- 1. Managerial economics is a branch of economics that applies economic theory and quantitative methods to analyze business and management decisions. It helps business managers make optimal decisions by providing tools and frameworks to understand how firms behave in various market conditions and competitive environments. This discipline focuses on topics such as cost analysis, pricing strategies, demand forecasting, risk management, and decision-making under uncertainty. By utilizing economic principles and techniques, managerial economics assists managers in maximizing profits, minimizing costs, and effectively allocating resources to achieve the long-term goals of the organization.
What is the primary goal of managerial economics?
A) Maximizing revenue
B) Achieving revenue targets
C) Minimizing costs
D) Maximizing profits
- 2. Which of the following is not a characteristic of a perfect competition market structure?
A) Homogenous products
B) Large number of buyers and sellers
C) Perfect information
D) High barriers to entry
- 3. What is the term that describes the additional cost incurred to produce one more unit of a good or service?
A) Variable cost
B) Fixed cost
C) Marginal cost
D) Average cost
- 4. Which of the following is a non-price competition strategy?
A) Discounts
B) Product differentiation
C) Seasonal sales
D) Price matching
- 5. In which market structure are there few sellers offering similar or identical products?
A) Oligopoly
B) Monopolistic competition
C) Monopoly
D) Perfect competition
- 6. What type of market structure is characterized by a single seller with significant control over price?
A) Perfect competition
B) Oligopoly
C) Monopolistic competition
D) Monopoly
- 7. What does the price elasticity of demand measure?
A) Cost of production
B) Total revenue
C) Government subsidies
D) Responsiveness of quantity demanded to price changes
- 8. What does the term 'opportunity cost' refer to in economics?
A) The actual cost of producing a good
B) The profit margin
C) The value of the next best alternative foregone
D) The total cost of production
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