ECO 550 WK 5 Midterm Exam
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.
• Question 1
Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:
• Question 2
The primary objective of a for-profit firm is to ___________.
• Question 3
Income tax payments are an example of ____.
• Question 4
Economic profit is defined as the difference between revenue and ____.
• Question 5
A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
• Question 6
The standard deviation is appropriate to compare the risk between two investments only if
• Question 7
The level of an economic activity should be increased to the point where the ____ is zero.
• Question 8
The net present value of an investment represents
• Question 9
An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.
• Question 10
A price elasticity (ED) of −1.50 indicates that for a ____ increase in price, quantity demanded will ____ by ____.
• Question 11
Marginal revenue (MR) is ____ when total revenue is maximized.
• Question 12
An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except:
• Question 13
When using a multiplicative power function (Y = a X1b1 X2b2 X3b3) to represent an economic relationship, estimates of the parameters (a, and the b’s) using linear regression analysis can be obtained by first applying a ____ transformation to convert the function to a linear relationship.
• Question 14
The method which can give some information in estimating demand of a product that hasn’t yet come to market is:
• Question 15
When two or more “independent” variables are highly correlated, then we have:
• Question 16
One commonly used test in checking for the presence of autocorrelation when working with time series data is the ____.
• Question 17
Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?
• Question 18
Time-series forecasting models:
• Question 19
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:
• Question 20
Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry?
• Question 21
The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time
• Question 22
If the British pound (₤) appreciates by 10% against the dollar:
• Question 23
Companies that reduce their margins on export products in the face of appreciation of their home currency may be motivated by a desire to
• Question 24
Using demand and supply curves for the Japanese yen based on the $/¥ price for yen, an increase in US INFLATION RATES would
• Question 25
Marginal factor cost is defined as the amount that an additional unit of the variable input adds to ____.
• Question 26
Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given industry, this industry would have:
• Question 27
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:
• Question 28
The primary purpose of the Cobb-Douglas power function is to:
• Question 29
Which of the following statements concerning the long-run average cost curve of economic theory is true?
• Question 30
The cost function is:
• Question 31
• Question 32
According to the theory of cost, specialization in the use of variable resources in the short-run results initially in