Questions from Managerial Economics

Q: The U.S. Government bought 112,000 acres of

The U.S. Government bought 112,000 acres of land in southeastern Colorado in 1968 for $17,500,000. The cost of using this land today exclusively for the reintroduction of the black-tailed prairie dog...

Q: When a firm ignores the opportunity cost of capital when making investment

When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of a. Fixed-cost fallacy b. Sunk-cost fallacy c. Hidden-cost fallacy d. None of the...

Q: The biggest advantage of capitalism is that a. it allows

The biggest advantage of capitalism is that a. it allows the market to self-regulate b. it allows a person to follow his self-interest c. it allows voluntary transactions which creates wealth d. Al...

Q: Wealth creating transactions are more likely to occur a. with

Wealth creating transactions are more likely to occur a. with private property rights b. with strong contract enforcement c. with black markets d. All of the above

Q: Which of these actions creates value? a. Buying a

Which of these actions creates value? a. Buying a struggling firm and selling off its assets for more than the purchase price. b. A baseball slugger drawing paying fans into the ballpark. c. A stude...

Q: Which of the following are examples of a price floor?

Which of the following are examples of a price floor? a. Minimum wages b. Rent controls in New York c. Both a and b d. None of the above.

Q: A price ceiling a. Is a government-set maximum

A price ceiling a. Is a government-set maximum price. b. Is an implicit tax on producers and an implicit subsidy to Consumers. c. Will create a surplus. d. Causes an increase in consumer and produc...

Q: Taxes a. impede the movement of assets to higher valued

Taxes a. impede the movement of assets to higher valued uses. b. reduce incentives to work. c. decrease the number of wealth-creating transactions. d. All of the above.

Q: A consumer values a car at $20,000 and it

A consumer values a car at $20,000 and it costs a producer $15,000 to make the same car. If the transaction is completed at $18,000, the transaction will generate a. no surplus b. $5,000 worth of s...

Q: Which of the following organizational forms requires the strongest management oversight to

Which of the following organizational forms requires the strongest management oversight to ensure coordination of functions? a. Profit centers b. Functional organizations c. M-form organizations d. F...