Managerial Economics & Business Strategy 10th Edition by Michael Baye Test bank
1.
Award: 1.00 point
2.
Award: 1.00 point
The higher the interest rate,
the greater the present value of a future amount.
the smaller the present value of a future amount.
the greater the level of inflation.
the smaller the level of inflation.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-05 Apply present value
analysis to make decisions and value assets.
If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000 at the end of year two,
then the present value of these cash flows is
$2,562.
$3,200.
$439.
$3,000.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-05 Apply present value
analysis to make decisions and value assets.
3.
Award: 1.00 point
4.
Award: 1.00 point
Accounting profits are
total revenue minus total cost.
total cost minus total revenue.
marginal revenue minus total cost.
total revenue minus marginal cost.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
Economic profits are
total revenue minus total cost.
marginal revenue minus marginal cost.
total revenue minus total opportunity cost.
total profits of the economy as a whole.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
5.
Award: 1.00 point
6.
Award: 1.00 point
Which of the following is an implicit cost to a firm that produces a good or service?
labor costs
costs of operating production machinery
foregone profits of producing a different good or service
costs of renting or buying land for a production site
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Which of the following is an implicit cost to a firm that produces a good or service?
Foregone interest of using money that could have been kept in bank.
Labor costs.
Costs of operating production machinery.
Costs of renting or buying land for a production site.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
7.
Award: 1.00 point
8.
Award: 1.00 point
Which of the following is an implicit cost of going to college?
tuition
cost of books and supplies
room and board
foregone wages
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Which of the following are signals to the owners of scarce resources about the best uses of those resources?
profits of businesses
government regulations
economic indicators
the accounting cost of those resources
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-03 Explain the role of
profits in a market economy.
9.
Award: 1.00 point
10.
Award: 1.00 point
The primary inducement for new firms to enter an industry is
increased technology.
availability of labor.
low capital costs.
presence of economic profits.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-03 Explain the role of
profits in a market economy.
As more firms enter an industry,
accounting profits increase.
economic profits decrease.
prices rise.
costs rise.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-04 Apply the five forces
framework to analyze the sustainability of an
industry's profits.
11.
Award: 1.00 point
12.
Award: 1.00 point
Scarce resources are ultimately allocated toward the production of goods most wanted by society because
firms attempt to maximize profits.
they are not efficiently utilized in these areas.
consumers demand inexpensive goods and services.
managers are benevolent.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-03 Explain the role of
profits in a market economy.
The opportunity cost of receiving $10 in the future as opposed to getting that $10 today is
Award: 1.00 point
2.
Award: 1.00 point
The higher the interest rate,
the greater the present value of a future amount.
the smaller the present value of a future amount.
the greater the level of inflation.
the smaller the level of inflation.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-05 Apply present value
analysis to make decisions and value assets.
If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000 at the end of year two,
then the present value of these cash flows is
$2,562.
$3,200.
$439.
$3,000.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-05 Apply present value
analysis to make decisions and value assets.
3.
Award: 1.00 point
4.
Award: 1.00 point
Accounting profits are
total revenue minus total cost.
total cost minus total revenue.
marginal revenue minus total cost.
total revenue minus marginal cost.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
Economic profits are
total revenue minus total cost.
marginal revenue minus marginal cost.
total revenue minus total opportunity cost.
total profits of the economy as a whole.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
5.
Award: 1.00 point
6.
Award: 1.00 point
Which of the following is an implicit cost to a firm that produces a good or service?
labor costs
costs of operating production machinery
foregone profits of producing a different good or service
costs of renting or buying land for a production site
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Which of the following is an implicit cost to a firm that produces a good or service?
Foregone interest of using money that could have been kept in bank.
Labor costs.
Costs of operating production machinery.
Costs of renting or buying land for a production site.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
7.
Award: 1.00 point
8.
Award: 1.00 point
Which of the following is an implicit cost of going to college?
tuition
cost of books and supplies
room and board
foregone wages
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Which of the following are signals to the owners of scarce resources about the best uses of those resources?
profits of businesses
government regulations
economic indicators
the accounting cost of those resources
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-03 Explain the role of
profits in a market economy.
9.
Award: 1.00 point
10.
Award: 1.00 point
The primary inducement for new firms to enter an industry is
increased technology.
availability of labor.
low capital costs.
presence of economic profits.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-03 Explain the role of
profits in a market economy.
As more firms enter an industry,
accounting profits increase.
economic profits decrease.
prices rise.
costs rise.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-04 Apply the five forces
framework to analyze the sustainability of an
industry's profits.
11.
Award: 1.00 point
12.
Award: 1.00 point
Scarce resources are ultimately allocated toward the production of goods most wanted by society because
firms attempt to maximize profits.
they are not efficiently utilized in these areas.
consumers demand inexpensive goods and services.
managers are benevolent.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-03 Explain the role of
profits in a market economy.
The opportunity cost of receiving $10 in the future as opposed to getting that $10 today is