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ECO 550 Midterm Exam
1. Income tax payments are an example of ____.
2. The moral hazard in team production arises from
3. Which of the following will increase (V0), the shareholder wealth maximization model of the firm: V0∙(shares outstanding) = Σ∞t=1 (π t ) / (1+ke)t + Real Option Value.
4. In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.
5. 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, 6. 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? 7. An closest example of a risk-free security is
8. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
9. The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:
10. 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?
11. The ____ is the ratio of ____ to the ____.
12.The level of an economic activity should be increased to the point where the ____ is zero.
13. The factor(s) which cause(s) a movement along the demand curve include(s): 14. Iron ore is an example of a:
15. Suppose we estimate that the demand elasticity for fine leather jackets is .7 at their current prices. Then we know that:
16. Producers' goods are:
17. When demand is ____ a percentage change in ____...
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