mr.rashed.ali
kj;j;jSAMPLE TEST QUESTIONS FOR CHAPTERS 1-5
1. If a decision is to be sensible, what must be incorporated?
a. A listing of the alternative courses of action.
b. Determining how varying the assumptions affects the problem.
c. A statement of goals and objectives.
d. A comparison of the advantages and disadvantages of alternative courses of action.
e. All of the above.
2. Sensitivity analysis can best be defined as
a. being sensitive to the wishes of decision-makers.
b. being sensitive to the impacts of decisions on others.
c. measuring results against objectives.
d. examining the reliability of key data used to make a decision.
e. examining how a decision would change if key facts were changed.
3. Is benefit-cost analysis an unambiguous guide to decision making in the public sector?
a. No, because of the timing of the benefits and costs.
b. No, because public sector managers may disagree about the best means to obtain the benefits and costs.
c. Yes. It offers clear results and ease in decision making.
d. Yes, although it is not as simple as the rules for profit maximization.
4. Which of the following might cause managers to fail to maximize the value of the firm?
a. They have objectives that conflict with value maximization.
b. They may have incomplete information upon which to act.
c. They may fail to undertake analysis for value maximization.
d. They may fail to implement decisions that lead to value maximization.
e. All of the above.
5. In applying benefit-cost analysis to public-sector decisions, which rule is used?
a. Undertake a project only if it generates sufficient revenues.
b. Undertake a project only if total benefits for all affected groups exceed total costs.
c. Undertake a project only if marginal benefits exceed average costs.
d. Undertake a project only if total benefits to government exceed total costs to government.
e. Undertake a project only if profits of the agency exceed the cost of the
1. If a decision is to be sensible, what must be incorporated?
a. A listing of the alternative courses of action.
b. Determining how varying the assumptions affects the problem.
c. A statement of goals and objectives.
d. A comparison of the advantages and disadvantages of alternative courses of action.
e. All of the above.
2. Sensitivity analysis can best be defined as
a. being sensitive to the wishes of decision-makers.
b. being sensitive to the impacts of decisions on others.
c. measuring results against objectives.
d. examining the reliability of key data used to make a decision.
e. examining how a decision would change if key facts were changed.
3. Is benefit-cost analysis an unambiguous guide to decision making in the public sector?
a. No, because of the timing of the benefits and costs.
b. No, because public sector managers may disagree about the best means to obtain the benefits and costs.
c. Yes. It offers clear results and ease in decision making.
d. Yes, although it is not as simple as the rules for profit maximization.
4. Which of the following might cause managers to fail to maximize the value of the firm?
a. They have objectives that conflict with value maximization.
b. They may have incomplete information upon which to act.
c. They may fail to undertake analysis for value maximization.
d. They may fail to implement decisions that lead to value maximization.
e. All of the above.
5. In applying benefit-cost analysis to public-sector decisions, which rule is used?
a. Undertake a project only if it generates sufficient revenues.
b. Undertake a project only if total benefits for all affected groups exceed total costs.
c. Undertake a project only if marginal benefits exceed average costs.
d. Undertake a project only if total benefits to government exceed total costs to government.
e. Undertake a project only if profits of the agency exceed the cost of the