#1
In the context of decision-making, what does the term 'opportunity cost' refer to?
The value of the best alternative forgone
ExplanationThe value of the next best alternative not chosen when making a decision.
#2
Which type of cost changes with the level of output or production?
Variable cost
ExplanationCosts that vary with the level of production or output.
#3
Which cost remains constant per unit of output in the short run in managerial economics?
Fixed cost
ExplanationCosts that do not vary with the level of production in the short run.
#4
Which of the following is a characteristic of perfect competition in managerial economics?
Price taker behavior
ExplanationFirms accept market price as given due to numerous buyers and sellers.
#5
In the context of managerial economics, what does the term 'sunk cost' refer to?
Irrecoverable costs incurred in the past
ExplanationCosts that have been already incurred and cannot be recovered.
#6
Which of the following is a characteristic of a monopoly market structure in managerial economics?
Single seller dominating the market
ExplanationA single seller controls the market, setting prices and quantity.
#7
What does the term 'marginal utility' refer to in managerial economics?
The additional satisfaction gained from consuming one more unit of a good
ExplanationThe extra satisfaction or utility gained from consuming an additional unit of a good.
#8
Which decision-making approach involves making choices based on intuition, judgment, and experience rather than quantitative analysis?
Intuitive approach
ExplanationDecisions made based on gut feeling, experience, and instinct rather than quantitative data.
#9
Which decision-making tool involves considering the potential outcomes of various decision alternatives in managerial economics?
Game theory
ExplanationAnalyzing strategic interactions among decision-makers to maximize outcomes.
#10
What is the primary goal of profit maximization in managerial economics?
To maximize the difference between total revenue and total cost
ExplanationAchieving the highest possible profit by optimizing revenue and cost.
#11
What is the relationship between marginal cost (MC) and marginal revenue (MR) at the profit-maximizing level of output in a perfectly competitive market?
MC = MR
ExplanationAt the profit-maximizing level, the marginal cost equals the marginal revenue.
#12
What is the purpose of sensitivity analysis in decision-making?
To analyze the impact of changes in key variables on decision outcomes
ExplanationAssessing how changes in variables affect decision outcomes or results.
#13
In decision-making, what is the role of a decision tree?
To represent the sequential steps of a decision process
ExplanationA graphical representation of the decision-making process, showing possible outcomes and their probabilities.