ECO 550 MIDTERM EXAM 1 (500 Questions and Answers) (A GUARANTEED)

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ECO 550 MIDTERM EXAM 1 (500 Questions and Answers) (A GUARANTEED) Question 1 4 out of 4 points A change in the level of an economic activity is desirable and should be undertaken as long as the m... arginal benefits exceed the ____. Answer Selected Answer: marginal costs Correct Answer: marginal costs Question 2 4 out of 4 points The level of an economic activity should be increased to the point where the ____ is zero. Answer Selected Answer: net marginal benefit Correct Answer: net marginal benefit Question 3 4 out of 4 points The ____ is the ratio of ____ to the ____. Answer Selected Answer: coefficient of variation; standard deviation; expected value Correct Answer: coefficient of variation; standard deviation; expected value Question 4 4 out of 4 points The standard deviation is appropriate to compare the risk between two investments only if Answer Selected Answer: the expected returns from the investments are approximately equal Correct Answer: the expected returns from the investments are approximately equal Question 5 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) Answer Selected Answer: 15.87% Correct Answer: 15.87% • Question 6 4 out of 4 pointsAn closest example of a risk-free security is Answer Selected Answer: U.S. Government Treasury bills Correct Answer: U.S. Government Treasury bills • Question 7 4 out of 4 points In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return. Answer Selected Answer: profits (cash flows) Correct Answer: profits (cash flows) • Question 8 4 out of 4 points The form of economics most relevant to managerial decision-making within the firm is: Answer Selected Answer: microeconomics Correct Answer: microeconomics • Question 9 4 out of 4 points Shirking of one’s duties is often encountered in team production settings because Answer Selected Answer: teammates face a dilemma posed by a dominant strategy to shirk Correct Answer: teammates face a dilemma posed by a dominant strategy to shirk • Question 10 4 out of 4 points A Real Option Value is: Answer Selected Answer: An opportunity to implement cost savings or revenue expansion in a flexible business plan. Correct Answer: An opportunity to implement cost savings or revenue expansion in a flexible business plan. • Question 11 4 out of 4 points Economic profit is defined as the difference between revenue and ____. AnswerSelected Answer: total economic cost Correct Answer: total economic cost • Question 12 4 out of 4 points The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn? Answer 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 13 4 out of 4 points An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____. Answer Selected Answer: one percent; quantity demanded; two percent Correct Answer: one percent; quantity demanded; two percent [Show More]

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