# ECO 550 WK 5 Midterm Exam

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