Managerial Economics & Business Strategy 10th Edition by Michael Baye Test bank
43.
Award: 1.00 point
44.
Award: 1.00 point
The behavior of bidders in an auction is an example of
consumer–consumer rivalry.
consumer–producer rivalry.
producer–producer rivalry.
supplier–consumer rivalry.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-04 Apply the five forces
framework to analyze the sustainability of an
industry's profits.
Under producer–producer rivalry, individual firms want to sell the product at the maximum price consumers will pay,
but they are unable to do this because of
cost considerations.
the scarcity of resources.
competition among sellers.
competition among buyers.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-04 Apply the five forces
framework to analyze the sustainability of an
industry's profits.
45.
Award: 1.00 point
46.
Award: 1.00 point
In the Wealth of Nations , Adam Smith argues that
self-interest leads to the efficient allocation of resources.
benevolence leads to the efficient allocation of resources.
profits are maximized where marginal revenue equals net marginal benefits.
minimization of costs occurs when average costs equal average benefits.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-03 Explain the role of
profits in a market economy.
Economics
exists because of scarcity.
is not related to decision making.
is the science of the rich.
has nothing to do with the allocation of resources.
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
47.
Award: 1.00 point
48.
Award: 1.00 point
Managerial economics
has little to say about day-to-day decisions.
is valuable to the coordinator of a shelter for the homeless.
is not relevant for managers of not-for-profit groups.
is the study of how to get rich in the stock market.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
Basic principles that comprise effective management include
identifying goals and constraints.
focusing only on the importance of costs.
ignoring incentives.
emphasizing short-term profits
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-01 Summarize how goals,
constraints, incentives, and market rivalry affect
economic decisions
49.
Award: 1.00 point
50.
Award: 1.00 point
Which of the following is the main goal of a continuing company?
to maximize the value of the firm
to minimize costs
to improve product quality
to enhance service to its customers
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-03 Explain the role of
profits in a market economy.
Which of the following is true?
Accounting costs generally understate economic costs.
Accounting profits generally understate economic profits.
In the absence of any opportunity costs, accounting profits are less than economic profits.
Accounting costs generally overstate economic costs.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
51.
Award: 1.00 point
52.
Award: 1.00 point
Which of the following is incorrect ?
Accounting profits generally overstate economic profits.
Accounting profits do not take opportunity cost into account.
Economic costs include not only the accounting costs but also the opportunity costs of the resources used in
production.
Managers should only be interested in accounting profits.
References
Multiple Choice Difficulty: 02 Medium Learning Objective: 01-02 Distinguish economic
versus accounting profits and costs.
What is the main role of economic profits?
to signal where resources are most highly valued
to help firms cover their production costs
to help consumers cover their opportunity cost
to signal where resources are least-valued
References
Multiple Choice Difficulty: 01 Easy Learning Objective: 01-03 Explain the role of