ECO 550 Midterm Exam 12

ECO 550 Midterm
Exam 12

1. Which of the
following will increase (V0), the shareholder wealth maximization model of the
firm: V0?(shares outstanding) = ??t=1 (? t ) / (1+ke)t + Real Option

2. Shirking of
one’s duties is often encountered in team production settings because

3. The Saturn
Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?

4. Possible goals
of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:

5. Recently, the
American Medical Association changed its recommendations on the frequency of
pap-smear exams for women. The new
frequency recommendation was designed to address the family histories of the
patients. The optimal frequency should
be where the marginal benefit of an additional pap-test:
7. The level of
an economic activity should be increased to the point where the ____ is zero.
8. The primary
difference(s) between the standard deviation and the coefficient of variation
as measures of risk are:
9. The ____ is
the ratio of ____ to the ____.
10. The
approximate probability of a value occurring that is greater than one standard
deviation from the mean is approximately (assuming a normal distribution)
11. Generally,
investors expect that projects with high expected net present values also will
be projects with
12. The standard
deviation is appropriate to compare the risk between two investments only if
13. Marginal
revenue (MR) is ____ when total revenue is maximized.
14. If demand
were inelastic, then we should immediately:
15. Iron ore is
an example of a:
16. A price
elasticity (ED) of ?1.50 indicates that for a ____ increase in price, quantity
demanded will ____ by ____.
17. When demand
is ____ a percentage change in ____ is exactly offset by the same percentage
change in ____ demanded, the net result being a constant total consumer
expenditure.
18. When demand
elasticity is ____ in absolute value (or ____), an increase in price will
result in a(n) ____ in total revenues.
19. Suppose we
estimate that the demand elasticity for fine leather jackets is .7 at their
current prices. Then we know that:
20. In regression
analysis, the existence of a high degree of intercorrelation among some or all
of the explanatory variables in the regression equation constitutes:
21. Even though
insignificant explanatory variables can raise the adjusted R2 of a demand
function, one should not interpret
their effects on the regression when
22. The standard
deviation of the error terms in an estimated regression equation is known as:
23. The constant
or intercept term in a statistical demand study represents the quantity
demanded when all independent variables are equal to:Answer
24. One commonly
used test in checking for the presence of autocorrelation when working with
time series data is the ____.
25. All of the
following are reasons why an association relationship may not imply a causal
relationship except: