Managerial Economics & Business Strategy 10th Edition by Michael Baye Test bank

References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
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 103.
Award: 1.00 point
[Appendix material: calculus required] Total benefits in the table are
Control variable Total Benefits Total Costs Net Benefits Marginal Benefit Marginal Cost Marginal Net Benefit
Q B(Q) C(Q) N(Q) MB(Q) MC(Q) MNB(Q)
0 0 0 0 − − −
1 900 100 800 900 100 800
2 1,700 300 C 800 200 600
3 2,400 600 1,800 700 E 400
4 A 1,000 2,000 600 400 200
5 3,500 1,500 2,000 500 500 F
6 3,900 2,100 1,800 D 600 −200
7 4,200 2,800 1,400 300 700 −400
8 4,400 B 800 200 800 −600
9 4,500 4,500 0 100 900 −800
10 4,500 5,500 −1,000 0 1,000 −1,000
increasing at a decreasing rate.
increasing at a constant rate.
decreasing at a constant rate.
 decreasing at an increasing rate.
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
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 104.
Award: 1.00 point
[Appendix material: calculus required] Total costs in the table are
Control variable Total Benefits Total Costs Net Benefits Marginal Benefit Marginal Cost Marginal Net Benefit
Q B(Q) C(Q) N(Q) MB(Q) MC(Q) MNB(Q)
0 0 0 0 − − −
1 900 100 800 900 100 800
2 1,700 300 C 800 200 600
3 2,400 600 1,800 700 E 400
4 A 1,000 2,000 600 400 200
5 3,500 1,500 2,000 500 500 F
6 3,900 2,100 1,800 D 600 −200
7 4,200 2,800 1,400 300 700 −400
8 4,400 B 800 200 800 −600
9 4,500 4,500 0 100 900 −800
10 4,500 5,500 −1,000 0 1,000 −1,000
decreasing at a constant rate.
decreasing at a decreasing rate.
increasing at a constant rate.
increasing at an increasing rate.
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
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 105.
Award: 1.00 point
Net benefits in the table
Control variable Total Benefits Total Costs Net Benefits Marginal Benefit Marginal Cost Marginal Net Benefit
Q B(Q) C(Q) N(Q) MB(Q) MC(Q) MNB(Q)
0 0 0 0 − − −
1 900 100 800 900 100 800
2 1,700 300 C 800 200 600
3 2,400 600 1,800 700 E 400
4 A 1,000 2,000 600 400 200
5 3,500 1,500 2,000 500 500 F
6 3,900 2,100 1,800 D 600 −200
7 4,200 2,800 1,400 300 700 −400
8 4,400 B 800 200 800 −600
9 4,500 4,500 0 100 900 −800
10 4,500 5,500 −1,000 0 1,000 −1,000
initially increase, reach a maximum, and then decrease.
initially decrease, reach a minimum, and then increase.
remain relatively stable over different values for the control variable.
initially remain relatively stable and then decrease.
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
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 106.
Award: 1.00 point
 107.
Award: 1.00 point
Marginal net benefits in the table
Control variable Total Benefits Total Costs Net Benefits Marginal Benefit Marginal Cost Marginal Net Benefit
Q B(Q) C(Q) N(Q) MB(Q) MC(Q) MNB(Q)
0 0 0 0 − − −
1 900 100 800 900 100 800
2 1,700 300 C 800 200 600
3 2,400 600 1,800 700 E 400
4 A 1,000 2,000 600 400 200
5 3,500 1,500 2,000 500 500 F
6 3,900 2,100 1,800 D 600 −200
7 4,200 2,800 1,400 300 700 −400
8 4,400 B 800 200 800 −600
9 4,500 4,500 0 100 900 −800
10 4,500 5,500 −1,000 0 1,000 −1,000
initially increase, reach a maximum, and then decrease.
initially decrease, reach a minimum, and then increase.
remain relatively stable over different values for the control variable.
decrease at a constant rate.
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
Compute the present value of a perpetual bond that pays a  monthly cash flow of $1,000 at an annual interest rate of 12
percent.
$8,333.33
$9,333.33
$100,000
$101,000
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-05 Apply present value
analysis to make decisions and value assets.
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