Marginal Cost and Correct Answer
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
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