Question The primary virtue of managerial economics lies in its

04 Jun Question The primary virtue of managerial economics lies in its

Question
The primary virtue of managerial economics lies in its:

1. logic.

2. usefulness.

3. consistency.

4. mathematical rigor.

Managerial economics cannot be used to identify:

1. how macroeconomic forces affect the organization.

2. goals of the organization.

3. ways to efficiently achieve the organization’s goals.

4. microeconomic consequences of managerial behavior.

The value-maximizing organization design does not involve the:

1. assignment of decision rights.

2. matching of worker incentives with managerial motives.

3. development of mechanisms for decision management and control.

4. establishment of the regulatory environment.

Business profit is:

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

2. a normal rate of return.

3. economic profit.

4. the return on stockholders’ equity.

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

1. workers.

2. firms.

3. government.

4. customers.

Managers who seek satisfactory rather than optimal results:

1. take actions that benefit parties other than stockholders.

2. are insensitive to social constraints.

3. are insensitive to self-imposed constraints.

4. increase allocative efficiency.

Nonvalue-maximizing behavior is most common:

1. in vigorously competitive markets.

2. when shareholders are poorly informed.

3. when managers own a significant ownership interest.

4. in the production of goods rather than services.

Government regulation is important because government:

1. regulation reduces public-sector employment.

2. produces most of society’s services output.

3. produces most of society’s material output.

4. uses scarce resources.

The share of revenues paid to suppliers does not depend upon:

1. resource scarcity.

2. input market competition.

3. output market competition.

4. relative productivity.

Warren Buffett looks for “wonderful businesses” that feature:

1. ongoing innovation.

2. large capital investment.

3. consistent earnings growth.

4. complicated business strategies.