Managerial Economics Quiz

What is the primary goal of a firm according to Managerial Economics?

• Revenue maximization

• Market share maximization

• Profit maximization

• Cost minimization

Which of the following is NOT a factor of firm profitability in the long run?

• Presence of few close substitutes

• Strong entry barriers

• High consumer demand

• Weak rivalry in the market

What type of cost is associated with the opportunity cost of using resources owned by the firm?

• Implicit cost

• Variable cost

• Explicit cost

• Fixed cost

In a perfectly competitive market, firms are considered to be:

• Oligopolists

• Monopolists

• Price setters

• Price takers

What does the term 'moral hazard' refer to?

• The risk of product obsolescence

• The risk of market fluctuations

• The conflict of interest between principals and agents

• The inability to monitor agreements effectively

Which market structure is characterized by a single firm producing a product with no close substitutes?

• Monopolistic competition

• Perfect competition

• Monopoly

• Oligopoly

What is the relationship between price and quantity demanded according to the law of demand?

• Proportional relationship

• Inverse relationship

• No relationship

• Direct relationship

What happens to the supply curve when there is an increase in input prices?

• It remains unchanged

• It shifts to the left

• It becomes vertical

• It shifts to the right

What is consumer surplus?

• The total revenue generated by a firm

• The total cost incurred by consumers

• The difference between the economic value of a good and the market price paid by consumers

• The difference between the market price and the minimum price producers are willing to accept

What is the effect of a price ceiling set below the equilibrium price?

• Surplus

• Shortage

• Equilibrium

• No effect