ECO 550 (Managerial Economics) Strayer University Complete Quiz Bank
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Chapter 1 Quiz: Introduction and Goals of the Firm
1.The form of economics most relevant to managerial decision-making within the firm is:
2.If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable if:
3.In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____discounted at the stockholders' required rate of return.
4.Which of the following statements concerning the shareholder wealth maximization model is (are) true?
5.According to the profit-maximization goal, the firm should attempt to maximize short-run profits since there is too much uncertainty associated with long-run profits.
6.According to the innovation theory of profit, above-normal profits are necessary to compensate the owners of the firm for the risk they assume when making their investments.
7.According to the managerial efficiency theory of profit, above-normal profits can arise because of high-quality managerial skills.
8.Which of the following (if any) is not a factor affecting the profit performance of firms:
9.Agency problems and costs are incurred whenever the owners of a firm delegate decision-making authority to management.
10.Economic profit is defined as the difference between revenue and ____.
11.Income tax payments are an example of ____.
12.Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
13.the common factors that give...