ECN 5050 MC1

Question 1
4 out of 4 points

Economic theory is a valuable tool for business decision making because it

Selected Answer: identifies for managers the essential information for making a decision.

Question 2
4 out of 4 points

Consider a firm that employs some resources that are owned by the firm. When accounting profit is zero, economic profit

Selected Answer: must be negative and shareholder wealth is reduced.

Question 3
4 out of 4 points

Suppose Marv, the owner-manager of Marv’s Hot Dogs, earned $72,000 in revenue last year. Marv’s explicit costs of operation totaled $36,000. Marv has a Bachelor of Science degree in mechanical engineering and could be earning $30,000 annually as mechanical engineer.

Selected Answer: both b and c

Question 4
4 out of 4 points

Owners of a firm want the managers to make business decisions that will

Selected Answer: both a and b are correct when revenue and cost conditions in one time period are independent of revenues and costs in future time periods.

Question 5
4 out of 4 points

When a firm is a price-taking firm,

Selected Answer: all of the above

Question 6
4 out of 4 points

Economic profit is the best measure of a firm’s performance because

Selected Answer: the opportunity cost of using ALL resources is subtracted from total revenue.

Question 7
4 out of 4 points

Which of the following is an example of an implicit cost for a firm?

Selected Answer:
d. both a and c

Question 8
4 out of 4 points

St. Charles Hospital, located in an upper-income neighborhood of a large city, recently received a restored mansion as a gift from an appreciative patient. The board of directors decided to remodel the mansion and use it as recuperative quarters for patients willing to pay a premium for luxurious accommodations. The cost to the hospital of using the mansion includes

Selected Answer: both b and c

Question 9
4 out of 4 points

Until