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Business Decision Analysis Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Henry is trying to decide between two different suppliers. In decision analysis, the two suppliers (or options) he's considering are called:

Question 2 2. Ira is doing a decision analysis to decide whether to restructure his company or not. To deal with the uncertainties in his analysis, he should:

Question 3 3. In decision analysis, money is called:

Question 4 4. A period of reduced economic activity is called a(n) _____.

Question 5 5. The purpose of _____ is to communicate the customers that they are receiving a great value for their money.

Page 2

Question 6 6. Inflation is defined as _____.

Question 7 7. A good is considered relatively elastic when the elasticity of demand is

Question 8 8. A good is considered relatively inelastic if the elasticity of demand is _____

Question 9 9. Elasticity of demand measures the responsiveness of _____.

Question 10 10. If you were designing a smartphone with a target price of $500, which would be UNLIKELY to make an appearance in the finished product?

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Question 11 11. What happens to rejected ideas from target costing?

Question 12 12. How many steps are there in doing target costing?

Question 13 13. What is the break-even point for fixed costs of $400, variable costs of $80, and a sales price of $160?

Question 14 14. Which is NOT a way business owners can use break-even analysis?

Question 15 15. Which of these are fixed costs?

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Question 16 16. If Jim could either study economics for an hour or play video games for an hour, what is the opportunity cost of studying economics?

Question 17 17. What is true regarding an implicit cost?

Question 18 18.

Consider Keegan who works for $15 an hour. Instead of working one day, he went to watch a movie that costs $35 and lasts two hours.

Decide which of the following statements is true?

Question 19 19. Why is it sometimes beneficial to abandon a project with sunk costs?

Question 20 20. If you spend $1000 to fix the brakes on your 15-year-old car, and then find out that you also need new tires, which will cost another $1000, what would be the most sensible decision to make?

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Question 21 21. When should sunk costs be considered in decision-making?

Question 22 22. What is price elasticity?

Question 23 23. What is a monopoly?

Question 24 24. What is profit maximization?

Question 25 25. What does a product life cycle consist of?

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Question 26 26. How does the growth stage differ in comparison to the introduction stage?

Question 27 27. What should the promotion strategy in the decline stage involve?

Question 28 28. What is a control variable in marginal analysis?

Question 29 29. Using the concepts of marginal analysis, what decision would you make when marginal benefit is less than the marginal cost?

Question 30 30.

Considering the following information, what would be the best decision using marginal analysis?

Producing an additional unit of smartphones has a marginal cost of $1,000 and a marginal benefit of $1,500? The change in net benefits is $500.

Business Decision Analysis Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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