Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it’s production costs

Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it’s production costs 
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Saving in it’s production costs
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Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it's production costs

Description : Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it's production costs

Last Answer : (4) Saving in it's production costs Explanation: Economics of a firm includes how it combines labour and capital so as to lower the average cost of output, either from increasing, decreasing, or constant returns ... of a good or a service on a larger scale, yet with (on average) less input costs.

If an industry is characterized by economies of scale then - (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) capital requirement are small due to the efficiency of the large scale operation (4) the costs of entry into the market are likely to be substantial

Description : If an industry is characterized by economies of scale then - (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) ... of the large scale operation (4) the costs of entry into the market are likely to be substantial

Last Answer : (2) long run unit costs of production decreases as the quantity the firm produces increases Explanation: In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion ... in unit cost as the size of a facility and the usage levels of other inputs increase.

If an industry is characterised by economies of scale then (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) capital requirement are small due to the efficiency of the large scale operation (4) the costs of entry into the market are likely to be substantial

Description : If an industry is characterised by economies of scale then (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) ... of the large scale operation (4) the costs of entry into the market are likely to be substantial 

Last Answer : long run unit costs of production decreases as the quantity the firm produces increases

The internal rate of return - (1) must be less than the interest rate if the firm is to in-vest. (2) makes the present value of profits equal to the present value of costs. (3) falls as the annual yield of an investment rises. (4) is equal to the market interest rate for all the firm's in-vestment.

Description : The internal rate of return - (1) must be less than the interest rate if the firm is to in-vest. (2) makes the present value of profits equal to the present value of costs. (3) falls as the annual yield of an investment rises. (4) is equal to the market interest rate for all the firm's in-vestment.

Last Answer : (3) falls as the annual yield of an investment rises. Explanation: The internal rate of return on an investment or project is the "annualized effective compounded re-turn rate" or discount rate ... the investment equals the net present value of the benefits (positive cash flows) of the investment.

The internal rate of return (1) must be less than the interest rate if the firm is to invest. (2) makes the present value of profits equal to the present value of costs. (3) falls as the annual yield of an investment rises. (4) is equal to the market interest rate for all the firm’s investment.

Description : The internal rate of return (1) must be less than the interest rate if the firm is to invest. (2) makes the present value of profits equal to the present value of costs. (3) falls as the annual yield of an investment rises. (4) is equal to the market interest rate for all the firm’s investment. 

Last Answer : falls as the annual yield of an investment rises.

The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Description : The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Last Answer : (a) The economies of large scale production

Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Description : Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Last Answer : (1) unit cost of production Explanation: In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion. "Economies of scale" is a long run concept and refers ... in unit cost as the size of a facility and the usage levels of other inputs increase.

Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Description : Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Last Answer : unit cost of production 

When marginal cost is equal to marginal revenue, the firm should A)produce more to increase profits. B)produce less to decrease total costs. C)stop producing additional units to maximise profits. D)provide discounts to encourage purchases.

Description : When marginal cost is equal to marginal revenue, the firm should A)produce more to increase profits. B)produce less to decrease total costs. C)stop producing additional units to maximise profits. D)provide discounts to encourage purchases.

Last Answer : C)stop producing additional units to maximise profits.

If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : (3) continue to operate as long as it covers even the variable costs. Explanation: The demand for labour is "derived- from the production and demand for the product being demanded. If the demand ... price and production numbers are met. Labour is "derived" from the market demand for the product.

If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : continue to operate as long as it covers even the variable costs.

A firm should cease production in the short(a) Price is less than average fixed cost (b) Price is less than average cost (c) Profits are negative (d) Price is less than average variable cost run if

Description : A firm should cease production in the short run if(a) Price is less than average fixed cost (b) Price is less than average cost (c) Profits are negative (d) Price is less than average variable cost

Last Answer : (d) Price is less than average variable cost

Production Function relates to: (1) costs to outputs (2) costs to inputs (3) inputs to outputs (4) wage level to profits

Description : Production Function relates to: (1) costs to outputs (2) costs to inputs (3) inputs to outputs (4) wage level to profits

Last Answer : (3) inputs to outputs Explanation: In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all ... in the use of factor inputs in production and the resulting distribution of income to those factors.

Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Description : Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Last Answer : b. in operating expenses for the seller.

The real value of marketing research to the organization can best be understood by 1. its immediate impact on profits 2. the amount of time spent 3. how much it costs 4. improvements in the ability to make decisions 5. the increase in sales volume or market share

Description : The real value of marketing research to the organization can best be understood by 1. its immediate impact on profits 2. the amount of time spent 3. how much it costs 4. improvements in the ability to make decisions 5. the increase in sales volume or market share

Last Answer : improvements in the ability to make decisions

The real value of marketing research to the organisation can best be understood by. A)its immediate impact on profits B)the amount of time spent C)how much it costs D)improvements in the ability to make decisions E)the increase in sales volume or market share

Description : The real value of marketing research to the organisation can best be understood by. A)its immediate impact on profits B)the amount of time spent C)how much it costs D)improvements in the ability to make decisions E)the increase in sales volume or market share

Last Answer : D)improvements in the ability to make decisions

The wheel of retailing hypothesis suggests that: A)retailers tend to provide more limited services to customers as the business ages. B)new retailers enter the market with low prices, low profit margins and low status but eventually trade up. C)as retail firms' profits increase, the service they provide to customers increases but the cost of doing business decreases. D)a retail firm must grow to compete with other retail firms on an equal basis.

Description : The wheel of retailing hypothesis suggests that: A)retailers tend to provide more limited services to customers as the business ages. B)new retailers enter the market with low prices, low profit margins ... decreases. D)a retail firm must grow to compete with other retail firms on an equal basis.

Last Answer : B)new retailers enter the market with low prices, low profit margins and low status but eventually trade up.

Internal economies - (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Description : Internal economies - (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Last Answer : (1) arise when there is expansion in an industry. Explanation: Internal economies are those economies in production-those reductions in production costs-which accrue to the firm itself when it expands its ... of its own expansion independent of the size and expansion of the industry as a whole.

Internal economies (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Description : Internal economies (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Last Answer : arise when there is expansion in an industry.

In short run, if a competitive firm incurs losses, it will - (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Description : In short run, if a competitive firm incurs losses, it will - (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Last Answer : (1) stop production. Explanation: In the short run, a firm that is operating at a loss (where the revenue is less that the total cost or the price is less than the unit cost) must ... will shutdown if the sale of the goods or services produced cannot even cover the variable costs of production.

In short run, if a competitive firm incurs losses, it will (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Description : In short run, if a competitive firm incurs losses, it will (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Last Answer : stop production.

Value added is: a) the cost saving through production and marketing efforts within the firm. b) the value that a firm adds through the development of dynamic capabilities. c) the value that a firm adds to bought-in materials and services through outsourcing. d) the difference between the cost of inputs and the market value of outputs

Description : Value added is: a) the cost saving through production and marketing efforts within the firm. b) the value that a firm adds through the development of dynamic capabilities. c) the value that a ... through outsourcing. d) the difference between the cost of inputs and the market value of outputs

Last Answer : the difference between the cost of inputs and the market value of outputs

he non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are - (1) Explicit costs (2) Original costs (3) Implicit costs (4) Replacement costs

Description : he non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are - (1) Explicit costs (2) Original costs (3) Implicit costs (4) Replacement costs

Last Answer : (3) Implicit costs Explanation: In economics, an implicit is the opportunity cost equal to what a firm must give up in order to use factors which it neither purchases nor hires. It is ... instead of renting, selling or lending it. These are costs a business incurs without actually spending money.

The non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are (1) Explicit costs (2) Original costs (3) Implicit costs (4) Replacement costs

Description : The non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are (1) Explicit costs (2) Original costs (3) Implicit costs (4) Replacement costs

Last Answer :  Implicit costs

Which of the following best defines price discrimination? a. charging different prices on the basis of race b. charging different prices for goods with different costs of production c. charging different prices based on cost-of-service differences d. selling a certain product of given quality and cost per unit at different prices to different buyers

Description : Which of the following best defines price discrimination? a. charging different prices on the basis of race b. charging different prices for goods with different costs of production c. charging ... a certain product of given quality and cost per unit at different prices to different buyers

Last Answer : d. selling a certain product of given quality and cost per unit at different prices to different buyers

Sale of products from test run before production run is a) Deducted from actual cost b) Added to actual cost of assets c) Charged as pre-profits d) Charged as preliminary expenses

Description : Sale of products from test run before production run is a) Deducted from actual cost b) Added to actual cost of assets c) Charged as pre-profits d) Charged as preliminary expenses

Last Answer : a) Deducted from actual cost

Firm that operate internationally are able to A. earn a greater return from their skills and core competencies B. realize location economies where they can be performed most efficiently C. realize greater experience curve economies, which reduces the cost of production D. All the above

Description : Firm that operate internationally are able to A. earn a greater return from their skills and core competencies B. realize location economies where they can be performed most efficiently C. realize greater experience curve economies, which reduces the cost of production D. All the above

Last Answer : All the above

Jose Suarez has been promoted to sales manager at a new firm and is trying to come up with a sales -force compensation method. He would like to have selling expenses relate directly to sales resources, a highly aggressive sales force, and minimization of nonselling tasks. What compensation method(s) would best fulfill his requirements? A)Combination B)Straight salary C)Straight salary plus generous fringe benefits D)Straight commission E)Salary plus a bonus

Description : Jose Suarez has been promoted to sales manager at a new firm and is trying to come up with a sales -force compensation method. He would like to have selling expenses relate directly to ... B)Straight salary C)Straight salary plus generous fringe benefits D)Straight commission E)Salary plus a bonus

Last Answer : D)Straight commission

The basic object of all production is to (1) satisfy human wants (2) provide employment (3) make profits (4) increase physical output

Description : The basic object of all production is to (1) satisfy human wants (2) provide employment (3) make profits (4) increase physical output

Last Answer : (1) satisfy human wants Explanation: According to Adam Smith, consumption is the sole end and purpose of all production. The goal of production is the satisfaction of human desire. All the processes, by which human labor creates goods and services, bring them to the ultimate consumer.

The basic object of all production is to (1) satisfy human wants (2) provide employment (3) make profits (4) increase physical output

Description : The basic object of all production is to (1) satisfy human wants (2) provide employment (3) make profits (4) increase physical output

Last Answer : satisfy human wants

In the long-run equilibrium, a competitive firm earns - (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Description : In the long-run equilibrium, a competitive firm earns - (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Last Answer : (3) Normal profit Explanation: Making the assumption that the market demand curve remains unchanged, higher market supply will reduce the equilibrium market price until the price = long run average cost. ... of firms in and out of the industry and a long-run equilibrium has been established.

In the long-run equilibrium, a competitive firm earns (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Description : In the long-run equilibrium, a competitive firm earns (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Last Answer :  Normal profit

What will happen if a firm in perfect competitive market, increase its output by 50% (a)Total sales revenue will also increase by 50% ; (b) (b)Selling price will come down by 50%; (c)Total sales revenue will decrease by 50% ; (d)Profit will increase by 25%

Description : What will happen if a firm in perfect competitive market, increase its output by 50% (a)Total sales revenue will also increase by 50% ; (b) (b)Selling price will come down by 50%; (c)Total sales revenue will decrease by 50% ; (d)Profit will increase by 25%

Last Answer : (a)Total sales revenue will also increase by 50% ;

Which of the following is necessary for a natural monopoly? a. economies of scale b. a high proportion of the total cost is the cost of capital goods c. the market is very small d. all of the above

Description : Which of the following is necessary for a natural monopoly? a. economies of scale b. a high proportion of the total cost is the cost of capital goods c. the market is very small d. all of the above

Last Answer : d. all of the above

In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Description : In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Last Answer : (a) Profits and new firms join the market ;

.Free trade is based on the principle of (a) Comparative advantage (b) Comparative scale © Economies of advantage (d) Production possibility advantage

Description : .Free trade is based on the principle of (a) Comparative advantage (b) Comparative scale © Economies of advantage (d) Production possibility advantage

Last Answer : (a) Comparative advantage

In market-penetration pricing, the company’s objective is to ________, believing that higher sales volume will lead to lower unit costs and higher long-run profits. A. Block competitive launches B. Maximize their market share C. Minimize their market share D. Maximize volume E. None of the above

Description : In market-penetration pricing, the company's objective is to ________, believing that higher sales volume will lead to lower unit costs and higher long-run profits. A. Block competitive launches B. ... their market share C. Minimize their market share D. Maximize volume E. None of the above

Last Answer : B. Maximize their market share

The expenses on advertising is called - (1) Implicit cost (2) Surplus cost (3) Fixed cost (4) Selling cost

Description : The expenses on advertising is called - (1) Implicit cost (2) Surplus cost (3) Fixed cost (4) Selling cost

Last Answer : (4) Selling cost Explanation: Selling cost is total cost of marketing, advertising, and selling a product. It differs from the production cost which is incurred to produce goods. Selling cost influences the commercial desire to purchase a commodity,

The expenses on advertising is called (1) Implicit cost (2) Surplus cost (3) Fixed cost (4) Selling cost

Description : The expenses on advertising is called (1) Implicit cost (2) Surplus cost (3) Fixed cost (4) Selling cost

Last Answer : Selling cost

Product elimination can best be described as the process of deleting a product from the product mix when it A)is perceived as a failure by top management. B)increases production costs and decreases profits. C)no longer responds to promotional efforts. D)no longer satisfies a sufficient number of customers.

Description : Product elimination can best be described as the process of deleting a product from the product mix when it A)is perceived as a failure by top management. B)increases production costs and ... C)no longer responds to promotional efforts. D)no longer satisfies a sufficient number of customers.

Last Answer : D)no longer satisfies a sufficient number of customers.

Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : (4) increase in capital return Explanation: Interest rate increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate ... . All of these factors raise output and employment as well as investment and consumer spending.

Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : increase in capital return

Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy? A. The firm uses long-term financing to finance all fixed and current assets. B. The firm will see an increase in its expected profits. C. The firm will see an increase in its risk profile. D. The firm will increase its dividends per share (DPS) this period.

Description : Which of the following statements is correct for a conservative financing policy for a firm  relative to a former aggressive policy? A. The firm uses long-term financing to finance all fixed and current ... its risk profile. D. The firm will increase its dividends per share (DPS) this period.

Last Answer : B. The firm will see an increase in its expected profits.

Some organizations have escalator clause in their labour agreements. What does this clause provide for ? (A) Automatic increase in wage/salary depending on seniority (B) Wage increase depending on output per day by the worker (C) Automatic increase in wage/salary depending upon increase in price index (D) Automatic increase in wage/salary depending on increase in profits of the firm

Description : Some organizations have escalator clause in their labour agreements. What does this clause provide for ? (A) Automatic increase in wage/salary depending on seniority (B) Wage increase depending on output ... index (D) Automatic increase in wage/salary depending on increase in profits of the firm

Last Answer : Answer: Automatic increase in wage/salary depending on increase in profits of the firm

A valid definition of a business purpose is to ______. A. create a customer. B. maximize profits. C. serve the society. D. increase the wealth of the firm.

Description : A valid definition of a business purpose is to ______. A. create a customer. B. maximize profits. C. serve the society. D. increase the wealth of the firm.

Last Answer : B. maximize profits.

A valid definition of a business purpose is to _______. A. create a customer. B. maximize profits. C. serve the society. D. increase the wealth in the firm.

Description : A valid definition of a business purpose is to _______. A. create a customer. B. maximize profits. C. serve the society. D. increase the wealth in the firm.

Last Answer : A. create a customer.

Which of the following relationship is not correct is case of a chemical process plant? (A) Manufacturing cost = direct product cost + fixed charges + plant overhead costs (B) General expenses = administrative expenses + distribution & marketing expenses (C) Total product cost = manufacturing cost + general expenses (D) Total product cost = direct production cost + plant overhead cost

Description : Which of the following relationship is not correct is case of a chemical process plant? (A) Manufacturing cost = direct product cost + fixed charges + plant overhead costs (B) General ... manufacturing cost + general expenses (D) Total product cost = direct production cost + plant overhead cost

Last Answer : (D) Total product cost = direct production cost + plant overhead cost

The main reason for establishing sales territories to 1. secure optimum market coverage 2. reduce selling expenses 3. facilitate planning and control of selling operations 4. improve sales force performance and morale 5. none of these

Description : The main reason for establishing sales territories to 1. secure optimum market coverage 2. reduce selling expenses 3. facilitate planning and control of selling operations 4. improve sales force performance and morale 5. none of these

Last Answer : secure optimum market coverage

Have you ever done something that directly helped your employer either increase profits or decrease costs?

Description : Have you ever done something that directly helped your employer either increase profits or decrease costs?

Last Answer : I recently found a way to help my employer save money on office supplies. For years, they bought office supplies from the same place. It was several blocks away, so it was pretty convenient. I have found that shopping ... of saying he'll just do the job, he needs to show why he'd be great at it.

Select the FALSE statement about an inventory system. A)The objective of minimum total inventory cost must be balanced against a customer service level necessary to maximise profits. B)EOQ is the size of inventory that minimises only the cost of carrying inventory. C)There is a tradeoff between inventory carrying costs and the probability of stockouts. D)Inventory carrying costs usually increase as the level of customer service increases.

Description : Select the FALSE statement about an inventory system. A)The objective of minimum total inventory cost must be balanced against a customer service level necessary to maximise profits. B)EOQ is ... of stockouts. D)Inventory carrying costs usually increase as the level of customer service increases.

Last Answer : B)EOQ is the size of inventory that minimises only the cost of carrying inventory.