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QUESTION NO: 1
A company reduces the price of its product, hoping to increase its overall profits. When the quarterly numbers come in, the company sees that the decrease in price has led to a decrease in profits. It decides to change the price back to its original price, but profits still do not recover to their original levels. What happened?
A. Demand has become less elastic since the first price change.
B. Demand has become more elastic since the first price change.
C. The price elasticity of demand was 1 before the first price change.
D. The company experienced economies of scale at the lower price.
Answer: B
QUESTION NO: 2
Two years ago, the purchasing manager at a company spent $25,000 on a new machine that would improve production efficiency at the company. The manufacturers of the machine release an updated model that costs $35,000 and that promises to further improve production efficiency. Under what conditions should the purchasing manager upgrade to the new model?
A. If the savings from the additional efficiency improvements are large enough to offset the $35,000 cost of the new machine
B. If the savings from the additional efficiency improvements are large enough to offset the $10,000 difference in price between the machines
C. If the savings from the additional efficiency improvements are large enough to offset the $60,000 spent on machines
D. If the efficiency improvements from the old machine did not result in enough savings to offset the
$25,000 purchase price
Answer: A
QUESTION NO: 3
A company's 2013 year-end balance sheet included the following:
The company's net cash from operating activities on its 2013 statement of cash flows is $200,000.
Current year depreciation expense is $25,000. What amount should the company report as net income for 2013?
A. $130,000
B. $170,000
C. $175,000
D. $230,000
Answer: B
QUESTION NO: 4
A doctor wants to predict the probability that a woman develops breast cancer based on her age, race, and diet. Which of the following statistical tools is the MOST suitable for this study?
A. Perform a multiple linear regression analysis
B. Construct confidence intervals
C. Conduct a one-sample hypothesis test
D. Conduct a two-sample hypothesis test
Answer: A
QUESTION NO: 5
A manager learns that the government is planning to add an excise tax on the product the company sells. After researching, the manager expects that total expenditures for the good will rise.
Of the following goods, which does the company MOST likely sell?
A. Milk
B. Leather handbags
C. Ice cream
D. Raspberries
Answer: A
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Updated: May 26, 2022