Marginal net benefits in the above table
Correct answer(s):
- Initially decrease, reach a minimum and then increase
Topic
Fundamentals of Managerial Economics
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Quizzes in Fundamentals of Managerial Economics
Net benefits in the above table
Correct answer(s):
- Initially decrease, reach a minimum and then increase
Total costs in the above table are
Correct answer(s):
- Decreasing at an decreasing rate
The opportunity cost of an action is the
Correct answer(s):
- Value of the most highly valued alternative action given up
If the interest rate is 7%, $500 received at the end of 9 years is worth how much today?
Correct answer(s):
- 500/(1 +.07)9
If the annual interest rate is 0%, the present value of receiving $210 in the next year is:
Correct answer(s):
- $210
Negotiation between the buyer and seller of a new ski-boat is an example of:
Correct answer(s):
- Consumer-producer rivalry
Given the benefit function B(Y) = 200Y – 3Y2, the marginal benefit is:
Correct answer(s):
- 200 - 6Y
Maximizing the lifetime value of the firm is equivalent to maximizing the firm’s current profits if the
Correct answer(s):
- Interest rate is larger than the growth rate in profits and both are constant
If the interest rate is 3%, the present value of $900 received at the end of 4 years is:
Correct answer(s):
- $799.64
If you put $700 in a savings account at an interest rate of 3%, how much money will you have in one year?
Correct answer(s):
- $721
If the interest rate is 12.5%, what is the present value of $200 received in one year?
Correct answer(s):
- $177.77
Property owners move scarce resources towards the production of goods most valued by society because
Correct answer(s):
- Consumers demand inexpensive goods and services
New firms have incentive to enter an industry when there is
Correct answer(s):
- Positive economic profits
If the interest rate is 5% and cash flows are $3,000 at the end of year one and $5,000 at the end of year two, then the present value of these cash flows is
Correct answer(s):
- $7,392.29
“Our marginal revenue is greater than our marginal cost at the current production level.” This statement indicates that the firm
Correct answer(s):
- Should increase the quantity produced to increase profits
Generally when calculating profits as total revenue minus total costs, accounting profits are larger than economic profits because economists take into account
Correct answer(s):
- Both explicit and implicit costs
Marginal benefit refers to:
Correct answer(s):
- The additional benefits that arise by using an additional unit of the managerial control variables
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