The following aspect is not included in the scope of
Industrial Economics..i
Theory of Firm ii Cost Analysis iiiProfit Analysis IV Service Sector.
Answers
Explanation:
Which of the following is the best definition of managerial economics? Managerial economics is
a. a distinct field of economic theory.
b. a field that applies economic theory and the tools of decision science.
c. a field that combines economic theory and mathematics.
d. none of the above.
The value of an economic theory in practice is determined by
a. how accurate the assumptions are.
b. how well the theory can be represented by a graph.
c. how well the theory can predict or explain.
d. how parsimonious the model is.
Management decision problems are comprised of three elements. Which of the following is not one of them?
a. Profitability
b. Alternatives
c. Constraints
d. Objectives
Which of the following areas of economic theory is the single most important element of managerial economics?
a. Mathematical economics
b. Econometrics
c. Macroeconomics
d. Microeconomics
Which of the following is defined as the study of the aggregate economy studied as a whole?
a. Mathematical economics
b. Econometrics
c. Macroeconomics
d. Microeconomics
Which of the following is the discipline that studies the use of statistical tools to estimate economic models?
a. Mathematical economics
b. Econometrics
c. Macroeconomics
d. Microeconomics
Firms do not continue to grow without limit because of
a. managerial limitations.
b. government regulation.
c. income taxes.
d. antitrust laws.
The modern theory of the firm holds that firms behave in a way that is designed to maximize
a. profit.
b. the value of the firm.
c. monopoly power.
d. total revenue.
Which of the following functional areas of business has primary responsibility for a firm's total revenue?
a. Accounting
b. Finance
c. Marketing
d. Personnel
Which of the following is an example of a resource constraint?
a. Pollution control laws
b. Inadequate demand
c. Excessive production costs
d. Inadequate financial capital
The last stage in the five-step decision process described in the text is to
a. determine the objective.
b. select the best possible solution.
c. implement the decision.
d. explain the decision to managers.
The first stage in the five-step decision process described in the text is to
a. define the problem.
b. select the best possible solution.
c. determine the objective.
d. identify possible solutions.
The economic term for the costs associated with negotiating and enforcing a contract is
a. opportunity costs.
b. real costs.
c. functional costs.
d. transaction costs.
The tendency for managers to operate a firm in a way that maximizes their personal utility rather than the firm's profits is referred to as the
a. consumer utility incentive.
b. principal-agent problem.
c. hidden agenda scenario.
d. Modigliani hypothesis.
By tying a manager's compensation to the performance of the firm relative to that of its competitors, corporate stockholders and directors create incentives that tend to resolve the
a. possibility of bankruptcy.
b. hidden agenda scenario.
c. principal-agent problem.
d. firm's opportunity costs.
The globalization of business is reflected in all of the following except
a. the international convergence of consumer tastes.
b. the increase in barriers to international trade.
c. the emphasis on global marketing-management training.
d. increasing domestic competition from foreign producers.
Which of the following is not a result of the spread of information technology?
a. More rapid deliveries of products to consumers
b. Reduced inventories
c. Reduced productivity of workers
d. Reduced need for middle management
Which of the alternatives to the modern theory of the firm holds that managers attempt to meet some goal that is defined in terms of a specified level of sales, profits, growth, or market share?
a. Sales maximization model
b. Management utility maximization model
c. Satisficing model
d. Profit maximization model
Business profit is equal to total revenue minus
a. economic costs.
b. explicit costs.
c. implicit costs.
d. managerial costs.
Which of the following is an example of an implicit cost?
a. Dividends paid out to stockholders
b. The uncompensated services of the spouse of a firm's owner
c. Payments made to workers who are unproductive
d. All of the above are implicit costs.
Implicit cost is equal to
a. business profit minus economic profit.
b. business profit plus economic profit.
c. economic profit minus business profit.
d. economic profit minus explicit cost.
Which theory of profit holds that profit will be higher in industries characterized by a high degree of variability in their revenues or their costs?
a. Risk-bearing theory
b. Frictional theory
c. Monopoly theory
d. Innovation theory
Which theory of profit holds that profit will be higher in industries where firms in the industry are able to prevent other firms to any behavior by businesses that may
a. be illegal.
on the health of consumers?
c. Should a firm engage in illegal practices?
d. Should a firm use a production method in foreign countries that is banned in its home count
Answer:
The theory of Firm is not included in the scope of Industrial Economics.
Explanation:
- Business Economics addresses the bulk of problems that management or establishments face. As a result, business economics has a wide range of applications.
- Through production analysis, the company may choose the best technology for an output creation process that is technically efficient.
- Contrarily, cost analysis enables the business to track how expenses behave when factors like production, time, and plant size change.
- Managerial Economics focuses on using economic principles, theories, tools, and approaches to address real-world business issues.
- In other words, management economics combines managerial theory with economics theory.
- It supports the manager's decision-making and serves as a bridge between theory and practice.
- The field of economics known as business economics applies microeconomic analysis to corporate or other management units' decision-making processes.
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