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The value of the firm is the:
Correct answer(s):
- Present discounted value of all future profits
To an economist, maximizing profit is:
Correct answer(s):
- Maximizing the value of the firm
The higher the interest rate, the greater the
Correct answer(s):
- None of the statements associated with this question are correct
As the interest rate increases, the opportunity cost of waiting to receive a future amount:
Correct answer(s):
- Increases
If the interest rate is 5%, $10 received at the end of 7 years is worth how much today?
Correct answer(s):
- 100/(1 + 0.05)7
If the annual interest rate is 0%, the present value of receiving $1.10 in the next year is:
Correct answer(s):
- $1.10
What is the main role of economic profits?
Correct answer(s):
- To signal where resources are most highly valued
Which of the following is incorrect?
Correct answer(s):
- Managers should only be interested in accounting profits
Which of the following is (are) true?
Correct answer(s):
- All of the statements associated with this question are correct
Which of the following is the main goal of a continuing company?
Correct answer(s):
- To maximize the value of the firm
Basic principles that comprise good management include
Correct answer(s):
- All of the statements associated with this question are correct
Managerial economics
Correct answer(s):
- Is valuable to the coordinator of a shelter for the homeless
Economics
Correct answer(s):
- Has nothing to do with the allocation of resources
Other things equal, the greater the interest rate:
Correct answer(s):
- The lower the NPV
In the Wealth of Nations, Adam Smith argues that:
Correct answer(s):
- Self-interest leads to the efficient allocation of resources
Under producer-producer rivalry, individual firms want to sell the product at the maximum price consumers will pay, but are unable to do this because of:
Correct answer(s):
- Competition among sellers
The behavior of bidders in an auction is an example of:
Correct answer(s):
- Consumer-consumer rivalry
Negotiations between the buyer and seller of a new house is an example of:
Correct answer(s):
- Consumer-producer rivalry
If a producer offers a price that is in excess of a consumer’s valuation of the good, the consumer:
Correct answer(s):
- Will refuse to purchase the good
Suppose total benefits and total costs are given by B(Y) = 100Y – 8Y2 and C(Y) = 10Y2. What is the maximum level of net benefits?
Correct answer(s):
- 139