Question

1. Managerial economics can best be defined as the:

Select one:

a. macroeconomics and microeconomics for managers.

b. analysis of the labor market through the behavior of workers and managers.

c. analysis of major management decisions using economic tools.

d. study of economic incentives on consumer behavior and demand.

e. study of the strategic interaction between firms in a market.

2. The price elasticity of demand is defined as the ratio of the _____ other factors held constant.

Select one:

a. change in the price of a good to the change in the total revenue

b. percentage change in quantity demanded to the percentage change in the price of a competitor’s good

c. percentage change in quantity demanded to the percentage change in price

d. percentage change in the price of an input to the percentage change in the price of the good

e. percentage change in price of the good to the percentage change in the consumers’ income

3. According to the law of demand, if a firm reduces the price of its good:

Select one:

a. the quantity of goods produced and sold by the firm will decline.

b. competing firms will reduce prices.

c. some consumers will exit the market.

d. consumers in the market will demand more units of the good.

e. consumers will demand fewer units than before the price cut.

4. Other factors constant, a change in _____ will cause a shift in a firm's demand curve.

Select one:

a. the quantity of the good offered for sale

b. the price of the good or service

c. the wages paid to labor employed

d. the general income level of consumers

e. the technology used in the production of the good or service