ECO 550 Midterm Quiz

ECO
550 Midterm Quiz
This midterm exam consist of 32 multiple choice
questions and covers the material in Chapters 1 through 8. There are four
questions from each chapter.
1). The flat-screen plasma TVs are selling extremely
well. The originators of this technology
are earning higher profits. What theory
of profit best reflects the performance of the plasma screen makers?
2). To reduce Agency Problems, executive compensation
should be designed to:
3). Economic profit is defined as the difference
between revenue and ____.
4). Which of the following will increase (V0), the
shareholder wealth maximization model of the firm:
5). A change in the level of an economic activity is
desirable and should be undertaken as long as the marginal benefits exceed the
____.
6). The closest example of a risk-free security is
7). The primary difference(s) between the standard
deviation and the coefficient of variation as measures of risk are:
8). The ____ is the ratio of ____ to the ____.
9). If demand were inelastic, then we should
immediately:
10). Producers’ goods are:
11). Marginal revenue (MR) is ____ when total revenue
is maximized.
12). Suppose we estimate that the demand elasticity
for fine leather jackets is?.7 at their current
prices. Then we know that:
13). The method which can give some information in
estimating demand of a product that hasn’t yet come to market is:
14). The standard deviation of the error terms in an
estimated regression equation is known as:
15). All of the following are reasons why an
association relationship may not imply a causal relationship except:
16). Demand functions in the multiplicative form are
most common for all of the following reasons except:
17). The variation in an economic time-series which is
caused by major expansions or contractions usually of greater than a year in
duration is known as:
18). The forecasting technique which attempts to
forecast short-run changes and makes use of economic indicators known as
leading, coincident or lagging indicators is known as:
19). The type of economic indicator that can best be
used for business forecasting is the:
20). An example of a time series data set is one for
which the:
21). The optimal currency area involves a trade-off of
reducing transaction costs but the inability to use changes in exchange rates
to help ailing regions. If the US,
Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to
see all of the following EXCEPT:
22). Trading partners should specialize in producing
goods in accordance with comparative advantage, then trade and diversify in
consumption because
23). In an open economy with few capital restrictions
and substantial import-export trade, a rise in interest rates and a decline in
the producer price index of inflation will
24). Using demand and supply curves for the Japanese
yen based on the $/Â¥ price for yen, an increase in US INFLATION RATES would
25). The following is a Cobb-Douglas production
function: Q = 1.75K0.5?L0.5. What is correct here?
26). Which of the following is never negative?
27). If the marginal product of labor is 100 and the
price of labor is 10, while the marginal product of capital is 200 and the
price of capital is $30, then what should the firm?
28). In a production process, an excessive amount of
the variable input relative to the fixed input is being used to produce the
desired output. This statement is true for:
29). What method of inventory valuation should be used
for economic decision-making problems?
30). ____ are defined as costs which are incurred
regardless of the alternative action chosen in a decision-making problem.
31). If TC = 321 + 55Q – 5Q2, then average total cost
at Q = 10 is:
32). According to the theory of cost, specialization in
the use of variable resources in the short-run results initially in