IVY SOFTWARE MBA PREPWORKS MANAGERIAL
ACCOUNTING EXAM 2024 NEWEST 2 VERSIONS
COMPLETE 300 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED
A+|| BRAND NEW!
The main concept demonstrated in the production possibilities frontier is - ANSWER:
Opportunity cost
When country A has a lower opportunity cost of producing sugar relative to country
B, then country A is said to have - ANSWER: Comparative Advantage
A graph that shows the combinations of two goods that the economy can produce
given the available scarce resources and available technology is called a - ANSWER:
Production Possibilities Frontier
Assume a production possibilities frontier for pickup trucks and big Mac hamburgers.
The economy is producing 20 big Mac hamburgers and 65 pickup trucks (point 20,
65). What is the opportunity cost of producing an additional 20 Big Mac hamburgers
(point 40, 60)? - ANSWER: Five Pickup Trucks
The opportunity cost of an item is - ANSWER: whatever must be given up to obtain
the item.
Consider market for pork, suppose that price of beef, a substitute for pork, increases.
Because of the change in price of beef, the equilibrium price of pork...? - ANSWER:
Increases
Consider the market for pork, suppose that the price of beef, a substitute for pork,
increases. Because of this change in the price of beef, the equilibrium quantity of
pork will...? - ANSWER: Increase because increase in price of beef causes demand
curve for pork to shift North East. B/c of this shift, the equilibrium quantity of pork
will increase.
Consider the market for pork. Suppose that the price of hog feed, an input to the
production of pork, increases. Because of that change in the price of hog feed, the
equilibrium quantity of pork ...? - ANSWER: Decreases because the increase in price
of hog feed causes the supply curve for pork to shift NW. B/c of this shift, the
quantity of pork decreases.
Consider the market for pork. Suppose that disposable income increases and pork is
an inferior good. Because of that change in income, the equilibrium price of pork...? -
ANSWER: Decreases because the increase in disposable income causes the demand
curve for pork to shift south west, because pork is an inferior good. because of this
shift, the equilibrium price of pork decreases.
,Consider the market for pork. Suppose that 1) disposable income increases and pork
is a normal good, And 2) the price of hog feed decreases. Because of these changes,
the equilibrium price of pork is... - ANSWER: Indeterminate because the increase in
disposable income causes the demand curve for pork to shift north east because
pork is a normal good. The decrease in price of hog feed causes the supply curve to
shift to the south east. The net effect of these shifts leaves us unable to say waht will
happen to the equilibrium price of pork.
Consider the market for pork. Suppose that disposable income increases and pork is
a normal good and the price of hog feed decreases. The equilibrium quantity of
pork...? - ANSWER: Increases.
Suppose the price elasticity for demand for retail phone service in the US is 0.95. If
the # of retail substitutes for retail telephone service increases, will the price
elasticity of demand become more elastic or more inelastic? - ANSWER: Elastic.
When the number of substitute products increases, the price elasticity of demand
will become more elastic. consumers become more sensitive to price when they
have more options to chose among.
True or False: the law of demand states that if the price of a good increases, CP, then
the quantity demanded of that good will increase. - ANSWER: False. quantity
demanded of that good will decrease.
Suppose the cross-price elasticity of demand for home heating oil with respect to the
price of natural gas is +0.6. This number tells us that home heating oil and natural
gas are substitute or compliment goods? - ANSWER: Substitute goods. When the
cross price elasticity is positive then they are substitutes.
Consider the market for mustard which is a complement to hot dogs. Suppose the
price of hot dogs increase. What happens to the equilibrium price and equilibrium
quantity of the mustard market? - ANSWER: Equilibrium price decreases and
equilibrium quantity decreases. The price of hot dogs is an independent variable in
the demand function for mustard. This is because hot dogs and mustard are
complementary goods. Therefore, if the price of hot dogs increases, then the
demand curve for mustard shifts to the south-west. People demand less mustard at
every price when hot dogs are more expensive. In the mustard market, the
equilibrium price decreases and equilibrium quantity decreases.
profit maximizing rule - ANSWER: a business maximizes profits when it produces
where the marginal revenue from selling another unit equals the marginal cost of
producing another unit.
Marginal Revenue=Marginal Cost
, Marginal cost - ANSWER: is equal to the change in the total cost that arises from an
extra unit of production. It is calculated by taking the change in total cost and
dividing it by the change in the quantity produced
=change in TC/change in Q
Marginal revenue - ANSWER: is the change in total revenue generated from an
additional unit sold. It is calculated by taking the change in total revenue divided by
the change in quantity sold
Short Run - ANSWER: a time horizon where some fixed costs exist.
is a time horizon within which a business is unable to adjust at least one input
because there is a fixed cost of some kind.
we think in terms of the short run not the long run
Long Run - ANSWER: a situation where the fixed costs (the inputs) become variable.
a time horizon long enough for the seller to adjust all inputs. If you observe a
business with no fixed costs, then it is in a long run state.
\when prices remain low for a very long period of time, then the business moves into
a long run decision mode. In the long run there are no fixed costs.
fixed costs - ANSWER: costs that do not vary with changes in the quantity produced.
what expenses must be paid even if production equals zero?
variable costs - ANSWER: costs that do vary with changes in the quantity produced
total cost - ANSWER: equals the sum of the fixed costs and variable costs
TC=VC+FC
average fixed cost - ANSWER: equals fixed cost divided by quantity produced
AFC= TC/Q
average variable cost - ANSWER: equals variable cost divided by the quantity
produced
average total cost - ANSWER: equals the total cost divided by the quantity produced,
or it is the sum of average fixed cost plus average variable cost
sunk cost - ANSWER: a cost that has already been committed and cannot be
recovered
joint costs - ANSWER: costs that do not change with changes in the scope of
production. economies of scope arise when there are joint costs. (ie: comcast
purchasing NBC universal).
perfect competition - ANSWER: occurs in an industry in which
- there are many buyers and many sellers
- an industry in which the good is homogeneous
ACCOUNTING EXAM 2024 NEWEST 2 VERSIONS
COMPLETE 300 QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED
A+|| BRAND NEW!
The main concept demonstrated in the production possibilities frontier is - ANSWER:
Opportunity cost
When country A has a lower opportunity cost of producing sugar relative to country
B, then country A is said to have - ANSWER: Comparative Advantage
A graph that shows the combinations of two goods that the economy can produce
given the available scarce resources and available technology is called a - ANSWER:
Production Possibilities Frontier
Assume a production possibilities frontier for pickup trucks and big Mac hamburgers.
The economy is producing 20 big Mac hamburgers and 65 pickup trucks (point 20,
65). What is the opportunity cost of producing an additional 20 Big Mac hamburgers
(point 40, 60)? - ANSWER: Five Pickup Trucks
The opportunity cost of an item is - ANSWER: whatever must be given up to obtain
the item.
Consider market for pork, suppose that price of beef, a substitute for pork, increases.
Because of the change in price of beef, the equilibrium price of pork...? - ANSWER:
Increases
Consider the market for pork, suppose that the price of beef, a substitute for pork,
increases. Because of this change in the price of beef, the equilibrium quantity of
pork will...? - ANSWER: Increase because increase in price of beef causes demand
curve for pork to shift North East. B/c of this shift, the equilibrium quantity of pork
will increase.
Consider the market for pork. Suppose that the price of hog feed, an input to the
production of pork, increases. Because of that change in the price of hog feed, the
equilibrium quantity of pork ...? - ANSWER: Decreases because the increase in price
of hog feed causes the supply curve for pork to shift NW. B/c of this shift, the
quantity of pork decreases.
Consider the market for pork. Suppose that disposable income increases and pork is
an inferior good. Because of that change in income, the equilibrium price of pork...? -
ANSWER: Decreases because the increase in disposable income causes the demand
curve for pork to shift south west, because pork is an inferior good. because of this
shift, the equilibrium price of pork decreases.
,Consider the market for pork. Suppose that 1) disposable income increases and pork
is a normal good, And 2) the price of hog feed decreases. Because of these changes,
the equilibrium price of pork is... - ANSWER: Indeterminate because the increase in
disposable income causes the demand curve for pork to shift north east because
pork is a normal good. The decrease in price of hog feed causes the supply curve to
shift to the south east. The net effect of these shifts leaves us unable to say waht will
happen to the equilibrium price of pork.
Consider the market for pork. Suppose that disposable income increases and pork is
a normal good and the price of hog feed decreases. The equilibrium quantity of
pork...? - ANSWER: Increases.
Suppose the price elasticity for demand for retail phone service in the US is 0.95. If
the # of retail substitutes for retail telephone service increases, will the price
elasticity of demand become more elastic or more inelastic? - ANSWER: Elastic.
When the number of substitute products increases, the price elasticity of demand
will become more elastic. consumers become more sensitive to price when they
have more options to chose among.
True or False: the law of demand states that if the price of a good increases, CP, then
the quantity demanded of that good will increase. - ANSWER: False. quantity
demanded of that good will decrease.
Suppose the cross-price elasticity of demand for home heating oil with respect to the
price of natural gas is +0.6. This number tells us that home heating oil and natural
gas are substitute or compliment goods? - ANSWER: Substitute goods. When the
cross price elasticity is positive then they are substitutes.
Consider the market for mustard which is a complement to hot dogs. Suppose the
price of hot dogs increase. What happens to the equilibrium price and equilibrium
quantity of the mustard market? - ANSWER: Equilibrium price decreases and
equilibrium quantity decreases. The price of hot dogs is an independent variable in
the demand function for mustard. This is because hot dogs and mustard are
complementary goods. Therefore, if the price of hot dogs increases, then the
demand curve for mustard shifts to the south-west. People demand less mustard at
every price when hot dogs are more expensive. In the mustard market, the
equilibrium price decreases and equilibrium quantity decreases.
profit maximizing rule - ANSWER: a business maximizes profits when it produces
where the marginal revenue from selling another unit equals the marginal cost of
producing another unit.
Marginal Revenue=Marginal Cost
, Marginal cost - ANSWER: is equal to the change in the total cost that arises from an
extra unit of production. It is calculated by taking the change in total cost and
dividing it by the change in the quantity produced
=change in TC/change in Q
Marginal revenue - ANSWER: is the change in total revenue generated from an
additional unit sold. It is calculated by taking the change in total revenue divided by
the change in quantity sold
Short Run - ANSWER: a time horizon where some fixed costs exist.
is a time horizon within which a business is unable to adjust at least one input
because there is a fixed cost of some kind.
we think in terms of the short run not the long run
Long Run - ANSWER: a situation where the fixed costs (the inputs) become variable.
a time horizon long enough for the seller to adjust all inputs. If you observe a
business with no fixed costs, then it is in a long run state.
\when prices remain low for a very long period of time, then the business moves into
a long run decision mode. In the long run there are no fixed costs.
fixed costs - ANSWER: costs that do not vary with changes in the quantity produced.
what expenses must be paid even if production equals zero?
variable costs - ANSWER: costs that do vary with changes in the quantity produced
total cost - ANSWER: equals the sum of the fixed costs and variable costs
TC=VC+FC
average fixed cost - ANSWER: equals fixed cost divided by quantity produced
AFC= TC/Q
average variable cost - ANSWER: equals variable cost divided by the quantity
produced
average total cost - ANSWER: equals the total cost divided by the quantity produced,
or it is the sum of average fixed cost plus average variable cost
sunk cost - ANSWER: a cost that has already been committed and cannot be
recovered
joint costs - ANSWER: costs that do not change with changes in the scope of
production. economies of scope arise when there are joint costs. (ie: comcast
purchasing NBC universal).
perfect competition - ANSWER: occurs in an industry in which
- there are many buyers and many sellers
- an industry in which the good is homogeneous
