8/11/2019 Quiz Test 1 6th July.13

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Quiz Test-I

ME-1, MBA-1(2013-15)

Time:10 minutes

Mark:10

6thJuly, 2013Put against the correct answer

1. The primary virtue of managerial economics lies in its:

logic.

Usefulness

Consistency

Mathematical rigor

2.

Managerial economics cannot be used to identify

how macroeconomic forces affect the organization

goals of the organization

ways to efficiently achieve the organization's goals.

microeconomic consequences of managerial behavior

3. The value-maximizing organization design does not involve the:

assignment of decision rights

matching of worker incentives with managerial motives.

development of mechanisms for decision management and control.

establishment of the regulatory environment

4.

Business profit is:

the residual of sales revenue minus the explicit accounting costs of doing business.

a normal rate of return

economic profit.

the return on stockholders' equity.

5. In a free market economy, the optimal quality of goods and services is determined by:

workers.

firms.

government.

Customers

6. Managers who seek satisfactory rather than optimal results

take actions that benefit parties other than stockholders

are insensitive to social constraints

are insensitive to self-imposed constraints

increase allocative efficiency.

7. Government regulation is important because government:

regulation reduces public-sector employment

produces most of society's services output

produces most of society's services output

uses scarce resources.

8. The share of revenues paid to suppliers does not depend upon

Roll No:

Section:

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resource scarcity

input market competition

output market competition

relative productivity

9.

To maximize value, management must

maximize short run revenue

maximize short run revenue

maximize long run profit.

maximize short run profit.

10.Value maximization is broader than profit maximization because it considers

total revenues

total costs.

real-world constraints.

interest rates.

11.Economic profit equals

normal profits plus opportunity costs

business profits minus implicit costs.

business profits plus implicit costs. normal profits minus opportunity costs.

12. The value of a firm is equal to:

the present value of tangible assets

the present value of all future revenues

the present value of all future cash flows.

current revenues less current costs

13. Incremental profit is:

the change in profit that results from a unitary change in output

total revenue minus total cost.

the change in profit caused by a given managerial decision.

the change in profits earned by the firm over a brief period of time

14. Which of the following short run strategies should a manager select to obtain the highest degree ofsales penetration?

maximize revenues

minimize average costs

minimize total costs

maximize profits.

15. If total revenue increases at a constant rate as output increases, marginal revenue: is greater than average revenue

is less than average revenue

is greater than average revenue at low levels of output and less than average revenue at high

levels of output.

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equals average revenue

16. Total revenue is maximized at the point where marginal

revenue equals zero

cost equals zero

revenue equals marginal cost

profit equals zero

17.Average cost minimization occurs at the point where:

MC = 0

MC = AC

AC = 0

Q = 0

18. Marginal profit equals:

the change in total profit following a one-unit change in output

the change in total profit following a managerial decision

average revenue minus average cost. total revenue minus total cost

19. The optimal output decision is taken when:

the marginal cost of production is minimum

production costs are minimized

it is most consistent with managerial objectives.

the average cost of production is minimum

20. Marginal profit equals average profit when

marginal profit is maximized

average profit is maximized marginal profit equals marginal cost

the profit minimizing output is produced

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