G300

Compute the present value of a preferred stock that pays, in perpetuity, an annual cash flow of $200 at an annual interest rate of 5 percent.

$4000

Given the cost function C(Q) = 100 + 5Q +3Q2, the marginal cost of producing 10 units of output is

$65

What is the own price elasticity of the demand function D ( P ) = 250 − 5 P at price P=$10.?

-0.25

Suppose that supply increases and demand decreases. What effect will this have on price and quantity?

. None of the statements associated with this question are correct

What is the main role of economic profits?

. To signal where resources are most highly valued

What is the market size of the demand curve represented by

150

What is the consumer surplus of the demand curve represented by D ( P ) = 150 − 3 P when the market price is 10?

2400

The Marginal Cost of the cost function C ( q ) = q 2 − 3 q + 100is

2q-3

Suppose the production function is given by Q = 2KL, and that Q = 30 and K =5. How much labor is employed by the firm?

3

The Marginal Revenue of the function R ( q ) = 25 + 5 q is

5

What is the maximum price to charge of the demand curve represented by D ( P ) = 150 − 3 P?

50

What would happen to the demand of a product with -1.5 own price elasticity if the manager decides to decrease the price by 10%?

Increase by 15%

Which of the following statements is incorrect?

d. all of the above are incorrect

The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a the good is the

d. cross-price elasticity

When dealing with present value, a higher interest rate

decreases the present value of a future amount.

The basics of managerial economics will teach you

how to think strategically.

Good Z is a complement to good X if the cross price elasticity of demand is

less than 0

It is not profitable to hire in the short run if

value marginal product is less than wage

Price matching strategy can lead to

Collusion

The deivative of a constant number is

Zero.

Given the benefit function B(Y) = 40Y − Y2, the marginal benefit is:

40 - 2Y

The opportunity cost of an action is the

1. . The costs associated with the action as well as the best alternative's value given up.

Given the cost function C(Y) = 6Y2, what is the marginal cost

1. D. 12Y.

Suppose the production function is given by Q = 2K1/2L1/2, and that Q = 30 and K = 25. How much labor is employed by the firm?

9

Which one of the following causes the demand curve of economy cars to shift right

Higher gas prices.

The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at one unit and costs $2. The maximum profits are:

A. 3.

The optimal level of inputs that minimize cost depends on

All of the listed

Suppose the marginal product of labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use:

B. more labor and less capital.

The production function is Q = K.6 L.4. The marginal rate of technical substitution is:

C. 2/3 K L-1.

For a cost function C = 100 + 10Q + Q2, the average variable cost of producing 20 units of output is:

C. 30.

Given the benefit function B(Y) = 400Y - 2Y2, the marginal benefit is:

C. 400-4Y.

Suppose total benefits and total costs are given by B(Y) = 100Y - 8Y2 and C(Y) = 10Y2. What level of Y will yield the maximum net benefits?

C. 50/18.

For the cost function C(Q) = 100 + 2Q + 3Q2, the marginal cost of producing 2 units of output is:

D. 14.

What is managerial economics?

It is the study of how to direct resources to reach the managerial goal.

If the research division reported the technology of a firm as F(K,L) = 2K ½ L ½ Which of the following is the Marginal Product of Capital?

K^(-1/2)L^(1/2)

If the research division reported the technology of a firm as F(K,L) = 2K ½ L ½ Which of the following is the Marginal Product of Labor?

K^(1/2)L^(-1/2)

A firm would like to supply more as long as

Marginal Revenue of supplyin is more than the marginal cost

The opportunity cost is

None of them is right.

What is the market equilibrium price and quantity in the market with the demand and supply functions as D ( P x ) = 240 − 6 P x

P= 20 , Q=120

Which one of the below is a strategic decision?

Play a passing game in an NFL match

The total cost of production does not depend on

The Elasticity

Which one of the following is not an effect of new firms entering a market.?

The consumer suplus would go down.

Which of the following is a true statement for the firm with the supply function

The firm is a surviving firm with a minimum price of 4

The lower the interest rate is

The greater the present value of a future amount

In which of the following market a price increase would increase revenues? (Assume No Direct Competition)

The market with -0.2 Own Price Elasticity

Which of the following is an important factor to determine how sensitive the demand is to price changes?

The number of competitors selling a close substitute

How would the market react to excess surplus?

The price will eventually be lower

Which of the following is a true statement?

The ultimate goal of a firm is to maximize the present value.

Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If price is set as 30, what is the market condition?

There is excess supply

What is the main role of economic profits?

To signal which alternative option is more valuable

For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to:

c. shift to the right

The marginal benefit explains

the additional value gain of an option.

The case of zero own price elasticity suggests

the demand curve is vertical

The market supply curve represents

the marginal cost of production of firms

The law of demand suggests for a normal good that

the quantity demandn goes ip when price of the good goes down.