Davenport ECON625 midterm Exam
Question
Question 1
The economic concept of "opportunity cost" is most closely associated with which of the
following management considerations?
market structure
resource scarcity
product demand
technology
Question 2
Scarcity is a condition that exists when
there is a fixed supply of resources relative to the demand for the product.
there is a large demand for a product.
resources are not able to meet the entire demand for a product.
All of these
Question 3
A critical element of entrepreneurship (as opposed to managerial skills) is
leadership skills.
risk taking.
technology.
political skills.
, Question 4
A large corporation's profit objective may not be profit or wealth maximization, because
stockholders have little power in corporate decision making.
management is more interested in maximizing its own income.
managers are overly concerned with their own survival and may not take all prudent risks.
All of these
Question 5
Unlike an accountant, an economist measures costs on a(n) ________ basis.
explicit
replacement
historical
conservative
Question 6
A firm's "normal profit" is best characterized by the
average of a firm's profits over the past five years.
amount of profit necessary to keep the price of a firm's stock from changing.
amount of profit a firm could earn in its next best alternative activity.
the average amount of profit earned in the firm's industry.
Question 7
If the price of a substitute increases, which of the following is most likely to happen in the
market for the product under consideration in the short run?
Supply will increase.
Firms will leave the market.
Question
Question 1
The economic concept of "opportunity cost" is most closely associated with which of the
following management considerations?
market structure
resource scarcity
product demand
technology
Question 2
Scarcity is a condition that exists when
there is a fixed supply of resources relative to the demand for the product.
there is a large demand for a product.
resources are not able to meet the entire demand for a product.
All of these
Question 3
A critical element of entrepreneurship (as opposed to managerial skills) is
leadership skills.
risk taking.
technology.
political skills.
, Question 4
A large corporation's profit objective may not be profit or wealth maximization, because
stockholders have little power in corporate decision making.
management is more interested in maximizing its own income.
managers are overly concerned with their own survival and may not take all prudent risks.
All of these
Question 5
Unlike an accountant, an economist measures costs on a(n) ________ basis.
explicit
replacement
historical
conservative
Question 6
A firm's "normal profit" is best characterized by the
average of a firm's profits over the past five years.
amount of profit necessary to keep the price of a firm's stock from changing.
amount of profit a firm could earn in its next best alternative activity.
the average amount of profit earned in the firm's industry.
Question 7
If the price of a substitute increases, which of the following is most likely to happen in the
market for the product under consideration in the short run?
Supply will increase.
Firms will leave the market.
