30 Questions
What is the main focus of Part III of the book?
Issues of management in imperfect markets
What is the only chapter in Part III that depends on understanding Part II?
Chapter 15
What would a course focusing on the managerial economics of strategy comprise of?
Chapters 1–11
What can be found on the book's website?
Additional cases and applications, as well as updates and corrections to the book
Who is the author of the book?
Ivan Png
Who did the author gratefully acknowledge for their advice and suggestions?
Nicholas Snowden, Richard Leigh, and Joy Cheng
What is one way managerial economics can aid in decision-making?
By correcting systematic biases in individual decision-making
What type of models describe behavior at a single point in time?
Static models
What is a key aspect of dynamic models?
They focus on behavior at multiple points in time
Why must future dollars be discounted to their present value?
Because a dollar now is different from a dollar in the future
What is a characteristic of investments, according to the text?
They involve using resources at specific times to receive benefits at other times
What is the primary focus of dynamic models in extensive form?
The sequence of actions and payments
What is the fundamental assumption of managerial economics models?
People always choose the alternative that maximizes the difference between benefit and cost
What is the term used to describe the limitation of human cognitive abilities and self-control in decision-making?
Bounded rationality
What is the sunk-cost fallacy an example of?
A systematic error in decision-making
What was the result of the experiment by Hal Arkes and Catherine Blumer?
Consumers who had incurred a larger sunk cost tended to consume more
What is the status quo bias an example of?
A systematic error in decision-making
What was the purpose of the experiment by Jack Knetsch and Jack Sinden?
To compare the value of cash and lottery tickets
What happens to Joy's demand curve when the price of popcorn increases?
It shifts to the left
What is the effect of an increase in advertising on the demand curve?
It shifts to the right
What is the primary goal of persuasive advertising?
To influence consumer choice
What type of goods are movies and mobile telephone services?
Consumer goods
What is the majority of economic transactions in an economy?
Business-to-business sales
What is the purpose of informative advertising?
To communicate information to potential buyers and sellers
What happens to the market as a whole when the price of a good decreases?
It will buy a larger quantity
Which of the following factors affects the market demand for a consumer good?
The prices of related products
What is the graphical representation of the market buyer surplus?
The area between the market demand curve and the price line
What happens to the demand for a product when the price of a substitute increases?
It increases
What is the difference between the buyers' total benefit from consumption and the buyers' actual expenditure?
Buyers' surplus
How can a seller extract the buyers' surplus and raise profit?
By selling through package deals and two-part pricing
This quiz outlines the structure of a managerial economics course, covering topics such as market power, imperfect markets, and regulation. It provides options for shorter courses focused on strategy or management.
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