Managerial Economics and Strategy, 2e (Perloff/Brander)
Chapter 1 Introduction
1.1 Managerial Decision Making
1) Microeconomics studies the allocation of
A) decision makers.
B) scarce resources.
C) models.
D) unlimited resources.
Answer: B
Skill: Definition
AACSB: Analytical Thinking
Status: Old
2) Society faces trade-offs because of
A) government regulations.
B) profit motive.
C) price setting by firms.
D) scarcity.
Answer: D
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
3) Managerial economics
A) describes how pay for managers is set.
B) ensures managers always make good decisions.
C) helps managers make decisions in the face of scarcity.
D) explains which products consumers will buy.
Answer: C
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
4) CEOs should focus on
A) beating their competitors.
B) maximizing firm profits.
C) getting the best pay package for the senior management team.
D) minimizing costs.
Answer: B
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
5) Profit is
A) maximized when the marketing department coordinates with the production department.
B) maximized when revenue is maximized.
C) used to beat a company's rivals.
D) the difference between a firm's revenues and its costs.
Answer: D
Skill: Definition
AACSB: Analytical Thinking
Status: New
6) Firms face tradeoffs because
A) managers don't know which inputs to use.
B) inputs are scarce.
C) markets set prices of goods they sell.
D) marginal reasoning leads to uncertainty.
Answer: B
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
7) A firm's managers are constrained by
A) consumers.
B) workers.
C) government.
D) All of the above.
Answer: D
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
8) A market
A) always involves the personal exchange of goods for money.
B) allows interactions between consumers and firms.
C) always takes place at a physical location.
D) has no influence on prices.
Answer: B
Skill: Conceptual
AACSB: Analytical Thinking
Status: Old
9) In a market
A) the primary participants are consumers and firms.
B) government policies play a very small part.
C) decision makers always maximize.
D) the goods sold are always closely related.
Answer: A
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
10) Which of the following would NOT be considered part of a firm's strategy?
A) production levels
B) which inputs to use
C) sales strategy