ECO 550 Midterm Exam 1
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ECO 550 MIDTERM EXAM 1
1. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
2. The level of an economic activity should be increased to the point where the ____ is zero.
3. The ____ is the ratio of ____ to the ____.
4. The standard deviation is appropriate to compare the risk between two investments only if
5. The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
6. An closest example of a risk-free security is
7. 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. 8. The form of economics most relevant to managerial decision-making within the firm is:
9. Shirking of one’s duties is often encountered in team production settings because
10. A Real Option Value is 11. Economic profit is defined as the difference between revenue and ____.
12. The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?
13. An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.
14. An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except
15. Which of the following would tend to make demand INELASTIC
16. When demand elasticity is ____ in absolute value (or ____), an increase in price will result in a(n) ____ in total revenues.
17. Songwriters and composers press music companies to lower the price for music downloads because.
18. A price elasticity (ED) of −1.50 indicates that for a ____ increase in price, quantity demanded will ____ by ____. 19. If demand were inelastic, then we should immediately:
20. The standard deviation of the error terms in an estimated regression equation is known as:
21. In testing whether each individual independent variables (Xs) in a multiple regression equation is statistically significant in explaining the dependent variable (Y), one uses the:
22. When two or more "independent" variables are highly correlated, then we have:
23. One commonly used test in checking for the presence of autocorrelation when working with time series data is the ____.
24. Even though insignificant explanatory variables can raise the adjusted R2 of a demand function, one should not interpret their effects on the regression when
25. All of the following are reasons why an association relationship may not imply a causal relationship except: