Economic 1

ECON

Chapter 1 Introduction to Modeling and Decision Analysis

Multiple-Choice

1. The essence of decision analysis is:

a. breaking down complex situations into manageable elements.

b. choosing the best course of action among alternatives.

c. finding the root cause of why something has gone wrong.

d. thinking ahead to avoid negative consequences.

ANSWER: B

2. Why would someone wish to use a spreadsheet model?

a. To implement a computer model.

b. Because spreadsheets are convenient.

c. To analyze decision alternatives.

d. All the above.

ANSWER: D

3. Which of the following fields of study is defined in Chapter One as the one that “uses computers, statistics, and mathematics to solve business problems”?

a. Accounting

b. Information systems

c. Management science

d. Scientific management

ANSWER: C

4. Virtually everyone who uses a spreadsheet today for model building and decision making

a. is a practitioner of management science.

b. possesses an advanced knowledge of mathematics and computer programming languages.

c. should beware of flaws in the early Pentium computer chips made by Intel.

d. is in a position to influence decision makers.

ANSWER: A

5. Which of the following statements is true of using models in problem solving and decision analysis?

a. It is a fairly new idea.

b. It is required in order to find good solutions.

c. It is something everyone has done before.

d. It is tied to the use of computers.

ANSWER: C

6. A road map is an example of

a. a mathematical model.

b. a mental model.

c. a physical model.

d. a visual model.

ANSWER: D

7. The textbook figure of the problem solving process is an example of a

a. mental model.

b. prescriptive model.

c. graphical model.

d. visual model.

ANSWER: D

8. Which of the following is most likely to be used when faced with the decision of how to arrange...