1
Test Bank for Economics for Managers 2nd Edition
I I I I I I I
Part 1 I I
Which Iof Ithe Ifollowing Istatements Iis Icorrect?
1. A) IBy Iand Ilarge, Imanagerial Idecisions Iare Inot Iaffected Iby Ieither microeconomicI Ior
I macroeconomic Iforces.
2. B) IManagerial Idecisions Iare Iaffected Iprimarily Iby Imacroeconomic Iforces.
3. C) IManagerial Idecisions Iare Iaffected Iby Iboth Imicroeconomic Iand macroeconomicI
I forces.
4. D) IManagerial Idecisions Iare Iaffected Iprimarily Iby Imicroeconomic Iforces.
Walmartʹs Idecision Iin I1994 Ito Icontinue Ioperating Istores Iin Ispecific Icities Iin MexicoI Iwhen
Iother Ifirms Iwere Ipulling Iout Iwould Ibe Ibest Iclassified Ias:
1. A) Ia Imicroeconomic Idecision.
2. B) Ia Imacroeconomic Idecision.
3. C) Iboth Ia Imicroeconomic Iand Ia Imacroeconomic Idecision.
4. D) Ineither Ia Imicroeconomic Inor Ia Imacroeconomic Idecision.
Which Iof Ithe Ifollowing Iwould Ibe Iconsidered Ian Iexample Iof Ia macroeconomicI Iproblem?
1. A) IShould IMicrosoft Ireduce Ithe Iprice Iof Iits IWindows Ioperating Isystem?
2. B) IShould IJP IMorgan IChase Iincrease Ithe Iinterest Irate Iit Icharges Iits Icredit cardI
I customers?
3. C) IShould IMitsubishi Ieliminate Ione Iof Iits Iproduction Ishifts?
4. D) IShould Ithe Ifederal Igovernment Iextend Ithe Ieligibility Iperiod Ifor unemploymentI
I benefits?
Walmartʹs Ientry Iinto Ithe Imarket Iin IMexico Ihad Ithe Ieffect Iof:
1. A) Ireducing Icompetition Iand Iraising Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
2. B) Iincreasing Icompetition Iand Iraising Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
3. C) Iincreasing Icompetition Iand Ilowering Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
4. D) Ireducing Icompetition Iand Ilowering Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
Page 1 of 330
,2
Which Iof Ithe Ifollowing Istatements Iis Ifalse?
1. A) IWhile Imanagers Imust Iunderstand Ihow Ioutput Iprices Iare Idetermined,
determinationI Iof Iinput Iprices Iis Iirrelevant Ibecause Iit Iis Ibeyond Ithe Imanagerʹs
Icontrol.
2. B) IPrice Idetermination Iis Ithe Ikey Ielement Iin Iany Imarket Isystem.
3. C) IInput Iprices Iinfluence Ia Ifirmʹs Icosts Iof Iproduction.
4. D) IOutput Iprices Iinfluence Ia Ifirmʹs Irevenues.
All Ielse Iconstant, Ithe Ichoice Iof Iwhether Ito Iuse Ia Ilabor-intensive Iproduction processI Ior Ia
Icapital-intensive Ione Iis Idepends Ion:
1. A) Ithe Iabsolute Iprices Iof Icapital Iand Ilabor.
2. B) Iwhether Ithe Ieconomy Iis Igrowing Ior Ishrinking.
3. C) Ithe Irelative Iprices Iof Icapital Ilabor.
4. D) Ithe Itype Iof Imarket Iin Iwhich Ithe Ifirm Ioperates.
Which Iof Ithe Ifollowing Iis Inot Ia Icharacteristic Iof Ia Iperfectly Icompetitive market?I
1. A) ILimited Iinformation Iis Iavailable Ito Iall Imarket Iparticipants.
2. B) IEase Iof Ientry Iinto Ithe Imarket.
3. C) IOutputs Iof Ithe Ifirms Iare Iperfect Isubstitutes Ifor Ione Ianother.
4. D) ILarge Inumber Iof Ifirms Iin Ithe Iindustry.
Firms Iare Iconsidered Ito Ibe Iprice Isearchers, Ias Iopposed Ito Iprice Itakers, IinallI Iof Ithe
Ifollowing Imarket Itypes Iexcept:
1. A) Imonopoly.
2. B) Iperfect Icompetition.
3. C) Ioligopoly.
4. D) Imonopolistic Icompetition.
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,3
Which Iof Ithe Ifollowing Iconditions Iensures Ithat Iexcess Iprofits Icannotpersist I Iin Ia Iperfectly
Icompetitive Imarket Iover Ithe Ilong Irun?
1. A) ILarge Inumber Iof Ifirms Iin Ithe Iindustry.
2. B) IComplete Iinformation Iis Iavailable Ito Iall Imarket Iparticipants.
3. C) IOutputs Iof Ithe Ifirms Iare Iperfect Isubstitutes Ifor Ione Ianother.
4. D) IEase Iof Ientry Iinto Ithe Imarket.
Which Iof Ithe Ifollowing Istatements Iis Icorrect?
1. A) IAll Ielse Iconstant, Ia Imonopoly Ifirm Ihas Imore Imarket Ipower Ithan Ia monopolisticallyI
I competitive Ifirm.
2. B) IThe Ifact Ithat Ithe Ifirms Iin Ian Ioligopoly Iare Imutually Iinterdependent meansI Ithat
I individual Ifirms Ido Inot Ihave Iany Imarket Ipower.
3. C) IThe Iamount Iof Imarket Ipower Ia Ifirm Ipossesses Iis Iunrelated Ito Ithe Itype ofI Imarket Iin
I which Iit Ioperates.
4. D) ISo Ilong Ias Ia Ifirm Iis Isufficiently Ilarge, Iit Iwill Ihave Isome Iamount Iof marketI Ipower,
I regardless Iof Ithe Itype Iof Imarket Iin Iwhich Iit Ioperates.
The Imarket Istructure Ithat Iis Icharacterized Iby Ia Ismall Inumber Iof Ilarge Ifirms thatI Ihave Isome
Imarket Ipower Iis Icalled:
1. A) Ioligopoly.
2. B) Imonopoly.
3. C) Iperfect Icompetition.
4. D) Imonopolistic Icompetition.
Which Iof Ithe Ifollowing Imarket Istructures Iis Imost Isimilar Ito Iperfect competition?I
1. A) IMonopolistic Icompetition.
2. B) IMonopsony.
3. C) IMonopoly.
4. D) IOligopoly.
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, 4
The Ikey Icharacteristic Iof Ian Ioligopolistic Imarket Iis:
1. A) Imutual Iinterdependence Iamong Ifirms Iin Ithe Imarket.
Page 4 of 330
Test Bank for Economics for Managers 2nd Edition
I I I I I I I
Part 1 I I
Which Iof Ithe Ifollowing Istatements Iis Icorrect?
1. A) IBy Iand Ilarge, Imanagerial Idecisions Iare Inot Iaffected Iby Ieither microeconomicI Ior
I macroeconomic Iforces.
2. B) IManagerial Idecisions Iare Iaffected Iprimarily Iby Imacroeconomic Iforces.
3. C) IManagerial Idecisions Iare Iaffected Iby Iboth Imicroeconomic Iand macroeconomicI
I forces.
4. D) IManagerial Idecisions Iare Iaffected Iprimarily Iby Imicroeconomic Iforces.
Walmartʹs Idecision Iin I1994 Ito Icontinue Ioperating Istores Iin Ispecific Icities Iin MexicoI Iwhen
Iother Ifirms Iwere Ipulling Iout Iwould Ibe Ibest Iclassified Ias:
1. A) Ia Imicroeconomic Idecision.
2. B) Ia Imacroeconomic Idecision.
3. C) Iboth Ia Imicroeconomic Iand Ia Imacroeconomic Idecision.
4. D) Ineither Ia Imicroeconomic Inor Ia Imacroeconomic Idecision.
Which Iof Ithe Ifollowing Iwould Ibe Iconsidered Ian Iexample Iof Ia macroeconomicI Iproblem?
1. A) IShould IMicrosoft Ireduce Ithe Iprice Iof Iits IWindows Ioperating Isystem?
2. B) IShould IJP IMorgan IChase Iincrease Ithe Iinterest Irate Iit Icharges Iits Icredit cardI
I customers?
3. C) IShould IMitsubishi Ieliminate Ione Iof Iits Iproduction Ishifts?
4. D) IShould Ithe Ifederal Igovernment Iextend Ithe Ieligibility Iperiod Ifor unemploymentI
I benefits?
Walmartʹs Ientry Iinto Ithe Imarket Iin IMexico Ihad Ithe Ieffect Iof:
1. A) Ireducing Icompetition Iand Iraising Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
2. B) Iincreasing Icompetition Iand Iraising Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
3. C) Iincreasing Icompetition Iand Ilowering Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
4. D) Ireducing Icompetition Iand Ilowering Ithe Iprices Iof Imany Iof Ithe Igoods Iit sells.I
Page 1 of 330
,2
Which Iof Ithe Ifollowing Istatements Iis Ifalse?
1. A) IWhile Imanagers Imust Iunderstand Ihow Ioutput Iprices Iare Idetermined,
determinationI Iof Iinput Iprices Iis Iirrelevant Ibecause Iit Iis Ibeyond Ithe Imanagerʹs
Icontrol.
2. B) IPrice Idetermination Iis Ithe Ikey Ielement Iin Iany Imarket Isystem.
3. C) IInput Iprices Iinfluence Ia Ifirmʹs Icosts Iof Iproduction.
4. D) IOutput Iprices Iinfluence Ia Ifirmʹs Irevenues.
All Ielse Iconstant, Ithe Ichoice Iof Iwhether Ito Iuse Ia Ilabor-intensive Iproduction processI Ior Ia
Icapital-intensive Ione Iis Idepends Ion:
1. A) Ithe Iabsolute Iprices Iof Icapital Iand Ilabor.
2. B) Iwhether Ithe Ieconomy Iis Igrowing Ior Ishrinking.
3. C) Ithe Irelative Iprices Iof Icapital Ilabor.
4. D) Ithe Itype Iof Imarket Iin Iwhich Ithe Ifirm Ioperates.
Which Iof Ithe Ifollowing Iis Inot Ia Icharacteristic Iof Ia Iperfectly Icompetitive market?I
1. A) ILimited Iinformation Iis Iavailable Ito Iall Imarket Iparticipants.
2. B) IEase Iof Ientry Iinto Ithe Imarket.
3. C) IOutputs Iof Ithe Ifirms Iare Iperfect Isubstitutes Ifor Ione Ianother.
4. D) ILarge Inumber Iof Ifirms Iin Ithe Iindustry.
Firms Iare Iconsidered Ito Ibe Iprice Isearchers, Ias Iopposed Ito Iprice Itakers, IinallI Iof Ithe
Ifollowing Imarket Itypes Iexcept:
1. A) Imonopoly.
2. B) Iperfect Icompetition.
3. C) Ioligopoly.
4. D) Imonopolistic Icompetition.
Page 2 of 330
,3
Which Iof Ithe Ifollowing Iconditions Iensures Ithat Iexcess Iprofits Icannotpersist I Iin Ia Iperfectly
Icompetitive Imarket Iover Ithe Ilong Irun?
1. A) ILarge Inumber Iof Ifirms Iin Ithe Iindustry.
2. B) IComplete Iinformation Iis Iavailable Ito Iall Imarket Iparticipants.
3. C) IOutputs Iof Ithe Ifirms Iare Iperfect Isubstitutes Ifor Ione Ianother.
4. D) IEase Iof Ientry Iinto Ithe Imarket.
Which Iof Ithe Ifollowing Istatements Iis Icorrect?
1. A) IAll Ielse Iconstant, Ia Imonopoly Ifirm Ihas Imore Imarket Ipower Ithan Ia monopolisticallyI
I competitive Ifirm.
2. B) IThe Ifact Ithat Ithe Ifirms Iin Ian Ioligopoly Iare Imutually Iinterdependent meansI Ithat
I individual Ifirms Ido Inot Ihave Iany Imarket Ipower.
3. C) IThe Iamount Iof Imarket Ipower Ia Ifirm Ipossesses Iis Iunrelated Ito Ithe Itype ofI Imarket Iin
I which Iit Ioperates.
4. D) ISo Ilong Ias Ia Ifirm Iis Isufficiently Ilarge, Iit Iwill Ihave Isome Iamount Iof marketI Ipower,
I regardless Iof Ithe Itype Iof Imarket Iin Iwhich Iit Ioperates.
The Imarket Istructure Ithat Iis Icharacterized Iby Ia Ismall Inumber Iof Ilarge Ifirms thatI Ihave Isome
Imarket Ipower Iis Icalled:
1. A) Ioligopoly.
2. B) Imonopoly.
3. C) Iperfect Icompetition.
4. D) Imonopolistic Icompetition.
Which Iof Ithe Ifollowing Imarket Istructures Iis Imost Isimilar Ito Iperfect competition?I
1. A) IMonopolistic Icompetition.
2. B) IMonopsony.
3. C) IMonopoly.
4. D) IOligopoly.
Page 3 of 330
, 4
The Ikey Icharacteristic Iof Ian Ioligopolistic Imarket Iis:
1. A) Imutual Iinterdependence Iamong Ifirms Iin Ithe Imarket.
Page 4 of 330
