18 Questions
| Total Attempts: 904

Questions and Answers

- 1.The basic law of demand says that all other things being the same,
- A.
The lower the price of a product, the less of it consumers will purchase

- B.
The higher the price of a product, the less of it consumers will purchase

- C.
The lower the price of a product, the more of it consumers will purchase

- D.
The higher the price of a product, the more of it consumers will purchase

- E.
The greater the number of units of a product sold in the past, the more of it consumers will purchase that product in the future

- 2.If a farm is producing as efficiently as it knows how, the how will the total cost function slope?
- A.
Upward

- B.
Downward

- C.
No Slope

- D.
Downward until an output threshold value, then upward

- E.
Upward until an output threshold value, then downward

- 3.Which of the following cost line items would be a fixed cost?
- A.
Commissions to Salespeople

- B.
Rent

- C.
Raw Materials

- D.
Packaging

- E.
Shipping/Delivery Charges

- 4.If TC(Q) = 1000Q
^{2}+ 100Q + 10, what is the formula for AC(Q)?- A.
2000Q + 100

- B.
2000Q2 + 100Q

- C.
1000Q2 + 100Q + 10

- D.
1000Q + 100 +10/Q

- E.
100Q + 10 + 1/Q

- 5.Which of the following best describes marginal cost?
- A.
The per-unit-of-output cost for a product

- B.
The incremental cost of producing one more unit of output

- C.
A cost invariant to the farm's output

- D.
The sum of all costs associate with the production of a product

- E.
The cost of fixed items such as general and administrative expenses

- 6.Which of the following statements is true regarding the relationship between average and marginal cost functions?
- A.
When average cost is a decreasing function of output, marginal cost is greater than average cost

- B.
When average cost neither increases or decreases (because it is constant or at a minimum point), marginal cost is equal to average cost

- C.
The average cost function is always smaller than the marginal cost function

- D.
The average cost function is always greater than the marginal cost function

- E.
When average cost is an increasing function of output, marginal cost is less than average cost

- 7.What is a sunk cost?
- A.
A cost that can be avoided if certain choices are made

- B.
A cost that always varies with the output of a factory

- C.
The average cost of operating a plant

- D.
The "lower envelop" of short-run average cost functions

- E.
A cost incurred no matter what the decision is and cannot be avoided

- 8.Suppose an entrepreneur starts a business earning $2M in revenue in 2009 while at the same time incurring $1.8M in costs. If the entrepreneur's best outside alternative employment opportunity is to earn $300K, what are the firms accounting and economic profits?
- A.
$200K, -$100K

- B.
$200K, $100K

- C.
$300K, $100K

- D.
$300K, -$100K

- E.
$200K, $200K

- 9.Which of the following variables does not influnce the quantity of product that a firm is able to sell?
- A.
Price of the product

- B.
Price of related products

- C.
Plant production costs

- D.
Incomes and testes of consumers

- E.
Advertising

- 10.In which of the following markets is a consumer less sensitive to price?
- A.
Airlines

- B.
Refrigerators

- C.
Health Care

- D.
Computer components

- E.
Washing Machines

- 11.Which of the following best describes marginal revenue?
- A.
How sales revenue varies as a function of how much product is sold

- B.
The incremental sales from producing one more unit of output

- C.
Rate of change in total revenue that results from the sale of ∆Q additional units of output

- D.
The total sales for a given product based on plant output

- E.
Percentage change in quantity divided by percentage change in price

- 12.At what point can a firm achieve a profit maximizing quantity?
- A.
MR > MC

- B.
MC = D

- C.
MR < MC

- D.
MR = D

- E.
MR = MC

- 13.Which characteristic does not describe a perfectly competitive market?
- A.
Firms produce identical or nearly identical products

- B.
Market price is beyond the control of any individual firm

- C.
A firm's demand curve is perfectly horizontal at the market price

- D.
Industry-level price elasticity is finite

- E.
Firm-level price elasticity of demand facing another perfect competitor is infinite

- 14.What is a Nash equilibrium?
- A.
A state where each player is doing the best it can, given the strategies of all other players

- B.
A state where the sum of all payoffs is maximized

- C.
A state where the players always have achieved their best possible result

- D.
A state at which MR = MC for a firm

- E.
A state where each player always must play a dominant strategy

- 15.Suppose a factory is producing 100 units and the price of each unit is $10. If raising the price to $12 per unit results in a drop in sales of 12 units, what is the price elasticity of demand, ƞ?
- A.
6

- B.
0.6

- C.
1.67

- D.
0.8

- E.
0.17

- 16.In what special situation might the law of demand not hold?
- A.
In a perfectly competitive market

- B.
When there is a high price elasticity of demand

- C.
When MR = MC

- D.
At the Nash Equilibrium

- E.
If high prices confer prestige

- 17.If ƞ = 0.8 and P = $25, what is MR?
- A.
$20

- B.
$6.25

- C.
-$5

- D.
-$6.25

- E.
$5

- 18.What is the revenue destructiob effect?
- A.
The loss in revenue a firm incurs on units it would have sold at a higher price when reducing price to sell extra units

- B.
The loss in revenue a firm incurs as a result of selling fewer units of output when raising price to increase profit

- C.
The loss in revenue a firm incurs due to brand level elasticities

- D.
The loss in revenue a firm incurs due to being in a perfectly competitive market

- E.
The loss in revenue a firm incurs due to predatory pricing

- Accounting Quizzes
- Advertising Quizzes
- Agriculture Quizzes
- Automotive Quizzes
- Brand Quizzes
- Business Accounting Quizzes
- Business Analyst Quizzes
- Business Development Quizzes
- Business Environment Quizzes
- Business Etiquette Quizzes
- Business Finance Quizzes
- Business Math Quizzes
- Business Organization Quizzes
- Business Plan Quizzes
- Business Process Quizzes
- Business Study Quizzes
- Business Technology Quizzes
- CEO Quizzes
- Collaboration Quizzes
- Company Quizzes
- Construction Quizzes
- Consumer Quizzes
- CSR Quizzes
- Customer Quizzes
- Customer Service Quizzes
- Development Quizzes
- Ecommerce Quizzes
- Employment Quizzes
- Entrepreneurship Quizzes
- Finance Quizzes
- Hospitality Quizzes
- Human Resources Quizzes
- Industry Quizzes
- International Business Quizzes
- Introduction To Business Quizzes
- Investment Quizzes
- Logistics Quizzes
- Management Quizzes
- Manufacturing Quizzes
- Material Quizzes
- Media Quizzes
- Office Quizzes
- Organization Quizzes
- Principles Of Business Quizzes
- Printing Quizzes
- Publishing Quizzes
- Real Estate Quizzes
- Retail Quizzes
- SAP Business One Quizzes
- Small Business Quizzes
- Source Quizzes
- Supply Quizzes
- Survey Quizzes
- Telecommunication Quizzes
- Trade Quizzes
- Training Quizzes
- Transportation Quizzes
- Warehouse Quizzes
- Welding Quizzes

×

Wait!

Here's an interesting quiz for you.