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Test Bank For Managerial Economics and Strategy 3rd Edition by Perloff
Test Bank For Managerial Economics and Strategy 3rd Edition by Perloff
2
Copyright © 2020 Pearson Education, Inc.
5) Profit is
A) maximized when the marketing department coordinates with the production department.
B) maximized when revenue is maximized.
C) used to beat a company's rivals.
D) the difference between a firm's revenues and its costs.
Answer: D
Skill: Definition
AACSB: Analytical Thinking
Status: Old
8) A market
A) always involves the personal exchange of goods for money.
B) allows interactions between consumers and firms.
C) always takes place at a physical location.
D) has no influence on prices.
Answer: B
Skill: Conceptual
AACSB: Analytical Thinking
Status: Old
3
Copyright © 2020 Pearson Education, Inc.
9) In a market,
A) the primary participants are consumers and firms.
B) government policies play a very small part.
C) decision makers always maximize.
D) the goods sold are not closely related.
Answer: A
Skill: Conceptual
AACSB: Analytical Thinking
Status: New
10) Which of the following would NOT be considered part of a firm's strategy?
A) production levels
B) which inputs to use
C) sales strategy
D) None of the above—all are part of a firm's strategy.
Answer: D
Skill: Conceptual
AACSB: Analytical Thinking
Status: Old
12) Explain what the statement "We can't have everything we want" means.
Answer: Because resources are scarce, we face tradeoffs. For example, a baker cannot use a
piece of dough she has for both pizza and a croissant, so she has to decide which to make.
Skill: Conceptual
AACSB: Reflective Thinking
Status: Old
4
Copyright © 2020 Pearson Education, Inc.
15) Why might raising the price of a good by a dollar lead to lower profits?
Answer: If the extra profit margin made on the units sold does not cover the lost profit from
selling fewer units, then profits will actually decrease if the price is raised.
Skill: Analytical
AACSB: Analytical Thinking
Status: Old
16) Why might raising the price of a good by a dollar lead to higher profits?
Answer: If the extra profit margin made on the units sold covers the profit lost from selling
fewer units, then profits will increase if the price is raised.
Skill: Analytical
AACSB: Analytical Thinking
Status: Old
For the following, please answer "True" or "False" and explain why.
5
Copyright © 2020 Pearson Education, Inc.
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