Man Economic

• Question 1

0.2 out of 0.2 points

Economic theory is a valuable tool for business decision making because it

Answer

Selected Answer:

identifies for managers the essential information for making a decision.

• Question 2

0.2 out of 0.2 points

Economic profit is

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Selected Answer:

the difference between total revenue and the opportunity cost of all of the resources used in production.

• Question 3

0.2 out of 0.2 points

Consider a firm that employs some resources that are owned by the firm. When accounting profit is zero, economic profit

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Selected Answer:

must be negative and shareholder wealth is reduced.

• Question 4

0.2 out of 0.2 points

Suppose Marv, the owner-manager of Marv’s Hot Dogs, earned $72,000 in revenue last year. Marv’s explicit costs of operation totaled $36,000. Marv has a Bachelor of Science degree in mechanical engineering and could be earning $30,000 annually as mechanical engineer.

Answer

Selected Answer: d.

both b and c.

• Question 5

0 out of 0.2 points

Owners of a firm want the managers to make business decisions that will

Answer

Selected Answer: a.

maximize the value of the firm.

• Question 6

0 out of 0.2 points

When a firm is a price-taking firm,

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Selected Answer:

the price of the product it sells is determined by the intersection of the market demand and supply curves for the product.

• Question 7

0.2 out of 0.2 points

Economic profit is the best measure of a firm’s performance because

Answer

Selected Answer:

the opportunity cost of using ALL resources is subtracted from total revenue.

• Question 8

0.2 out of 0.2 points

Which of the following is an example of an implicit cost for a firm?

Answer

Selected Answer:

both a and c

• Question 9

0.2 out of 0.2 points

St. Charles Hospital, located in an...