## ECO 550 Midterm Part 1

## ECO 550 Midterm Part I Strayer University

- Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:
- 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.
- To reduce Agency Problems, executive compensation should be designed to:
- 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:
- The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?
- Income tax payments are an example of ____.
- Generally, investors expect that projects with high expected net present values also will be projects with
- The ____ is the ratio of ____ to the ____.
- An closest example of a risk-free security is
- The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
- The standard deviation is appropriate to compare the risk between two investments only if
- The level of an economic activity should be increased to the point where the ____ is zero.
- When demand elasticity is ____ in absolute value (or ____), an increase in pric4eowuitllorfe4supltoints a(n) ____ in total revenues.
- If demand were inelastic, then we should immediately:
- Producers’ goods are:
- Iron ore is an example of a:
- Marginal revenue (MR) is ____ when total revenue is maximized.
- Songwriters and composers press music companies to lower the price for music downloads because
- An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.
- The method which can give some information in estimating demand of a product that hasn’t yet come to market is:
- The estimated slope coefficient (b) of the regression equation (Ln Y = a + b Ln X) measures the ____ change in Y for a one ____ change in X.
- In regression analysis, the existence of a significant pattern in successive values of the error term constitutes:
- Even though insignificant explanatory variables can raise the adjusted R2 of a demand function, one should not interpret their effects on the regression when
- In regression analysis, the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes:

- 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:
- Shirking of one’s duties is often encountered in team production settings because
- To reduce Agency Problems, executive compensation should be designed to:
- Income tax payments are an example of ____.
- The moral hazard in team production arises from
- Economic profit is defined as the difference between revenue and ____.
- Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:
- The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:
- The ____ is the ratio of ____ to the ____.
- The level of an economic activity should be increased to the point where the ____ is zero.
- Generally, investors expect that projects with high expected net present values also will be projects with
- The standard deviation is appropriate to compare the risk between two investments only if
- A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
- The factor(s) which cause(s) a movement along the demand curve include(s):
- An increase in each of the following factors would normally provide a subsequent increase in quantity demanded, except:
- Which of the following would tend to make demand INELASTIC?
- A price elasticity (ED) of −1.50 indicates that for a ____ increase in price, quantity demanded will ____ by
- When demand is ____ a percentage change in ____ is exactly offset by the same percentage change in ____ demanded, the net result being a constant total consumer expenditure.
- Those goods having a calculated income elasticity that is negative are called:
- Producers’ goods are:
- In regression analysis, the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes:
- In which of the following econometric problems do we find Durbin-Watson statistic being far away from 2.0?
- 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:
- When two or more “independent” variables are highly correlated, then we have:
- One commonly used test in checking for the presence of autocorrelation when working with time series data is the ____.
- The standard deviation of the error terms in an estimated regression equation is known as: