Choose the correct....
The single most important element in managerial economics is the microeconomic theory of the firm.
a. True
b. False
A theoretical model attempts to identify every possible determinant of an event.
a. True
b. False
Managerial economics involves the application of economic theory and decision science.
a. True
b. False
Management decision problems are not encountered by government agencies or non-profit organizations.
a. True
b. False
Management decision problems typically involve objectives and constraints.
a. True
b. False
The economic theory of the firm assumes that businesses attempt to maximize their contribution to social welfare.
a. True
b. False
The ultimate test of the value of an economic theory is whether it is based on reasonable assumptions.
a. True
b. False
Mathematical economics involves the application of statistical tools to estimate economic models.
a. True
b. False
The functional areas of business administration are largely irrelevant to the study of managerial economics.
a. True
b. False
Most of the goods and services in the United States are produced by government and the rest are produced by firms and not-for-profit organizations.
a. True
b. False
Firms exist because they facilitate the efficient organization of factors of production.
a. True
b. False
The function of a firm is to purchase resources and then to transform them into goods and services and offer them for sale.
a. True
b. False
The value of a firm is equal to the sum of all future profits that will be generated by the firm.
a. True
b. False
If there was no inflation, the value of a dollar received now would be greater than the value of a dollar received a year from now.
a. True
b. False
The concept of the circular flow of economic activity illustrates the point that all economic activities are interdependent.
a. True
b. False
The theory of the firm holds that the primary goal of a firm is to maximize the discounted present value of the positive difference between the firm's total revenue and the firm's total cost or to minimize the present value of the negative difference between the firm's total revenue and total cost.
a. True
b. False
The value of a firm will increase if there is a reduction in the uncertainty associated with the firm's cash flows.
a. True
b. False
An increase in the uncertainty associated with a firm's cash flows will cause a decrease in the discount rate that is applied to the valuation of the firm.
a. True
b. False
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Answer:
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