Questions from Managerial Economics

Q: A consumer values a car at $525,000 and a

A consumer values a car at $525,000 and a seller values the same car at $485,000. If sales tax is 8% and is levied on the seller, then the seller’s bottom line price is (rounded to the nearest thousan...

Q: Voluntary transactions a. Always produce gains for both parties

Voluntary transactions a. Always produce gains for both parties b. Produce gains for at least one party c. Always increase wealth for everyone d. Are inefficient

Q: Why might performance compensation caps be bad? a. Different

Why might performance compensation caps be bad? a. Different pay rates promote dissent. b. Compensation caps can discourage employees from being productive after the cap. c. Compensation caps can di...

Q: What is a possible consequence of a performance compensation reward scheme?

What is a possible consequence of a performance compensation reward scheme? a. It creates productive incentives. b. It creates harmful incentives. c. Both a and b d. Neither a nor b

Q: Which of the following is NOT one of the three problem solving

Which of the following is NOT one of the three problem solving principles laid out in Chapter 1? a. Under whose jurisdiction is the problem? b. Who is making the bad decision? c. Does the decision ma...

Q: Why might it be bad for hotels to not charge higher prices

Why might it be bad for hotels to not charge higher prices when rooms are in higher demand? a. Arbitrageurs might establish a black market by reserving rooms and then selling the reservations to cust...

Q: The rational-actor paradigm assumes the people do NOT a

The rational-actor paradigm assumes the people do NOT a. Act rationally. b. Use rules of thumb. c. Act optimally. d. Act self-interestedly.

Q: The problem-solving principles analyze firm problems, a.

The problem-solving principles analyze firm problems, a. from the organization’s point of view. b. from the manager’s point of view. c. from the worker’s point of view. d. from society’s point of...

Q: Why might welfare for low income households reduce the propensity to work

Why might welfare for low income households reduce the propensity to work? a. It will not. b. It reduces the incentive to work. c. It is unfair. d. It encourages jealousy.

Q: Why might a “bonus cap” for executives be a bad

Why might a “bonus cap” for executives be a bad policy for the company? a. It isn’t. Executives shouldn’t make more than a certain amount. b. It would sew discontent. c. It would encourage shirking...