Managerial Economics Online Test Part 3

11. Which of the following are the drawbacks of "Marginal cost pricing policy"?

i] Frequent changes in price
ii] Practical difficulties arise in computation of marginal cost
iii] Profit/ unit
iv] It causes problems in credit sales

a. Only i
b. i, ii and iii
c. i, ii and iv
d. All the above

Answer: c. i, ii and iv

12. Total revenue - Explicit costs = _________, as per economists.

a. Profit
b. Investment
c. Implicit cost
d. None of the above

Answer: a. Profit

13. Variable costs vary with ______

a. Size
b. Scale
c. Input
d. Output

Answer: d. Output

14. Study of income elasticity of demand is useful in

i] Economic planning
ii] Marginal planning
iii] Demand forecasting
iv] Contribution analysis

a. Only i and ii
b. Only i and iii
c. All i, ii and iii
d. Only iv

Answer: b. Only i and iii

15. Managerial economics involves forward planning by management. Who said this?

a. Prof. Hague
b. Alfred Marshall
c. Spencer Sieglemen
d. Prof. Jon Darwin

Answer: c. Spencer Sieglemen