Managerial Economics Quiz 1

Q1. What is managerial economics?

• It is the art of recording business transactions.   

• Use of Statistical principles in business

• Use of accounting concepts in business

• Use of economics concepts in business decision making

Q2. What are substitutes?

• A good for which an increase in income cause consumers to demand less of the goods, all other factors held constant.

• A good which can used in the place of other

• A good which are used in conjunction with each other

• A good for which an increase in the income cause consumer to demand more of the goods, all other factors held constant

If marginal benefit is greater than the marginal cost, a rational choice involves

• Less of the activity

• More of the activity   

• No more of the activity

• Less or more depending on the benefits of other activities

Which is not covered under the subject of managerial economics economics?

• Accounting Theory

• Production Analysis 

• Demand Analysis     

• Cost analysis

Which of the following is an implicit cost?

• Wages paid to its employee. 

• Rent paid for hired types of equipment

• Depreciation charged on company-owned equipment. 

•  

  Taxes on company property

In a perfect competition market structure

• Firm is the price giver and Industry is the price taker

• Firm is the price taker and the Industry is the price giver

• Firm and Industry are the price takers                          

• None of these

Marginal cost curve always cut the average cost curve

• From below on the rising portion of the AC curve

• From below on the falling portion of the AC curve

• From below at the minimum point of the AC curve

• From below at any point of the AC curve

In case two commodities are good substitutes, cross elasticity will be

• Positive            

•    Negative       

• Unitary       

• Infinite

An Iso-Cost line represents

• Combinations of two inputs which yields varying amount of output

• Combinations of two inputs that cost the same amount to a firm

• Combinations of two inputs which yield same amount of output

• Combinations of two inputs which cost different amount of output

Suppose the demand for good Z goes up when the price of good Y goes down. We can say

         that goods Z and Y are:

• Unrelated Goods    

• Perfect Substitutes

• Complements         

•         

  Substitutes