Question1:
One commonly used test in checking for the presence of autocorrelation when working with time series data is the ____.
Answer
F-test
Durbin-Watson test
t-test
z-test

Question 2
When two or more "independent" variables are highly correlated, then we have:
Answer
the identification problem
multicollinearity
autocorrelation
heteroscedasticity
complementary products

Question 3
The Identification Problem in the development of a demand function is a result of:
Answer
the variance of the demand elasticity
the consistency of quantity demanded at any given point
the negative slope of the demand function
the simultaneous relationship between the demand and supply functions

Question 4
The method which can give some information in estimating demand of a product that hasn't yet come to market is:
Answer
the consumer survey
market experimentation
a statistical demand analysis
plotting the data
the barometric method

Question 5
All of the following are reasons why an association relationship may not imply a causal relationship except:
Answer
the association may be due to pure chance
the association may be the result of the influence of a third common factor
both variables may be the cause and the effect at the same time
the association may be hypothetical

Question 6
Demand functions in the multiplicative form are most common for all of the following reasons except:
Answer
elasticities are constant over a range of data
ease of estimation of elasticities
exponents of parameters are the elasticities of those variables
marginal impact of a unit change in an individual variable is constant

Question 7
Producers' goods are:
Answer
consumers' goods
raw materials combined to produce consumer goods
durable goods used by consumers
always more expensive when used by corporations

Question 8
The factor(s) which cause(s) a movement along the demand curve include(s):
Answer
increase in level of advertising
decrease in price of complementary goods
increase in consumer disposable income
decrease in price of the good demanded

Question 9
If demand were inelastic, then we should immediately:
Answer
cut the price.
keep the price where it is.
go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve.
stop selling it since it is inelastic.
raise the price.

Question 10
Those goods having a calculated income elasticity that is negative are called:
Answer
producers' goods
durable goods
inferior goods
nondurable goods

Question 11
Auto dealers slash prices at the end of the model year in response to deficient demand/excess inventory but restaurants facing the same problem slash production because
Answer
auto customers are less price sensitive than restaurant customers
price elasticity of demand (in absolute values) is higher for auto than restaurant customers
price elasticity of supply is lower in auto than in restaurants
restaurant food spoils quickly and is much more perishable
price elasticity of supply in autos is smaller than the absolute value of price elasticity of demand but the reverse is true for restaurants

Question 12
An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except:
Answer
price of substitute goods
level of competitor advertising
consumer income level
consumer desires for goods and services

Question 13
Songwriters and composers press music companies to lower the price for music downloads because
Answer
demand for on-line music is inelastic
profits are maximized where price elasticity of demand is -1.0
songwriter royalties are a percentage of sales revenue
profits and total revenue are maximized at different quantities
profits are maximized at the same prices as sales revenue

Question 14
The primary objective of a for-profit firm is to ___________.
Answer
maximize agency costs
minimize average cost
maximize total revenue
set output where total revenue equals total cost
maximize shareholder value

Question 15
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
profits (cash flows)
revenues
outlays
costs
investments

Question 16
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
Answer
cash bonuses based on length of service with the firm
bonuses for resisting hostile takeovers
requiring officers to own stock in the company
large corporate staffs

Question 17
The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?
Answer
Saturn's cars sold at prices higher than rivals Honda or Toyota, so they could not sell many cars.
Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return.
Saturn found that young buyers of Saturn automobiles were very loyal to Saturn and GM.
Saturn implemented a change management view that helped make first time Saturn purchasers trade up to Buick or Cadillac.

Question 18
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?
Answer
risk-bearing theory of profit
dynamic equilibrium theory of profit
innovation theory of profit
managerial efficiency theory of profit
stochastic optimization theory of profit

Question 19
The moral hazard in team production arises from
Answer
poorly designed team membership
lack of proper assignment of individual tasks
disorganization in groups
a conflict between tactically best interest and one's duty
insufficient experience

Question 20
The ____ is the ratio of ____ to the ____.
Answer
standard deviation; covariance; expected value
coefficient of variation; expected value; standard deviation
correlation coefficient; standard deviation; expected value
coefficient of variation; standard deviation; expected value

Question 21
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?
Answer
U.S. Government bonds
municipal bonds
common stock
commercial paper

Question 22
The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
Answer
68.26%
2.28%
34%
15.87%

Question 23
The level of an economic activity should be increased to the point where the ____ is zero.
Answer
marginal cost
average cost
net marginal cost
net marginal benefit

Question 24
An closest example of a risk-free security is
Answer
General Motors bonds
AT&T commercial paper
U.S. Government Treasury bills
San Francisco municipal bonds
an I.O.U. that your cousin promises to pay you $100 in 3 months

Question 25
The standard deviation is appropriate to compare the risk between two investments only if
Answer
the expected returns from the investments are approximately equal
the investments have similar life spans
objective estimates of each possible outcome is available
the coefficient of variation is equal to 1.0