ECO 550 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 duty

Correct 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 cost

Correct 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











·  Question 5

4 out of 4 points




The form of economics most relevant to managerial decision-making within the firm is:











·  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?











·  Question 7

4 out of 4 points




The ____ is the ratio of ____ to the ____.











·  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 risk

Correct 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











·  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 benefit

Correct 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)











·  Question 12

4 out of 4 points




An closest example of a risk-free security is











·  Question 13

4 out of 4 points




Those goods having a calculated income elasticity that is negative are called:











·  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.











·  Question 15

4 out of 4 points




Which of the following would tend to make demand INELASTIC?











·  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:











·  Question 17

4 out of 4 points




Marginal revenue (MR) is ____ when total revenue is maximized.











·  Question 18

4 out of 4 points




An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.











·  Question 19

4 out of 4 points




Songwriters and composers press music companies to lower the price for music downloads because











·  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.











·  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:











·  Question 22

4 out of 4 points




All of the following are reasons why an association relationship may not imply a causal relationship except:











·  Question 23

4 out of 4 points




In regression analysis, the existence of a significant pattern in successive values of the error term constitutes:











·  Question 24

4 out of 4 points




When two or more "independent" variables are highly correlated, then we have:











·  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:








Field of study: 
Date Due: 
Monday, September 3, 2018

Answer

ECO 550 Mid term 1

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