Quiz No:1 Managerial Economics Spring-2019

Total points 11/13

Air University School Of Management

Section score 8/10

Student Roll No *

180762

Date *
MM DD YYYY

03 / 13 / 2019

Question No: 1 Select the right option

The principles of managerial economics apply to * 1/1

Business rms.

Not-for-pro t organizations.

Government agencies.

All of the above.

Which of the following elds is not used by managerial economics? * 1/1

Economic theory

Economic history

Mathematical economics

Econometrics
Which of the following statements is false? * 1/1

Economic theory refers to microeconomics and macroeconomics.

Decision sciences utilize the tools of analysis of mathematical economics and econometrics.

Mathematical economics uses statistical tools to estimate economic relationships.

None of the above.

The statement that quantity demanded of a commodity during a particular 1/1

period of time is a function of, or depends on, the price of the commodity,
consumers' income, and the price of related commodities, is an example of *

An economic theory.

A mathematical relationship.

An economic relationship.

Decision science.

Which of the following statements is correct? * 1/1

Firms combine and organize resources for the purpose of producing goods and services for
sale.

Firms exist because of the economies they generate in production and distribution.

The existence of rms bene ts entrepreneurs, workers, and other resource owners.

All of the above.

The theory of the rm postulates that the rm maximizes * 1/1

Short-term pro ts.

The value of the rm.

Sales.

Growth.
The salary that an entrepreneur could earn by managing another rm rather 1/1

than the entrepreneur's own is *

An implicit cost.

An explicit cost.

A business cost.

A business pro t.

Economic pro t is equal to * 0/1

Business pro t minus implicit costs.

Business pro t minus explicit costs.

Explicit costs plus implicit costs.

A normal return on investment.

Correct answer

Business pro t minus implicit costs.

Risk-bearing theory of pro t require * 1/1

Above average returns or pro t

Below average return or pro t

Average return or pro t.

None of the above.

Majority of the rms today are using: * 0/1

Risk bearing theory of pro t

Managerial E ciency theory of pro t

Innovation Theory of pro t

All of the above.

Correct answer

All of the above.

Question 2

The costs of attending a state college for one year are $2,000 for tuition, $1,500 for the room, $1,000 for meals, and
$500 for books and supplies. As an alternative the student could earn $13,000 by getting a job instead of going to
college and, in addition, earn 8 percent interest by saving the money not spent on attending college. Estimate the
following based on this information

Section score 3/3

Implicit Cost * 1/1

13000

Explicit Cost * 1/1

5000

The total economic costs that the student faces by attending the college for 1/1

one year. *

18000

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