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| Section | Objectives |
|---|---|
| Topic 1: Global Economics | - International trade and comparative advantage - Global economic institutions and trade policy - Exchange rates and currency systems |
| Topic 2: Managerial Economic Decision-Making | - Cost-benefit analysis in business contexts - Risk and uncertainty in global markets |
| Topic 3: Microeconomics for Managers | - Elasticity and pricing decisions - Supply and demand analysis - Market structures and competition |
| Topic 4: Foundations of Economics | - Market systems and economic models - Scarcity, opportunity cost, and economic reasoning |
| Topic 5: Macroeconomic Environment | - Fiscal and monetary policy - GDP, inflation, and unemployment |
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NEW QUESTION # 134
Which statement is true for a monopoly firm, but not for a competitive firm?
Answer: C
Explanation:
InGlobal Economics for Managers, a key distinction between monopolies and perfectly competitive firms is the relationship betweenprice and marginal revenue. For a monopoly,marginal revenue is less than price, making option C correct.
A monopoly faces adownward-sloping demand curve, meaning that to sell an additional unit, the firm must lower the price not only for the marginal unit but also for all previous units sold. As a result, marginal revenue declines faster than price and always lies below the demand curve.
In contrast, a perfectly competitive firm is aprice taker. It can sell as much output as it wants at the market price, so marginal revenue equals price.
Options A and B describe competitive firms, not monopolies. Option D is incorrect because monopolies can earn economic profits in the long run due to entry barriers.
Thus, option C correctly identifies a feature unique to monopoly firms.
NEW QUESTION # 135
When is it best for a firm to restart production?
Answer: D
Explanation:
A firm should restart production when total revenue is greater than total variable cost, meaning the firm can cover its variable costs and contribute something toward fixed costs. Option C is correct because, after a short- term shutdown, fixed costs may still exist whether the firm produces or not. The key restart decision is whether operating revenue can cover variable operating expenses. If total revenue exceeds total variable cost, production reduces losses or may generate profit. Option A is not sufficient because total revenue being less than total cost may still allow production to be better than shutdown if variable costs are covered. Option B means producing additional units lowers profit, so it supports decreasing production. Option D does not justify restarting. The short-run rule focuses on variable cost coverage.
NEW QUESTION # 136
In order to increase the money supply, what does the Federal Reserve do?
Answer: B
Explanation:
InGlobal Economics for Managers, the Federal Reserve increases the money supply primarily throughopen market operations, specifically bybuying government bonds from the public, making option C correct.
When the Fed purchases government securities, it pays banks and other sellers by crediting their reserves.
This action increases the amount of reserves in the banking system, enabling banks to extend more loans. As lending expands, the money supply grows through the money multiplier process.
Option A would decrease the money supply. Option B tightens monetary conditions. Option D reduces banks' ability to lend.
Managers should understand this mechanism because changes in the money supply affect interest rates, investment, exchange rates, and aggregate demand. Therefore, option C accurately describes how the Fed increases the money supply.
NEW QUESTION # 137
What are represented by informal institutions?
Answer: A
Explanation:
Informal institutions are unwritten social constraints that shape behavior, including norms, customs, values, traditions, and ethics. Option B is correct because ethics represents an informal guide to behavior rather than a formally codified legal requirement. Informal institutions reduce uncertainty by helping people understand what is socially acceptable, trustworthy, or legitimate in a particular society. They matter greatly in global business because managers may comply with formal laws but still fail if they ignore local customs or ethical expectations. Rules and regulations are usually formal when written and enforced by legal authorities. Written laws are clearly formal institutions. Informal institutions are enforced mainly through social approval, reputation, relationships, and cultural expectations rather than courts or government penalties.
NEW QUESTION # 138
What is a key feature of an oligopoly?
Answer: B
Explanation:
InGlobal Economics for Managers, oligopolies are often modeled as aprisoner's dilemma, making option B correct.
Firms face incentives to cooperate for mutual gain but also incentives to cheat to maximize individual profit.
This tension explains price rigidity, collusion instability, and strategic behavior.
Other options describe competitive markets or are not universally true.
Thus, option B is correct.
NEW QUESTION # 139
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