminishing Returns

Marginal Product

Answer

Correct Answer: Average or per unit costs

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(table 6.3) this table illustrates a _ production function because capital and labor _.

Long run, are both same

Short-run; can be varied

Long-run, can both be varied

Short-run, are both same

Answer

Correct Answer: Long-run, can both be varied

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__________ is the third step in value-based pricing.

Determining costs that can be incurred

Designing products to deliver the desired value at a target price

Assessing the customer needs and value perceptions

Setting a target price to match the customer's perceived value

Answer

Correct Answer: Determining costs that can be incurred

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______ is the most flexible element of the marketing mix.

Place

Positioning

Product

Price

Answer

Correct Answer: Price

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A firm should _ output whenever mr exceeds mc because _.

Reduce; total revenues exceed total costs

Reduce; revenues will rise by more than costs, increasing the firm's profit

Not change; selling more output will increase marginal revenue by less than marginal cost

Expand; revenues will rise by more than costs, increasing the firm's profit

Answer

Correct Answer: Expand; revenues will rise by more than costs, increasing the firm's profit

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________ refers to the sale of two or more goods or services as a single package for one price.

Two-part pricing

Captive pricing

Price bundling

List pricing

Everyday low pricing

Answer

Correct Answer: Price bundling

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________ describes how responsive demand will be to a change in price.

Price elasticity

Break-even pricing

The break-even chart

Target costing

Answer

Correct Answer: Price elasticity

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As a manufacturer increases the price, ________.

Target

Break-even volume

Cost-plus pricing

Total cost

Profit margin

Answer

Correct Answer: Break-even volume

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A total product curve indicates the relationship between _____ when all other inputs are fixed.

A variable input and output

Output and price

A variable input and price

A variable input and variable cost

Answer

Correct Answer: A variable input and price

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In the short run, a monopolistically competitive firm ______.

May incur an economic loss

Will leave the industry if it is incurring an economic loss

Either earns an economic profit or breaks even

Incurs an economic loss if it fails to produce the quantity at which marginal revenue equals marginal cost

Answer

Correct Answer: Incurs an economic loss if it fails to produce the quantity at which marginal revenue equals marginal cost

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Profits equal _______.

Total revenue minus marginal cost

Total revenue minus total cost

Marginal revenue minus marginal cost

Total revenue minus capital costs

Answer

Correct Answer: Total revenue minus total cost

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Marginal product becomes negative with the hiring of the __________ unit of labor.

One

Third

Seventh

Second

Answer

Correct Answer: Seventh

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In figure 6.3 above the minimum of the atc and the avc curves are at the intercept with _________.

Fixed Cost(FC)

Average Cost(AC)

Marginal Cost(MC)

None of the above

Answer

Correct Answer: Marginal Cost(MC)

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When the long run average cost (lrac) curve is horizontal, it implies there are ________.

Diseconomies of scale

Constant returns to scale

Increasing returns to scale

Decreasing returns to scale

Answer

Correct Answer: Constant returns to scale

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When demand increases, equilibrium price will rise ____ when supply is _ elastic.

More, less

Less, more

Less, less

More, more

Answer

Correct Answer: More, less

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The demand curve faced by a nondiscriminating pure monopoly is _____.

Derived by vertically summing the buyers' individual demand curves

The same as the industry's demand curve

Horizontal

More elastic than the demand

Answer

Correct Answer: The same as the industry's demand curve

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Perfect competition achieves efficiency if the market produces the quantity at which _______.

Producer surplus equals zero

Consumer surplus is greater than producer surplus

Marginal benefit is greater than marginal cost

The consumers' marginal benefit from the good equals the marginal cost of producing it

Answer

Correct Answer: The consumers' marginal benefit from the good equals the marginal cost of producing it

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In the short run, firms in the market _. in the long run, some firms _ the market.

Experience economic loss;exiting

Exiting;experience economic loss

Experience economic gain; entering

Entering;Experience economic gain

Answer

Correct Answer: Experience economic loss;exiting

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The balanced scorecard approach to control ____.

Places greatest priority on the most important aspect of control, the financial perspective

Maximizes the chances of suboptimization

Only looks at factors within a company’s controllable environment such as innovation and learningminimizes the chances of optimization

Forces managers at each level of the company to set specific goals and measure performance in each of four areas

Answer

Correct Answer: Forces managers at each level of the company to set specific goals and measure performance in each of four areas

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Two forms of demand-based pricing are ________.

Testimonial

Target costing and yield management pricing

Fixed costs

Target costing

Percentage-of-sales

Answer

Correct Answer: Target costing and yield management pricing

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The output at which average product is a maximum is the same output at which ______ is a minimum.

Average fixed cost

Average variable cost

Average total cost

Marginal cost

Answer

Correct Answer: Average variable cost

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The predetermined overhead allocation rate for a given production year is calculated ________.

At the end of the production year

Before the production year begins

After completion of each job

After the preparation of financial statements for the year

Answer

Correct Answer: Before the production year begins

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Economists usually assume that is a fixed input in the run.

Capital, short

Short, capital

Labor, short

Capital, capital

Answer

Correct Answer: Capital, short

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As a manufacturer increases price, the ________ drops.

Target

Break-even volume

Cost-plus pricing

Total cost

Profit margin

Answer

Correct Answer: Break-even volume

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When deciding whether to discontinue a segment of a business, relevant costs include ________.

Fixed supervision costs that can be eliminated

Variable marketing costs per unit of product sold

Cost of goods sold

All of these

Answer

Correct Answer: All of these

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Along a linear demand curve, the slope while the price elasticity of demand .

Is constant; is constant

Changes from one point to another; is constant

Is constant; changes from one point to another

None of the above

Answer

Correct Answer: Is constant; changes from one point to another

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On a break-even chart, the break-even volume is located __________.

At the intersection of total revenue and variable costs

At the intersection of target profit and total costs

At the intersection of total revenue and total costs

At the intersection of total revenue and target profit

At the intersection of total revenue and fixed costs

Answer

Correct Answer: At the intersection of total revenue and total costs

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Marginal cost is average variable cost when .

A market demand curve is / demand curve

As output increases, in the short run,

Diminishing returns at the output

Equal to; average variable cost is minimized

Answer

Correct Answer: Equal to; average variable cost is minimized

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The income elasticity of demand for a normal good is _ and for an inferior good is __.

negative; positive

positive; negative

negative; negative

positive; positive

Answer

Correct Answer: positive; negative

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The monopolistically competitive firm sells _ product and faces _ demand curve.

A differentiated; a horizontal

A homogeneous; a downward-sloping

A differentiated; a downward-sloping

A homogeneous; a horizontal

Answer

Correct Answer: A differentiated; a downward-sloping

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When opportunity cost is positive, economic profit ______ accounting profit.

-eliminates

-equals

-is less than

-is greater than

Answer

Correct Answer: -is less than

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The term _____________ is used to describe the additional cost of producing one more unit.

Average cost.

Fixed cost.

Variable cost.

Marginal

Answer

Correct Answer: Marginal

Note: This Question is unanswered, help us to find answer for this one

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Managerial Economics MCQ

Is monopolistic competition efficient? monopolistic competition might be efficient if _______.

In figure 8.3 below, the minimum of the atc curve is where _________ = mc.

In figure 8.3 above, the maximum profit output is at quantity of ________ .

In figure 8.3 above at the profit maximizing output, the total revenue is $ __________.

A coupon purchaser is _______ sensitive, but time insensitive.

____________ tells a firm whether it can earn profits given the price in the market.

The location of a firm will be a _________ factor of production in ________ run.

The initial fee to open a jimmy johns for franchise buyers is __________.

One can determine the consumers surplus if the _______________ are known

Oligopoly firms acting individually may seek to gain profits ___________________________ .

Markup is the amount by which price _____ cost.

Labor, materials, and energy are typically __________ costs.

A monopoly can price discriminate between two groups of consumers if _______ across the two groups.

The level of an economic activity should be increased to the point where the ____ is zero.

Valueminustotal cost = ________.

Because of market forces, firms have ________ when competition is widespread.

A firm's total revenue is the _____ of its output multiplied by the _____.

There are ________ accounting periods per fiscal year in a typical restaurant.

__________ is based on a buyers perceptions of value rather than on the sellers cost.

Fixed costs are important because, at least in the ___________, the firm _______________.

When there is excess demand, there is _____.

Refer to the data. at 6 units of output, total fixed cost is ____ and total cost is ____.

Price discrimination leads to a _____ price for consumers with a _____ demand.

One defining characteristic of pure monopoly is that the _____.

Monopolistic competition might be efficient if _______.

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

Marginal revenue (mr) is ____ when total revenue is maximized.

At a quantity of 130, marginal benefit equals ______ and marginal cost equals _____.

To cool off an inflationary economy, a government might ________.

When ford decides to increase production of hybrid cars, it directly answers the ________ question.

The demand for all carbonated beverages is likely to be ________ the demand for dr. pepper.

The amount of money charged for a product is its __________.

Profits are equal to the difference between _____ and _____.

For most products, a decrease in price will _______ value.

Economic costs are the sum of _____ and _____.

Two external factors which must be considered in pricing decisions are __________.

Overhead costs ________ as the number of units produced increases.

Internal factors that affect pricing include __________.

By finding the total cost and dividing by the number of units produced ______________ are found.

(table 6.3) this table illustrates a _____ production function because capital and labor _____.

__________ is the third step in value-based pricing.

______ is the most flexible element of the marketing mix.

A firm should _____ output whenever mr exceeds mc because _____.

________ refers to the sale of two or more goods or services as a single package for one price.

________ describes how responsive demand will be to a change in price.

As a manufacturer increases the price, ________.

A total product curve indicates the relationship between _____ when all other inputs are fixed.

In the short run, a monopolistically competitive firm ______.

Profits equal _______.

Marginal product becomes negative with the hiring of the __________ unit of labor.

In figure 6.3 above the minimum of the atc and the avc curves are at the intercept with _________.

When the long run average cost (lrac) curve is horizontal, it implies there are ________.

When demand increases, equilibrium price will rise ____________ when supply is _________ elastic.

The demand curve faced by a nondiscriminating pure monopoly is _____.

Perfect competition achieves efficiency if the market produces the quantity at which _______.

In the short run, firms in the market _______. in the long run, some firms _______ the market.

The balanced scorecard approach to control ____.

Two forms of demand-based pricing are ________.

The output at which average product is a maximum is the same output at which ______ is a minimum.

The predetermined overhead allocation rate for a given production year is calculated ________.

Economists usually assume that ________ is a fixed input in the ________ run.

As a manufacturer increases price, the ________ drops.

When deciding whether to discontinue a segment of a business, relevant costs include ________.

Along a linear demand curve, the slope __________ while the price elasticity of demand __________.

On a break-even chart, the break-even volume is located __________.

Marginal cost is ________ average variable cost when ________.

The income elasticity of demand for a normal good is _____ and for an inferior good is ______.

The monopolistically competitive firm sells _________ product and faces _________ demand curve.

When opportunity cost is positive, economic profit ______ accounting profit.

The term _____________ is used to describe the additional cost of producing one more unit.

The location of a firm will be a _ factor of production in run.

A firm's total revenue is the _ of its output multiplied by the _.

Fixed costs are important because, at least in the _, the firm _____.

Refer to the data. at 6 units of output, total fixed cost is and total cost is .

Price discrimination leads to a _ price for consumers with a _ demand.

Marginal utility is the satisfaction gained by consuming of a good.

At a quantity of 130, marginal benefit equals __ and marginal cost equals _.

Profits are equal to the difference between _ and _.

Economic costs are the sum of _ and _.

(table 6.3) this table illustrates a _ production function because capital and labor _.

A firm should _ output whenever mr exceeds mc because _.

When demand increases, equilibrium price will rise ____ when supply is _ elastic.

In the short run, firms in the market _. in the long run, some firms _ the market.

Economists usually assume that is a fixed input in the run.

Along a linear demand curve, the slope while the price elasticity of demand .

Marginal cost is average variable cost when .

The income elasticity of demand for a normal good is _ and for an inferior good is __.

The monopolistically competitive firm sells _ product and faces _ demand curve.