Markets tend to produce too little of an excludable public good because A) transaction costs are high. B) of the lack of rivalry. C) these goods are depletable. D) All of the above. ANSWER B
Date: September 9th, 2020
Simulation analysis A) permits the calculation of expected value and standard deviation. B) does not permit the calculation of expected value and standard deviation. C) is too complex to ever be used in actual business situations. D) does not consider probabilities. ANSWER A
Date: September 9th, 2020
The XYZ Co is hiring salespersons. They will be paid a very attractive hourly rate that is independent of how much they sell. Describe an adverse selection that would take place. Describe a moral hazard that would take place. What will be an ideal response? ANSWER The adverse selection occurs when only below-average salespeople […]
Date: September 9th, 2020
The total demand for a public good is found by A) horizontally summing all individual demands. B) vertically summing all individual demands. C) finding the demand from the median voter. D) dividing the marginal cost of the good by the number of voters. ANSWER B
Date: September 9th, 2020
The expected value is A) the total of all possible outcomes. B) the arithmetic average of all possible outcomes. C) the average of all possible outcomes weighted by their respective probabilities. D) the total of all possible outcomes divided by the number of different possible outcomes. ANSWER C
Date: September 9th, 2020
The following Cobb-Douglas production function, Q = 1.8L0.74K0.36, exhibits A) increasing returns. B) constant returns. C) decreasing returns. D) Both A and B ANSWER A
Date: September 9th, 2020
The time value of money can be best described as A) a dollar today is worth more than a dollar tomorrow. B) the basis on which net present values are calculated. C) the basis on which internal rates of return are calculated. D) All of the above ANSWER D
Date: September 9th, 2020
When the exponents of a Cobb-Douglas production function sum to more than 1, the function exhibits A) constant returns. B) increasing returns. C) decreasing returns. D) either increasing or decreasing returns. ANSWER B
Date: September 9th, 2020
A stock whose rate of return fluctuates less than the rate of return of a market portfolio will have a beta that equals A) 1. B) less than 1. C) more than 1. D) Either A or C above ANSWER B
Date: September 9th, 2020
Explain what may occur when a buyer and a seller have unequal amounts of limited information. Describe two different types of problems that may arise when asymmetric information exists. What will be an ideal response? ANSWER Asymmetric information may lead to opportunistic behavior where the informed person benefits at the expense of the person […]
Date: September 9th, 2020
