Managerial Economics & Business Strategy 10th Edition by Michael Baye Test bank
At what level of output does marginal cost equal marginal revenue?
Number Units Produced Total Benefit Total Costs
0 0 0
20 120 40
40 200 100
60 270 170
80 310 260
100 330 370
20
40
60
80
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
Which of the following is not an area in which managerial economics is applied?
assisting a family in deciding whether to buy a new or used car
analyzing historical trends in the federal budget deficit
helping a real-estate investor understand the flow of returns over the next decade
assisting corn farmers about whether to use farmworkers or machines for crop harvest
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
140.
Award: 1.00 point
141.
Award: 1.00 point
Managerial economics assist managers in making
faster decisions.
decisions that best achieve a firm’s goal.
more inclusive decisions.
decisions that best achieve the goals of employees.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Consumer–producer rivalry implies
a lower price of a good favors both producers and consumers.
a higher price of a good hurts producers while favoring consumers.
a higher price of a good favors producers while hurting consumers.
a lower price of a good hurts both producers and consumers.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
142.
Award: 1.00 point
143.
Award: 1.00 point
The power of input suppliers implies
a lower price of an input favors both suppliers and purchasing firms.
a higher price of an input hurts the supplier while favoring the firm purchasing the inputs.
a higher price of an input favors the supplier while hurting the firm purchasing the input.
a lower price of an input hurts both suppliers and purchasing firms.
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Suppose the firm achieves total revenue of $1,000 by selling 150 units, while facing total costs of $900. If the firm
produces and sells 151 units, their total revenue is $1,005 and their total costs is $950. Should the firm produce and sell
the extra unit?
no, since marginal profits are positive
no, since marginal profits are declining
yes, since profits are positive
yes, since the marginal benefit is positive
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
144.
Award: 1.00 point
145.
Award: 1.00 point
Suppose the firm achieves total revenue of $1,000 by selling 100 units, while facing total costs of $900. If the firm
produces and sells 101 units, their total revenue is $1,009 and their total costs is $905. Should the firm produce and sell
the extra unit?
no, since marginal profits are declining
yes, since marginal profits are positive
yes, since profits are positive
no, since profits are declining
References
Multiple Choice Difficulty: 03 Hard Learning Objective: 01-06 Apply marginal analysis
to determine the optimal level of a managerial
control variable.
Which of the following is least likely to be a constraint facing a hair salon?
the degree of financing from a bank
the number of upcoming graduates from a beauty service training institute
the number of hours the owner needs to provide childcare at home
the ability to purchase new land
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
146.
Award: 1.00 point
Which of the following is least likely to be a constraint facing a hotel with an existing contract for room cleaning
services?
the degree of financing from a bank