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ECO 550 Mid-Term Quiz 1 and 2
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MIDTERM QUIZ 1
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:
Correct Answer: create incentives so that managers act like owners of the firm.
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:
V0∙(shares outstanding) = Σ∞t=1 (π t ) / (1+ke)t + Real Option Value.
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

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