Question

1. Which of the following is not one of the steps in managerial decision making?

a) Predicting the consequences of a decision.

b) Exploring the alternatives to the decision.

c) Defining the problem and the objectives of the decision.

d) Negotiating a consensus to implement the decision.

e) Performing sensitivity analysis.

2. If a firm’s profit is given by p = -150 + 360Q - 36Q2, then its optimal output is:

a) 12 units.

b) 5 units.

c) 2 units.

d) 20 units.

e) 36 units.

3. Calculate the sum of squared errors of the observations from the Table below.

The following table shows the predicted and the actual sales of a firm in the quarters of a year.

a) 20

b) 34

c) 18

d) 22

e) 15

4. The standard error of the regression:

a) measures the explanatory power of the regression equation and lies between 0 and 1.

b) measures the explained variation in the dependent variable.

c) measures the unexplained variation in the dependent variable.

d) is equal to the sum of squared errors minus the total sum of squares.

e) is equal to the slope of the regression equation.

5. Which of the following is true in the long-run?

a) A firm can vary all the inputs used in production.

b) A firm can vary only one of the inputs used in production.

c) All inputs used in production are fixed in the long-run.

d) The level of output produced can be varied only over a limited range.

e) The marginal cost is at a minimum.

6. Refer to the Table below. What is the marginal product of the 5th worker?

The following table shows the total output produced in a factory at various levels of employment of labor. The firm sells each unit of output at $2 and each worker is paid a wage of $32.

a) 9 units

b) 2 units

c) 8 units

d) 6 units

e) 11 units

Answer 1

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