# KEY971S - BUSINESS 702 FIRST EXAM KEY SPRING 1997...

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Sheet1 Page 1 BUSINESS 702 FIRST EXAM KEY SPRING 1997 MANAGERIAL ECONOMICS MULTIPLE CHOICE QUESTIONS (30 pts, 1pt each) 1. A typical annual rate of return on invested capital is: A. 5%. > B. 10%. C. 15%. D. 20%. 2. Warren Buffett looks for "wonderful businesses" that feature: A. ongoing innovation. B. large capital investment. > C. consistent earnings growth. D. complicated business strategies. 3. Business profit is: > A. the residual of sales revenue minus the explicit accounting costs of doing business. B. a normal rate of return. C. economic profit. D. the return on stockholders' equity. 4. According to frictional profit theory, above-normal profits: A. are sometimes caused by barriers to entry that limit competition. B. arise as a result of successful invention or modernization. C. can sometimes be seen as a reward to efficient operations. > D. are observed following unanticipated changes in product demand or cost conditions. . 5. The primary virtue of managerial economics lies in its: A. logic. > B. usefulness. C. consistency. D. mathematical rigor. 6. The optimal decision produces: A. maximum revenue. B. maximum profits. C. minimum average costs. > D. a result consistent with managerial objectives. 7. An equation is: > A. an analytical expressions of functional relationships.

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Sheet1 Page 2 B. a visual representation of data. C. a table of electronically stored data. D. a list of economic data. 8. A dependent variable is: A. an X-variable determined separately from the Y-variable. > B. a Y-variable determined by X values. C. a Y-variable determined prior to X values. D. a Y-variable determined with X values. 9. Inflection is: A. a line that touches but does not intersect a given curve. > B. a point of maximum slope. C. a measure of the steepness of a line. D. an activity level that generates highest profit. 10. The comprehensive impact resulting from a decision is the: A. gain or loss associated with a given managerial decision. B. change in total cost. C. change in total profit. > D. incremental change. 11. Statistics are: > A. descriptive measures for a sample. B. summary measures for the population. C. predetermined variables. D. endogenous variables. 12. The "middle" observation is the: > A. median. B. average. C. mean. D. mode. 13. A normally distributed test statistic with zero mean and standard deviation of one is the: > A. z-statistic. B. t-statistic. C. F-statistic. D. S.E.E. 14. A relation known with certainty is called a: A. statistical relation. B. multiple regression. > C. deterministic relation. D. simple regression.
Sheet1 Page 3 15. The standard deviation of the dependent Y-variable after controlling for all X-variables is the: A. correlation coefficient. B. coefficient of determination.

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## This note was uploaded on 07/31/2011 for the course ECON 1201 taught by Professor Smith during the Spring '11 term at Waseda University.

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KEY971S - BUSINESS 702 FIRST EXAM KEY SPRING 1997...

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