Marginal Cost and Correct Answer

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Question 1
5 out of 5 points

Economic profit is defined as the difference between revenue and ____. Answer
Selected Answer:
total economic cost
Correct Answer:
total economic cost
Question 2
5 out of 5 points

Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women. The new frequency recommendation was designed to address the family histories of the patients. The optimal frequency should be where the marginal benefit of an additional pap-test: Answer

Selected Answer:
equals the marginal cost of the test

Correct Answer:
equals the marginal cost of the test

Question 3
5 out of 5 points

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

Selected Answer:
innovation theory of profit
Correct Answer:
innovation theory of profit
Question 4
5 out of 5 points

To reduce Agency Problems, executive compensation should be designed to: Answer
Selected Answer:
create incentives so that managers act like owners of the firm. Correct Answer:
create incentives so that managers act like owners of the firm. Question 5
5 out of 5 points

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
Selected Answer:
common stock
Correct Answer:
common stock
Question 6
5 out of 5 points

Generally, investors expect that projects with high expected net present values also will be projects with Answer
Selected Answer:
high risk
Correct Answer:
high risk
Question 7
0 out of 5 points

The ____ is the ratio of ____ to the ____.
Answer
Selected Answer:
correlation coefficient; standard deviation; expected value
Correct Answer:
coefficient of variation; standard deviation; expected value Question 8
5 out of 5 points

The net present value of an investment represents
Answer
Selected Answer:
the expected contribution of that investment to the goal of shareholder wealth maximization Correct Answer:
the expected contribution of that investment to the goal of shareholder wealth maximization Question 9
5 out of 5 points

Suppose we estimate that the demand elasticity for fine leather jackets is ‑.7 at their current prices. Then we know that: Answer
Selected Answer:
a 1% increase in price reduces quantity sold by .7%.
Correct Answer:
a 1% increase in price reduces quantity sold by .7%.
Question 10
5 out of 5 points

Marginal revenue (MR) is ____ when total revenue is maximized. Answer
Selected Answer:
equal to zero
Correct Answer:
equal to zero
Question 11
5 out of 5 points

Those goods having a calculated income elasticity that is negative are called: Answer
Selected Answer:
inferior goods
Correct Answer:
inferior goods
Question 12
5 out of 5 points

An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____. Answer
Selected Answer:
one percent; quantity demanded; two percent
Correct Answer:
one percent; quantity demanded; two percent
Question 13
0 out of 5 points

The method which can give some information in estimating demand of a product that hasn’t yet come to market is: Answer
Selected Answer:
the barometric method
Correct Answer:
the consumer survey
Question 14
5 out of 5 points

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. Answer

Selected Answer:
double-logarithmic
Correct Answer:
double-logarithmic
Question 15
0 out of 5 points

The standard deviation of the error terms in an estimated regression equation is known...
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