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Managerial Economics Exam Review Questions

1. If you raise the price of your good but sell more units is this a violation of the law of demand?
2. How could input suppliers ever lower your profits?
3. An investment has a useful life of 10 years. It costs $150,000. If the interest rate is 4% what stream of annual payments makes it worthwhile. (Each year has equal payment amounts.)
4. Why might third world workers making 50 cents per hour not necessarily be cost effective in comparison to US workers making $10 per hour?
5.
Total Product Total Cost
0 100
1 150
2 184
3 208
4 227
5 250
6 280
7 318
8 366
9 425
10 500
11 595
12 712
What is ATC, AVC, AFC, MC?

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1. Not necessarily. Another factor, such as the amount of competition in the industry, could have changed. Also, some luxury goods become more attractive to consumers as their price increases, because of the status they confer ...

Solution Summary

This solution gives answers and explanations for 5 common managerial economics exam questions. The topics covered are:
1. Law of demand
2. Inputs
3. Present value
4. Worker productivity
5. Cost calculations

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