ECON 140 MIDTERM Past Exam

ECON 140 MIDTERM Past Exam QUESTIONS AND ANSWERS 100% score (reupdated 2025) Which of the following statements is true?

• A marketing manager must allocate an advertising budget

to promote the product least effectively.

• Managers are not constrained by resource scarcity.
• Human resource managers design compensation systems

to encourage employees to work hard.Your answer is correct.

• A production manager's objective is normally to achieve a

production target at the highest possible cost. - Correct Answers ✅C. Human resource managers design compensation systems to encourage employees to work hard.Most private sector firms want to maximize

• cost.
• profit.
• revenue.
• All of the above. - Correct Answers ✅B. profit.

When interacting with a small number of rival firms, a manager uses a

• macroeconomic model.
• plan to maximize cost.
• strategy. 1 / 3

ECON 140 MIDTERM Past Exam QUESTIONS AND ANSWERS 100% score (reupdated 2025)

• All of the above. - Correct Answers ✅C. strategy.

The primary participants in a market are

• firms who supply the product and consumers who buy it,

but government policies such as taxes also play an important role in the operation of markets.

• customers who buy products and CEOs who make all of the

decisions for a firm, with government having no influence on the market.

• firms and their rivals, with government playing a minimal

role.

• None of the above. - Correct Answers ✅A. firms who

supply the product and consumers who buy it, but government policies such as taxes also play an important role in the operation of markets.

True or False: Assume a bottled water company is trying to

decide on a new pricing strategy. Sound decision making would require the firm's managers to consider not only how consumers will respond to the product's own price, but how they will react to the price for the firm's product relative to the prices of similar products offered by the firm's competitors. - Correct Answers ✅True Society faces trade-offs because of

• government regulations. 2 / 3

ECON 140 MIDTERM Past Exam QUESTIONS AND ANSWERS 100% score (reupdated 2025)

• scarcity.
• the profit motive.
• price setting by firms. - Correct Answers ✅B. scarcity.

Managerial economics

• helps managers make decisions in the face of scarcity.
• ensures managers always make good decisions.
• explains which products consumers will buy.
• describes how pay for managers is set. - Correct

Answers ✅A. helps managers make decisions in the face of scarcity.CEOs should focus on

• beating their competitors.
• minimizing costs.
• maximizing firm profits.
• getting the best pay package for the senior management

team. - Correct Answers ✅C. maximizing firm profits.Profit is

• used to beat a company's rivals.
• maximized when revenue is maximized.
• the difference between a firm's revenues and its costs.
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