Mid term 1:
Question 1
4 out of 4 points
| The moral hazard in team production arises from | ||||
| Selected Answer: a conflict between tactically best interest and one’s dutyCorrect Answer: a conflict between tactically best interest and one’s duty |
Question 2
4 out of 4 points
| Economic profit is defined as the difference between revenue and ____. | ||||
| Selected Answer: total economic costCorrect Answer: total economic cost |
Question 3
4 out of 4 points
| To reduce Agency Problems, executive compensation should be designed to: | ||||
| Selected Answer: create incentives so that managers act like owners of the firm.Correct Answer: create incentives so that managers act like owners of the firm. |
Question 4
4 out of 4 points
| Shirking of one’s duties is often encountered in team production settings because | ||||
| Selected Answer: teammates face a dilemma posed by a dominant strategy to shirkCorrect Answer: teammates face a dilemma posed by a dominant strategy to shirk |
Question 5
4 out of 4 points
| The form of economics most relevant to managerial decision-making within the firm is: | ||||
| Selected Answer: microeconomicsCorrect Answer: microeconomics |
Question 6
4 out of 4 points
| The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn? | ||||
| Selected Answer: Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return.Correct Answer: Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return. |
Question 7
4 out of 4 points
| The ____ is the ratio of ____ to the ____. | ||||
| Selected Answer: coefficient of variation; standard deviation; expected valueCorrect Answer: coefficient of variation; standard deviation; expected value |
Question 8
4 out of 4 points
| The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are: | ||||
| Selected Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute riskCorrect Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk |
Question 9
4 out of 4 points
| Generally, investors expect that projects with high expected net present values also will be projects with | ||||
| Selected Answer: high riskCorrect Answer: high risk |
Question 10
4 out of 4 points
| The level of an economic activity should be increased to the point where the ____ is zero. | ||||
| Selected Answer: net marginal benefitCorrect Answer: net marginal benefit |
Question 11
4 out of 4 points
| The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution) | ||||
| Selected Answer: 15.87%Correct Answer: 15.87% |
Question 12
4 out of 4 points
| An closest example of a risk-free security is | ||||
| Selected Answer: U.S. Government Treasury billsCorrect Answer: U.S. Government Treasury bills |
Question 13
4 out of 4 points
| Those goods having a calculated income elasticity that is negative are called: | ||||
| Selected Answer: inferior goodsCorrect Answer: inferior goods |
Question 14
4 out of 4 points
| When demand elasticity is ____ in absolute value (or ____), an increase in price will result in a(n) ____ in total revenues. | ||||
| Selected Answer: less than 1; inelastic; increaseCorrect Answer: less than 1; inelastic; increase |
Question 15
4 out of 4 points
| Which of the following would tend to make demand INELASTIC? | ||||
| Selected Answer: the proportion of the budget spent on the item is very smallCorrect Answer: the proportion of the budget spent on the item is very small |
Question 16
4 out of 4 points
| An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except: | ||||
| Selected Answer: level of competitor advertisingCorrect Answer: level of competitor advertising |
Question 17
4 out of 4 points
| Marginal revenue (MR) is ____ when total revenue is maximized. | ||||
| Selected Answer: equal to zeroCorrect Answer: equal to zero |
Question 18
4 out of 4 points
| An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____. | ||||
| Selected Answer: one percent; quantity demanded; two percentCorrect Answer: one percent; quantity demanded; two percent |
Question 19
4 out of 4 points
| Songwriters and composers press music companies to lower the price for music downloads because | ||||
| Selected Answer: songwriter royalties are a percentage of sales revenueCorrect Answer: songwriter royalties are a percentage of sales revenue |
Question 20
4 out of 4 points
| The estimated slope coefficient (b) of the regression equation (Ln Y = a + b Ln X) measures the ____ change in Y for a one ____ change in X. | ||||
| Selected Answer: percentage, percentCorrect Answer: percentage, percent |
Question 21
4 out of 4 points
| The method which can give some information in estimating demand of a product that hasn’t yet come to market is: | ||||
| Selected Answer: the consumer surveyCorrect Answer: the consumer survey |
Question 22
4 out of 4 points
| All of the following are reasons why an association relationship may not imply a causal relationship except: | ||||
| Selected Answer: the association may be hypotheticalCorrect Answer: the association may be hypothetical |
Question 23
4 out of 4 points
| In regression analysis, the existence of a significant pattern in successive values of the error term constitutes: | ||||
| Selected Answer: autocorrelationCorrect Answer: autocorrelation |
Question 24
4 out of 4 points
| When two or more “independent” variables are highly correlated, then we have: | ||||
| Selected Answer: multicollinearityCorrect Answer: multicollinearity |
Question 25
4 out of 4 points
| In regression analysis, the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes: | ||||
| Selected Answer: multicollinearityCorrect Answer: multicollinearity |
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