Archives: Quiz

1) Refer to the diagram for a nondiscriminating monopolist. If the government regulates the monopolist so that it charges the “fair return” price, the monopolist will produce output N. 2) In dealing with market failures, the government always bases its […]

1) Firms that pay efficiency wages tend to have higher worker turnover. 2) The principal-agent problem in labor markets arises because of the possibility of shirking by workers. Answer: TRUE 3) Usury laws are a special case of “price floors” […]

1) The presence of large and fast-growing populations in developing countries contributes to lower per capita incomes. 2) Economic analysis would focus on the size of the government, in order to assess whether or not it fosters economic efficiency. Answer: […]

1) The interest rate is the price paid for the use of money. 2) ITQs both limit catches and encourage fishing in the least costly way. Answer: TRUE 3) In analyzing a market system, economists often assume that firms will […]

1) If income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising. 2) The risk that the firm’s employees might get hurt while working is an […]

1) A voluntary export restraint (VER) is similar to an import quota; except that the former benefits the foreign producers while the latter benefits the domestic producers. 2) Monopolistically competitive firms have some control over the price of their products. […]

1) Oligopoly firms may produce either standardized or differentiated products. 2) Price discrimination is illegal in the United States under antitrust regulations. Answer: FALSE 3) Refer to the diagrams. Firm B’s average revenue curve coincides with its marginal revenue curve. […]

1) Process innovation is represented as a downward shift in a firm’s total product curve and its average total cost curve. 2) A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes. Answer: TRUE 3) […]

1) When the inflation rate is 4 percent and the nominal interest rate on long-term government bonds is 8 percent, the real interest rate is 12 percent. 2) Firms are more likely to collude when the economy is in a […]

1) The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping. 2) The arguments that illegal immigrants do not take away jobs from legal residents, […]

1) The principal beneficiaries of government agricultural aid have been the very low-income farmers. 2) If a firm doubles its resource inputs and as a result output triples, then the long-run average cost curve must be upward-sloping. Answer: FALSE 3) […]

1) An increase in demand accompanied by an increase in supply will increase the equilibrium quantity, but the effect on equilibrium price will be indeterminate. 2) Present value is the amount to which some current amount of money will grow […]

1) When average costs are increasing, marginal costs are greater than average costs. 2) In the U.S. in 2010, the top 1% of households held 35% of total wealth – leaving 65% of wealth to the remaining 99% of households. […]

1) In pure competition, the industry demand curve is infinitely price elastic. 2) A good with a price-elasticity coefficient of 0.75 has a demand that is price-inelastic. Answer: TRUE 3) The basic difference between pure competition and monopolistic competition is […]

1) If an investor uses a reinvestment plan to invest income dividends and capital-gain distributions: A.then both the income dividends and capital-gain distributions are tax-exempt. B.only the income dividends are tax-exempt. C.only the capital-gain distributions are tax-exempt. D.both the income […]

1) Which type of government agencies publish materials to assist consumers with buying decisions and financial planning? A.Federal B.Local C.State D.All of these E.None of these 2) A REIT is a firm that pools investor funds and invests them in […]

1) An advantage of purchasing diamonds for investment purposes is that: A.diamonds are not easily turned into cash. B.diamonds are relatively limited in supply. C.diamonds are largely controlled by DeBeers Consolidated Mines of South Africa. D.the grading of diamonds is […]

1) Which one of the following is an advantage of renting? A.Unrestricted lifestyle B.Tax benefits C.Fewer responsibilities D.An ability to build equity E.Increased equity 2) Personal risks are the uncertainties surrounding the loss of income or life due to all […]

1) The expected value of a vehicle at the end of a lease is called the: A.residual value. B.unit price. C.sticker price. D.capitalized cost. E.money factor. 2) A ______ is a financially independent firm that acts as the bondholder’s representative. […]

1) Which of the following might qualify Amy Farmer for a premium discount on her automobile insurance? A.Completing a driver’s training program B.Earning straight A’s in college C.Installing an alarm system in her car D.Participating in a carpool five days […]

1) Which of the following can cause a bond investor to lose money? A.Selling a bond prior to maturity and at a time when the market interest rate exceeds the bond’s interest rate B.Converting a bond into shares of common […]

1) Which of the following reasons explain why investors purchase bonds? A.To provide asset allocation B.To produce income for current financial needs C.To match maturity dates with future financial needs D.To have a conservative investment during an economic downturn E.Investors […]

1) For government bonds, the price that a dealer is willing to pay for a government security is called the: A.dirty price. B.asked price. C.bid price. D.clean price. 2) A simple will, which leaves everything to the spouse, is also […]

1) The process of establishing a monetary fund to cover the cost of a loss is called: A.risk avoidance. B.self-insurance. C.risk shifting. D.risk reduction. E.endorsement. 2) Up to what percent of your Social Security benefits may be subject to federal […]

1) This type of financial institution is known to frequently offer the lowest loan rates: A.Commercial bank B.Savings and loans association C.Mutual savings bank D.Credit union E.Investment companies 2) James Brewer purchased 100 shares of stock for $72 a share. […]

1) What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return? A.Office audit B.Correspondence audit C.Field audit D.Taxpayer compliance measurement program audit E.Random audit 2) In how many […]

1) Federal laws limit the amount of fraudulent charges that a consumer is liable for in the case of a lost or stolen card to: A.$50 B.$100 C.$150 D.$250 E.$500 2) Over the past 50 years, stocks have returned approximately […]

1) Debit cards are also often called: A.bank cards. B.ATM cards. C.cash cards. D.check cards. E.All of these 2) As of 2013, what is the maximum yearly amount that an individual can give as a gift without incurring gift tax […]

1) Ashley Riley wants to buy the stock of XYZ Company at a specified price. What type of order should she place? A.Market order B.Limit order C.Stop order D.Discretionary order E.Common order 2) The first step of the career planning […]

1) Which of the following would be an advantage of leasing a vehicle? A.Automatic ownership interest in the car B.Unlimited mileage on the car C.No need to meet credit requirements D.Lease payments are likely to be lower than loan payments […]

1) People born after 1928 need at least how many quarters of coverage to qualify for Social Security benefits? A.20 B.40 C.60 D.80 E.100 2) Which of the following would not be considered personal property under a typical homeowner’s insurance […]

1) The primary reason people buy a vacation home is: A.to use as a family vacation retreat. B.for tax reasons. C.for rental income. D.for their grown children to live in. E.to eventually use it as their primary residence. 2) Which […]

1) Last year, High-Tech Electronics earned $1.50 per share. If the current market value for a share of stock is $45, what is the firm’s P-E ratio? A.0.03 B.3.30 C.30.00 D.33.00 E.45.00 2) A scam that involves malicious software or […]

1) Which statement is not true about an ethical will? A.It is used to pass on your values and beliefs to your heirs. B.It is a legally binding document. C.It dispenses emotional and spiritual wealth. D.It requires earnest self-examination. E.It […]

1) A ____________ resume presents a person’s education, work experience, and other information in a reverse time-sequence. A.goal-oriented B.functional C.chronological D.targeted E.data base 2) A cost associated with renting would be: A.property insurance. B.maintenance costs. C.title insurance. D.security deposit. E.points. […]

1) Most speculators use a buy and hold technique. 2) The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions. Answer: TRUE 3) A renter is required to pay a security […]

1) Ease of mobility is an advantage of renting. 2) Trade balance is defined as the difference between a country’s exports and its imports. Answer: TRUE 3) Real estate advisors suggest a price-to-rent ratio of 25 or lower when you […]

1) Prepaid interest may be a part of a mortgage agreement. 2) In the U.S., administrative costs consume nearly 11 percent of health care dollars, compared to 1 percent under Canada’s socialized system. Answer: TRUE 3) A home equity loan […]

1) Tax evasion is the use of illegal actions to reduce one’s taxes. 2) In order to calculate savings ratio, the amount saved each month is divided by net income. Answer: FALSE 3) A payment cap keeps the payments on […]

1) An escrow account is designed to reduce the cost of a mortgage. 2) A list of grades received in school is commonly included on a resume. Answer: FALSE 3) Financial planning has specific techniques that will be effective for […]

1) Scheduling personnel is an example of an operations management: A.mission implementation. B.operational decision. C.organizational strategy. D.functional strategy. E.tactical decision. 2) Knowledge skills usually don’t include: A.process knowledge. B.accounting skills. C.communication skills. D.global knowledge. E.financial skills. Answer: C Communication skills […]

1) A job with a 70 percent learning curve required 20 hours for the initial unit. The fourth unit should require approximately how many hours? A.6 B.9.8 C.14 D.20 E.34 2) Which of the following is not true of vendor […]

1) Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, and 60 units in week 5. If a fixed-period, three-period lot-sizing method is used, what will be the quantity of the […]

1) Heuristic rules are used primarily in which of these types of layouts? (I) Product (II) Process (III) Fixed-position A.I B.II C.I and III D.I and II E.II and III 2) Which of the following is a potential shortcoming of […]

1) In the area of product and service design, the acronym CAD refers to: A.conceptually appropriate design. B.computer-aided design. C.commercial applications design. D.competitive advantage design. E.completely automated design. 2) A manager is quite concerned about the recent deterioration of a […]

1) The business analyst for Video Sales, Inc. wants to forecast this year’s demand for DVD decoders based on the following historical data: What is the forecast for this year using trend-adjusted (double) smoothing with alpha = . 3 and […]

1) Technology choices seldom affect: A.costs. B.productivity. C.union activity. D.quality. E.flexibility. 2) Competitiveness doesn’t include: A.productivity. B.effectiveness. C.profitability. D.operations strategy. E.operations management. Answer: C A company can be competitive relative to similar companies and still be unprofitable if the competitive […]

1) The symbols for operation, storage, transportation, inspection, and delay would usually be found on which type of chart? A.flow process B.Gantt C.simultaneous motion D.worker-machine E.delay analysis 2) The project management strategy of injecting additional resources in order to reduce […]

1) ISO 9000 currently requires _____ of a certified organization. A.quarterly reporting B.product diversity C.annual audits D.a minimum of four supervisory levels E.continuous improvement 2) It took exactly 10 hours to perform the first kidney transplant on a 100 percent […]

1) A decision maker’s worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. The decision maker has discovered a firm that will, […]