Essay on Managerial Economics
A Problem-Solving Approach
End-of-Chapter Questions and Answers
Table of Contents
Chapters 1 and 2 - Introduction and The One Lesson of Business 5 Multiple Choice Questions 5 Multiple Choice Key 5 Short Answer Questions 6 Short Answer Key 6 Chapter 3 - Benefits, Costs, and Decisions 8 Multiple Choice Questions 8 Multiple Choice Key 8 Short Answer Questions 9 Short Answer Key 10 Chapter 4 - Extent (How Much) Decisions 11 Multiple Choice Questions 11 Multiple Choice Key 12 Short Answer Questions 12 Short Answer Key 13 Chapter 5 - Investment Decisions: Look Ahead and Reason Back 15 Multiple Choice Questions 15 Multiple Choice Key 15 …show more content…
Figure out how to profitably consummate the unconsummated wealth-creating transaction created by rent control.
Defenders of communist economic systems may point out that consumers pay lower prices for certain goods because the government imposes a limit on what producers may charge. Cite at least two other ways that consumers may be “paying” for these goods.
Consider a seller who values a car at $9,500 and a buyer who values the same car at $10,000. What total surplus will result from a transaction between the two when the seller is faced with the following sales tax rates: 0%, 2%, 4%, 6%, and 8%?
Short Answer Key
With individual ownership of property, owners keep the value they create by moving assets to higher-valued uses thereby creating an incentive to engage in such transactions.
Goal Alignment at a Small Manufacturing Company
No. Both the purchase price and the profit sharing create perverse incentives. The VP keeps $0.75 of each dollar earned up to $150,000, but only $0.10 of each dollar earned after $150K. Since earning more requires more effort (increasing marginal effort), our student has little incentive