Marginal Cost and Net Benefits

8087 Words Sep 20th, 2012 33 Pages
Coursehero >> Other International >> Prince Sultan University >> MBA ECON
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___________________________________________________________________________ 1. A Ch3 Student: firm will maximize profit by producing that level of output at which A. the additional revenue from the last unit sold exceeds the additional cost of the last unit by the largest amount. B. the additional revenue from the last unit sold equals the additional cost of the last unit. C. total revenue exceeds total cost by the largest amount. D. total revenue equals total cost. E. both b
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13. If the decision maker is choosing 300 units of activity A, A. this level maximizes net benefits. B. if the activity is increased by one unit, net benefits will increase by $20. C. if the activity is decreased by one unit, net benefits will decrease by $20. D. both b and c E. all of the above The next 3 questions refer to the following: A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000 while a market researcher receives $20,000. The marginal contribution of engineers and market researchers are: 14. How should a manager with an annual budget of $140,000, allocate this budget in order to maximize the number of new products developed? A. B. C. D. Hire one engineer and five market researchers Hire two engineers and three market researchers Hire three engineers and one market researcher Hire four engineers and four market researchers 15. If the manager has an annual budget of $140,000 and currently is hiring two engineers and three market researchers, then A. the last dollar spent on an engineer yielded more new products than the last dollar spent on a market researcher. B. the last dollar spent on a market researcher yielded more new products than the last dollar spent on an engineer. C. he is making the correct decision because engineers make more than market researchers. D. he is making the correct decision because the last market researcher hired was more
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