ECON 5370 EXAM QUESTIONS AND CORRECT ANSWERS
100% VERIFIED
The underlying principle of the marginal approach is that changes in economic variables
controlled by the firm should be undertaken anytime such changes
A. add to the firm's total revenue
B. decrease total cost
C. increase both total revenue and total cost
D. increase total revenue more than increase in total cost - ANSWER increase total
revenue more than increase in total cost
Which is not true for the result of globalization
A. it increases international trade & investment as well as competition for the firms
B. it increases business opportunities
C. It decreases risks and uncertainties for the firms
D. it broadens both the internal and external environment of the firms - ANSWER It
decreases risks and uncertainties for the firms
In the present value of the firm model, a lower risk-premium associated with the
expected future cash flows (or economic profits) would:
A. decrease investment to the firm
B. decrease the stock price of the firm
C. increase the present value of the firm
D. increases the required rate of return - ANSWER increase the present value of the firm
A pure public good (or social good) is a good or service:
A. produced by private individuals and financed by contribution from the general public
, B. produced by private firms but financed by government
C. produced by government only
D. this is consumed jointly by payers and non-payers - ANSWER this is consumed jointly
by payers and non-payers
A farmer Iowa wishes to hedge against adverse price movements in selling corn in the
future. This farmer can hedge by:
A. buying commodity futures contract on corn at the Chicago Board of Trade
B. buying financial futures on Treasury securities at the Chicago Board of Trade
C. selling commodity futures contract on corn at the Chicago Board of Trade
D. selling corn in the cash market - ANSWER selling commodity futures contract on corn
at the Chicago Board of Trade
Which of the following is not considered an appropriate way for managers to deal with
risk?
A. diverse of investment
B. purchase of firm (or product) -specific assets rather than assets of general purpose
C. gain control over some of the environment variables or gather information
D. hedging using futures or forward contract - ANSWER purchase of firm (or product)
-specific assets rather than assets of general purpose
The number of defective products (Xi) in a sample of 20000 has an expected value of Mu
= 10 units. The Std. Dev. is 3 defective products. Assuming a normal distribution, the z
value:
A. for Xi = 18 defective products is 6
B. for Xi = 16 defective products is 3
C. for Xi = 7 defective products is -1
D. for Xi = 15 defective products is 5 - ANSWER for Xi = 7 defective products is -1
(Xi-Mu)/Std. Dev. ???
100% VERIFIED
The underlying principle of the marginal approach is that changes in economic variables
controlled by the firm should be undertaken anytime such changes
A. add to the firm's total revenue
B. decrease total cost
C. increase both total revenue and total cost
D. increase total revenue more than increase in total cost - ANSWER increase total
revenue more than increase in total cost
Which is not true for the result of globalization
A. it increases international trade & investment as well as competition for the firms
B. it increases business opportunities
C. It decreases risks and uncertainties for the firms
D. it broadens both the internal and external environment of the firms - ANSWER It
decreases risks and uncertainties for the firms
In the present value of the firm model, a lower risk-premium associated with the
expected future cash flows (or economic profits) would:
A. decrease investment to the firm
B. decrease the stock price of the firm
C. increase the present value of the firm
D. increases the required rate of return - ANSWER increase the present value of the firm
A pure public good (or social good) is a good or service:
A. produced by private individuals and financed by contribution from the general public
, B. produced by private firms but financed by government
C. produced by government only
D. this is consumed jointly by payers and non-payers - ANSWER this is consumed jointly
by payers and non-payers
A farmer Iowa wishes to hedge against adverse price movements in selling corn in the
future. This farmer can hedge by:
A. buying commodity futures contract on corn at the Chicago Board of Trade
B. buying financial futures on Treasury securities at the Chicago Board of Trade
C. selling commodity futures contract on corn at the Chicago Board of Trade
D. selling corn in the cash market - ANSWER selling commodity futures contract on corn
at the Chicago Board of Trade
Which of the following is not considered an appropriate way for managers to deal with
risk?
A. diverse of investment
B. purchase of firm (or product) -specific assets rather than assets of general purpose
C. gain control over some of the environment variables or gather information
D. hedging using futures or forward contract - ANSWER purchase of firm (or product)
-specific assets rather than assets of general purpose
The number of defective products (Xi) in a sample of 20000 has an expected value of Mu
= 10 units. The Std. Dev. is 3 defective products. Assuming a normal distribution, the z
value:
A. for Xi = 18 defective products is 6
B. for Xi = 16 defective products is 3
C. for Xi = 7 defective products is -1
D. for Xi = 15 defective products is 5 - ANSWER for Xi = 7 defective products is -1
(Xi-Mu)/Std. Dev. ???
