Chapter 3: Consumer Behavior and Rational Choice
1. Points along an indifference curve represent bundles of goods that:
a. cost the same amount to buy.
b. consumers dont like very much.
c. decline in marginal utility.
d. deliver equal util
Chapter 12: Game Theory
1. Game theory is useful for understanding oligopoly behavior because:
a. there are so many firms in an oligopoly that all are price takers.
b. firms must differentiate their products if they are to remain in busine
Chapter 1: Introduction
1. Managerial economics uses
a. formal models
b. prescribed behavior
c. quantitative methods
d. microeconomic theory
e. all of the above
to help managers solve problems.
Chapter 4: Estimating Demand Functions
1. The inability to isolate a demand curve from observed prices and quantities alone is known as the:
a. economists problem.
b. inference problem.
c. regression problem.
d. identification problem.
Chapter 6: The Analysis of Costs
1. An example of implicit costs is the:
a. bad-debt liabilities arising out of excessive sales on credit.
b. wages paid to the owners children.
c. opportunity cost of owner-supplied capital and labor that i
Chapter 13: Auctions
1. As far as we know, auctions first emerged:
a. as e-commerce exploded in recent years.
b. when capitalism became a popular form of economic organization.
c. after the emergence of communism, because black markets wer
Chapter 14: Risk Analysis
1. A subjective definition of probability is:
a. a weighted average of different peoples degrees of certainty of an events occurring.
b. a theoretical probability distribution.
c. a persons degree of certainty of
Chapter 8: Monopoly and Monopolistic Competition
1. If a monopolist faces a constant-elasticity demand curve given by Q = 202,500P 3 and has total costs
given by TC = 10Q, its profit-maximizing level of output is:
Chapter 7: Perfect Competition
1. In the model of perfect competition, firms produce a:
a. standardized product with considerable control over price.
b. differentiated product with considerable control over price.
c. standardized product w
Chapter 11: Oligopoly
1. A market where there are only a few sellers is known as:
a. perfectly competitive.
b. monopolistically competitive.
Chapter 2: Demand Theory
1. The market demand schedule shows the quantities that would be purchased, holding all other factors
constant, from a group of firms during a given time period:
a. at varying prices.
b. at varying advertising leve
Chapter 9: Managerial Use of Price Discrimination
1. The optimal level of output and price for the profit-maximizing monopolist in the following figure
Q = 30 and P = $35.
Q = 60 and P = $20.
Q = 30 and P = $20.
Chapter 15: PrincipalAgent Issues and Managerial Compensation
1. The principalagent problem occurs as a result of:
a. the absence of a contract between managers and owners.
b. the separation of ownership from management.
c. the difficulty
Chapter 5: Production Theory
1. A production function is a table, a graph, or an equation showing the:
a. least-cost method of producing output.
b. optimal combination of inputs.
c. maximum output that can be achieved from specified levels
Chapter 16: Adverse Selection
1. Adverse selection implies that:
a. the market for used cars is perfectly competitive.
b. the market for used cars will contain more cars of higher than average quality.
c. the market for used cars will cont
Chapter 18: Optimization Techniques
1. The first derivative of total profit with respect to quantity is:
a. average revenue.
b. marginal revenue.
c. marginal profit.
d. average profit.
e. total profit.
Chapter 17: Government and Business
1. When economies of scale persist to such high levels of output that it is efficient to have only one firm
produce, the resulting firm is known as a(n):
a. patent holder.
b. regulated monopolist.
Chapter 10: Bundling and Intrafirm Pricing
1. When a firm requires a customer to buy additional products in order to buy one of its products, this is
known as a(n):
a. bundling contract.
b. price differentiation.
c. oligopolistic device.