ADM 524 Managerial Economics Week Three MidTerm Exam Answers – Homeworkmade

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ADM 524 Week Three Mid-Term Exam

Indiana Wesleyan University

1. Which of the following circumstances would cause a decrease in the price of a good? (Points : 2)

Question 2.2. Which of the following statements is false? (Points : 2)

Question 4.4. The elasticity of demand for a product is likely to be greater ________. (Points : 2)

Question 5.5. The cross-price-elasticity of demand for coffee and tea is likely to be ________. (Points : 2)

Question 7.7. Which of the following is the best example of an opportunity cost? (Points : 2)

Question 8.8. Refer to Table 2-3.

Question 9.9. The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded.  If the price falls to $0.90, the quantity demanded will increase to 500.

Question 10.10. The income elasticity for most staple foods, such as wheat, is known to be between zero and one.

Question 11.11. Which of the following statements is true about a monopoly? (Points : 2)

Question 12.12. Which of the following represents a good example of an oligopoly? (Points : 2)

Question 13.13. Describe the market structure of the beverage industry. (Points : 2)

Question 14.14. Which of the following statements is not characteristic of an oligopolistic market? (Points : 2)

Question 15.15. Market structure depends upon ________. (Points : 2)

Question 16.16. What economic factors are relevant in managerial decision making? (Points : 2)

Question 17.17. Tying arrangements that lessen competition were made illegal by the ________. (Points : 2)

Question 18.18. One school of thought concerning anti-trust argues that rather than ensuring efficiency, anti-trust laws are really aimed at ________. (Points : 2)

Question 19.19. Laws that are used to prevent firms from colluding and setting high prices are called ________. (Points : 2)

Question 20.20. In the U.S., the ________ and the ________ prohibit firms from explicitly agreeing to take actions that reduce competition. (Points : 2)

Question 21.21. If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following statements would explain this pattern of trade? (Points : 2)

Question 22.22. Certain kinds of tropical fruits are impossible to grow outdoors in the United States.  Suppose, however, that to create jobs in Wyoming, the U.S. government offered extensive subsidies to growers to produce bananas.  With the subsidies, growers could build greenhouses and offer the fruit at world prices.  The United States would then ________. (Points : 2)

Question 23.23. The production period in which at least one input is fixed in quantity is the ________. (Points : 2)

Question 24.24. By definition, in the typical firm’s short-run production function all inputs are fixed in amount. (Points : 2)

Question 25.25. How would you choose to estimate a production function for a single plant?  How would you choose to estimate a production function for a number of firms in an industry?  Explain. (Points : 2)

Question 26.26. Which of the following statements best represents a difference between short-run and long-run costs? (Points : 2)

Question 27.27. A firm experiences increasing returns to scale; that is, doubling all its inputs more than doubles its output.  What can be inferred about the firm’sshort-run costs? (Points : 2)

Question 28.28. The method of estimating long-run costs in which knowledgeable professionals familiar with production facilities and processes calculate optimal combination of inputs to produce given quantities and then estimate costs is known as ________. (Points : 2)

Question 29.29. Which of these statements is true about costs in the long run? (Points : 2)

Question 30.30. A firm is making a long-run planning decision about the optimal size of a new plant and its labor force.  It decides to build a medium-sized plant and hire 100 workers.  Engineering estimates suggest that at those levels, the marginal product of capital will be 100 and the marginal product of labor will be 75.  If the wage rate is $5 and the rental rate on capital is $10, is the firm making the right decision? Support your answer. (Points : 2)

Question 31.31. Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm’s employees and its suppliers? (Points : 2)

Question 32.32. Which of the following approaches to understanding and predicting consumer behavior provides the most insight into how consumers can be expected to respond in an actual market setting? (Points : 2)

Question 33.33. When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider how to isolate the effect of different variables that influence demand. (Points : 2)

Question 34.34. Briefly describe the three key points managers must consider when using expert opinion, consumer surveys, test marketing, and price experiments in analyzing consumer behavior. (Points : 2)

Question 35.35. Why are estimated models of demand and consumer behavior useful to managers? (Points : 2)

Question 36.36. The regression analysis that analyzes the relationship between one dependent variable and one independent variable is called ________. (Points : 2)

Question 37.37. The regression analysis that analyzes the relationship between one dependent variable and several independent variables is called ________. (Points : 2)

Question 38.38. The least-squares regression is based on ________. (Points : 2)

Question 39.39. A measure of how much the coefficient would vary in regressions based on different samples is called the ________. (Points : 2)

Question 40.40. What is the effect of two independent variables that are highly correlated?  What can be done to remedy the situation? (Points : 2)

Question 41.41. An approach to analyzing consumer behavior in which consumer reaction to different prices is analyzed in a laboratory situation or a test market is called ________. (Points : 2)

Question 42.42. Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from any potential customers? (Points : 2)

Question 43.43. When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population. (Points : 2)

Question 44.44. When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population. (Points : 2)

Question 45.45. When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the answers given in these formats represent actual market behavior. (Points : 2)

Question 46.46. All else constant, all of the following would cause the demand curve for a good to shift except a change in _____________. (Points : 2)

Question 47.47. All else held constant, an increase in foreign imports of cameras would cause the supply of cameras in the United States to ________. (Points : 2)

Question 48.48. Assume declining profits in the market for Internet service force several firms in the area to drop out of the market.  Which of the following best describes the effect of the reduction in the number of service providers and the subsequent adjustment of the market  to the new equilibrium price and quantity? (Points : 2)

Question 49.49. Scarcity is a condition that exists when ________. (Points : 2)

Question 50.50. Opportunity cost is best defined as ________. (Points : 2)