# ECO 550 Mid-Term Quiz 1 and 2

## ECO 550 Mid-Term Quiz 1 and 2

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 relationship may not imply a causal relationship except:

16

Demand functions in the...