Practice Test: Managerial Economic

1. Identify four main points that would be included in a contract of employment. If possible, use an example contract to support your answer (feel free to obscure any confidential information).

The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .

The budget analysis shows that the labor hours of the firm are higher than the budgeted amount. As such, the firm needs to evaluate the cost benefit analysis of making or buying their products. To make this decision, various factors need to be considered. Before making the decision, Peyton needs to evaluate the marginal costs and revenue of making versus buying the products. The firm should take the option which provides the highest marginal profit which is the

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

1. Explain why change happens in a business environment. You should include at least three reasons in your answer.

A yo-yo manufacturer is producing 5,000 yo-yos selling them for $1.50 each. At this level of output, marginal revenue is $1.50. From this information, we can conclude that the yo-yo manufacturer

II.|Connie has an investment portfolio in excess of $450,000. She pays Chris $350 to do an analysis of her investments and make recommendations on restructuring the portfolio.|

In this paper I am going to explain some of the key terms that companies need to keep in mind when operating their business. First, we will start with marginal revenue, which is defined simply as the extra revenue that is made for each additional unit of a product that is sold. This is directly related to marginal cost, which is what it costs the company to make that additional unit of product.

a. Given the change in the value of the dollar between 2008 and 2009, as indicated in the table above, describe the effects this will have on United States tourism in each of these countries.

Explain how a profit maximizing firm determines its optimal level of output, using marginal revenue and marginal cost as criteria:

A local surf store estimates that their average customer 's demand per year is  P = 3.5 - 0.5Q, and knows that the marginal cost of each rental is $0.5.

Directions: Identify the letter of the choice that best completes the statement or answers the question. Then mark your response on the answer sheet. Unless otherwise stated, demand curves are negatively sloped and supply curves are positively sloped. The midpoint and point formulae for elasticity are, respectively:

Does the Department of Education (BOE) and Board of Nursing (BON) have representatives in congress to help change laws?

In question four, Janet was asked to solve a question that deals with annuity payments, specifically, ordinary annuities. It starts by asking of how much you will make if you add $2,000 every year and it is compounded by 10% interest every year. These, for the most part, are future value problems. The first one comes out to be a future value of $12,210.20, which does not satisfy the need for $20,000. The next part asks what the value would be if the interest was compounded semiannually. You have to do an equation in order to find out what the effective annual interest rate. Through this equation you come out with a value of 10.25% and after the calculator calculations you come out with a future value of $12,271.11, also not meeting the demand for that first year of college. The next part asks what payment will you need in order to get to that $20,000 number and the present value comes to be $3,275.95. Next, the case asks what original payment you would need in order

a) Draw Brennan's average total, marginal revenue and marginal cost curves. (Hints: calculate total revenue (P* times Q) first, and then calculate MR)