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Maximizing the present value of all future profits is the same as maximizing current profits if the growth rate in profits is:
Correct answer(s):
- Less than the interest rate
Suppose the growth rate of the firm’s profit is 5%, the interest rate is 6%, and the current profits of the firm are 100 million dollars. What is the value of the firm?
Correct answer(s):
- $10,600 million
. Suppose the growth rate of the firm’s profit is 5%, the interest rate is 6%, and the current profits of the firm are 80 million dollars: What is the value of the firm?
Correct answer(s):
- $8,480 million
Which is the correct statement about the relationship between government and the market?
Correct answer(s):
- Government often plays a role in disciplining the market process
Because of producer-producer rivalry, the price will tend to:
Correct answer(s):
- Be driven to a lower price
Producer-producer rivalry functions:
Correct answer(s):
- Only when multiple sellers for a product compete in the market
Consumer-consumer rivalry arises because of:
Correct answer(s):
- The scarcity of goods available
Consumer-consumer rivalry:
Correct answer(s):
- Reduces the negotiating power of consumers in the market place
Trade will take place:
Correct answer(s):
- If the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good
Consumer-producer rivalry occurs because of:
Correct answer(s):
- The competing interests of consumers and producers
Which of the following is not the source of rivalry that exists in economic transactions?
Correct answer(s):
- Government-producer rivalry
Incentive plans imply:
Correct answer(s):
- If managers put forth little effort, they receive little pay; if they put forth much effort and hence generate many sales, they receive a lot of pay
When MB = 300 – 12Y and TC = 12Y + 108, the optimal level of Y is:
Correct answer(s):
- 24
Which of the following is the incorrect statement?
Correct answer(s):
- The difference in the slope of the total benefit curve and the total cost curve is maximized at the optimal level of Q
Maximizing total benefits is equivalent to maximizing net benefits if and only if there are:
Correct answer(s):
- No costs associated with achieving more benefits
In order to maximize net benefits, the managerial control variable should be used up to the point where:
Correct answer(s):
- Net marginal benefits equal zero
If marginal costs exceed marginal benefits, then:
Correct answer(s):
- The firm should decrease its production level
If marginal benefits exceed marginal costs, it is profitable to:
Correct answer(s):
- Increase Q
The optimal amount of studying is determined by comparing:
Correct answer(s):
- Marginal benefit and the marginal cost of studying
Marginal benefits are the:
Correct answer(s):
- Incremental benefits of a decision