eco550 midterm
Midterm Exam Part 1
• Question 1
0 out of 4 points The level of an economic activity should be increased to the point where the ____ is zero.Answer Selected Answer: marginal cost Correct Answer: net marginal benefit
• Question 2
4 out of 4 points The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:Answer Selected Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk Correct Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk
• Question 3
4 out of 4 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 4
4 out of 4 points The standard deviation is appropriate to compare the risk between two investments only ifAnswer Selected Answer: the expected returns from the investments are approximately equal Correct Answer: the expected returns from the investments are approximately equal
• Question 5
4 out of 4 points The ____ is the ratio of ____ to the ____.Answer Selected Answer: coefficient of variation; standard deviation; expected value Correct Answer: coefficient of variation; standard deviation; expected value
• Question 6
4 out of 4 points A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.Answer Selected Answer: marginal costs Correct Answer: marginal costs
• Question 7
0 out of 4 points A price elasticity (ED) of −1.50 indicates that for a ____
• Question 1
0 out of 4 points The level of an economic activity should be increased to the point where the ____ is zero.Answer Selected Answer: marginal cost Correct Answer: net marginal benefit
• Question 2
4 out of 4 points The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:Answer Selected Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk Correct Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk
• Question 3
4 out of 4 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 4
4 out of 4 points The standard deviation is appropriate to compare the risk between two investments only ifAnswer Selected Answer: the expected returns from the investments are approximately equal Correct Answer: the expected returns from the investments are approximately equal
• Question 5
4 out of 4 points The ____ is the ratio of ____ to the ____.Answer Selected Answer: coefficient of variation; standard deviation; expected value Correct Answer: coefficient of variation; standard deviation; expected value
• Question 6
4 out of 4 points A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.Answer Selected Answer: marginal costs Correct Answer: marginal costs
• Question 7
0 out of 4 points A price elasticity (ED) of −1.50 indicates that for a ____