Question 6 of 30

According to the textbook, what is the primary focus of managerial economics?

What is the key distinction between accounting profits and economic profits?

An entrepreneur invests $50,000 of her own money to start a business. Her explicit costs per year are $80,000 and her revenues are $150,000. She could have earned $60,000 per year working for another firm. What are her economic profits?

What is the primary role of economic profits in a free-market economy?

Which of the following is NOT one of the five forces that impact the sustainability of industry profits according to Michael Porter's framework?

A firm is considering a project that costs $500,000 today. The project will generate year-end cash flows of $100,000 in year 1, $250,000 in year 2, and $300,000 in year 3. If the interest rate is 10 percent, what is the Net Present Value (NPV) of the project?

In the context of marginal analysis, when should a manager stop increasing the level of a control variable (like advertising or production)?

In the Slick Drilling Inc. example on page 58 (Table 1-2), what are the incremental revenues from adopting the new drilling project?

According to the textbook, consumer-producer rivalry, consumer-consumer rivalry, and producer-producer rivalry are three sources of rivalry that limit the power of buyers and sellers in what process?

What is the value of a firm whose current profits are $550,000 and are expected to grow at a constant rate of 5 percent indefinitely, given an opportunity cost of funds of 8 percent?

Why was the manager in the Amcott headline case on page 34 fired?

Based on the data in Table 1-1 on page 53, what is the marginal cost of the fifth unit of the control variable Q?

An engineering firm's benefit and cost structure is given by B(Y) = 300Y - 6Y squared and C(Y) = 4Y squared. What level of Y maximizes net benefits?

What is meant by consumer-consumer rivalry?

In the context of the five forces framework, which of the following scenarios describes a high power of input suppliers?

If a manager must choose between two projects, one offering a certain profit of $5 million and another offering an expected profit of $5 million but with high variance, a risk-averse manager would:

The principle of marginal analysis states that optimal managerial decisions involve comparing the:

What does it mean for a manager to 'produce on the production function'?

In the airline club membership example in 'Inside Business 1-3', what is the present value of paying for a three-year membership annually at $125 per year, given a 5 percent interest rate?

A manager is defined as a person who:

The value of a firm is defined as the:

In the context of the five forces framework, which statement best describes the 'substitutes and complements' force?

When a firm's manager considers an incremental decision, such as the Slick Drilling Inc. project, which costs should be considered relevant?

What is the value of a preferred stock that pays a perpetual dividend of $75 at the end of each year when the interest rate is 4 percent?

According to the principle of maximizing short-term versus long-term profits, when does maximizing current (short-term) profits also maximize the value of the firm (long-term profits)?

What is the primary reason that a manager should ignore sunk costs when making decisions?

A computer firm that spends more resources on advertising has fewer resources to invest in research and development. This situation is an example of:

In the pizzeria example on page 39, the owner's accounting profit is $80,000. If the opportunity cost of the owner's time is $30,000 and the forgone rental value of the building is $100,000, what is the economic profit?

Which of the six principles of effective management deals with the fact that a dollar today is worth more than a dollar received in the future?