Managerial Economics-1

The most important function in managerial economics

• Application of theory and concept

• Decision making

• Data Gathering

• Economic Analyzation

How do you calculate revenue?

• sales x price

• price x cost

• cost + sales

• sales - total price

The Value of the firm is equal to

• The present value of tangible assets.

• The present value of all future revenues.

• The present value of all future cash flows.

• Current revenues less current costs.

The return to owner-provided inputs is an

• Implicit cost.

• Economic rent.

• Explicit cost.

• Total cost.

The Value of the firm decreases with a decrease in

• Total revenue.

• The discount rate.

• The cost of capital.

• Total cost.

Economic profit equals

• Normal profit plus opportunity costs.

• Business profit minus implicit costs.

• Business profit plus implicit costs.

• Normal profit minus opportunity costs.

Business profit is

• The residual of sales revenue minus the explicit accounting costs of doing business.

• A normal rate of return.

• Economic profit.

• The return on stockholders’ equity.

Economic Profit of the business organization is obtained by ?

• Adding average revenue

• Subtracting costs

• Adding costs

• Finding gap between TR and TC

The total cost of a business organization is ?

• Sum of explicit costs

• Sum of implicit costs

• Sum of explicit and implicit costs

• Difference of explicit and implicit costs

Managerial Economics is based on the principles of ....?

• Macroeconomics

• Monetary Economics

• Microeconomics

• Government Economics