Managerial Economic BUAD364 Midterm

incentive plans imply

if managers put forth little effort, they receive little pay; if they put forth much effort and hence generate many sales, they receive a lot of pay.

if A and B are substitute goods, a decrease in the price of good A would

lead to a decrease in demand for B

the difference between marginal benefits and marginal costs is the:

marginal net benefits

we would expect the demand for jeans to be

more elastic than the demand for clothing.

The elasticity of variable G with respect to variable S is defined as

the percentage change in variable G that results from a given percentage change in variable S

demand shifters do NOT include

the price of the good

changes in the price of good A lead to a change in:

the quantity demanded for good A

consumer-consumer rivalry arises because of

the scarcity of goods available

which of the following is the incorrect statement

the slope of the net benefit curve is vertical where MB=MC

which of the following is the main goal of a continuing company

to maximize the value of the firm

when marginal revenue is zero, demand will be

unit elastic

an excise tax shifts the supply curve

up by the amount of the tax

if the income elasticity for lobster is 0.4, a 40 percent increase in income will lead to a:

16 percent increase in demand for lobster

Good Y is a complement to good X if an increase in the price of good Y leads to

a decrease in the demand for good X

persuasive advertising influences demand by:

altering the underlying tastes of consumers.

if the cross price elasticity between goods A and B is negative, we know the goods are

complements

which one of the following is an implicit cost to a firm that produces a good or service

foregone profits of producing a different good or service

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

the demand function

recognizes that the quantity of a good consumed depends on its price and demand shifters.

If the own price elasticity of demand is infinite in absolute value, then

the demand curve is horizontal