10.2   The Loanable Funds Market 1) One type of demander in the loanable funds market A) wants funds to purchase financial capital. B) wants funds to purchase physical capital. C) lends funds to purchase financial capital. D) lends funds to purchase physical capital. E) wants physical capital in order to purchase financial capital. 2) The demand for loanable funds includes demand for i.loans. ii.stocks. […]

  166.Cisco Pool Service cleans and maintains residential pools and spas. At the beginningof the year, the company estimated that it would incur $480,000 of direct labor cost and $288,000 of manufacturing overhead. Overhead is allocated to production on the basis of direct labor cost. Actual supplies (direct materials) used during the year were $58,000, actual direct labor cost was $465,000, and actual overhead was […]

  31) Differences in skills i.can arise partly from differences in education and/or partly from differences in on-the-job training. ii.can lead to large differences in earnings. iii.result in different demand curves for high-skilled and low-skilled labor. A) i only B) ii only C) ii and iii D) i and iii E) i, ii, and iii 32) Other things being equal, the demand curve for low-skilled […]

    21)  Average wages in Canada have increased each year since the Second World War, even though the economy has experienced some severe recessions during this time. The explanation for this continued increase in nominal wages is A) the existence of powerful labour unions in Canada. B) that the actual unemployment rate is consistently below the NAIRU. C) that wage effects of the inflationary […]

    31) The figure above shows the production possibilities frontier for a country. A combination of 3 million gallons of milk and 3 million gallons of ice cream is A) unattainable. B) attainable and production efficient. C) attainable and production inefficient. D) unattainable and production efficient. E) More information is needed to determine if the point is attainable or not.   32) The figure […]

    41. Which of the following statements about customer relationship management (CRM) is false?  A. It is often facilitated by ERP systems. B. It can point out opportunities to take advantage of external but not internal linkages. C. It allows an organization to manage the entire life cycle of its customer relationships. D. It allows an organization to serve its customers better.   42. Which of the following would be […]

  61) If Canadian demand for French wine increases, the supply of Canadian dollars to the foreign-exchange market will ________ and the demand for euros will therefore ________. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase E) increase; remain the same 62) The supply of Canadian dollars to the foreign-exchange market, which is also the demand for foreign currency, will increase […]

  41) Suppose the demand for specialty car license plates is perfectly inelastic and the supply curve for specialty license plates is upward sloping. A tax is imposed on specialty license plates. Which of the following is true? A) Drivers pay the smallest share of the tax. B) Drivers pay none of the tax. C) Drivers pay all of the tax. D) The government pays […]

    11) Sunk costs A) are costs associated with repairing something you already own. B) are important for optimal decision making. C) are costs that have already been paid and cannot be recaptured in any significant way. D) are costs that firms sink into marketing.   12) Which of the following is a common mistake consumers commit when they make decisions? A) They take […]

  131.BlackOilCompanyconsideredbuildingaservicestationinanewlocation.Theownersandtheiraccountantsdecidedthatthiswastheprofitablethingtodo.However,soonaftertheymadethisdecision,boththeinterestrateandthecostofbuildingthestationchanged.Inwhichcasedothesechangesbothmake it less likely that they willnowbuildthestation? a.Interestratesriseandthecostofbuildingthestationrises. b.Interestratesriseandthecostofbuildingthestationfalls. c.Interestratesfallandthecostofbuildingthestationrises. d.Interestratesfallandthecostofbuildingthestationfalls. 132.HydroGrowisconsideringbuildinganewgreenhouseinwhichtogrowtomatoes.Theboardmeetsanddecidesthatthisistherightthingtodo.Beforetheycanputtheirplansintoaction,theinterestrateincreases.Thepresentvalueofthereturnsfromthisinvestmentproject a.isnowlowerthanitwasbefore,andsoHydroGrowislesslikelytobuildthebuilding. b.isnowlowerthanitwasbefore,andsoHydroGrowismorelikelytobuildthebuilding. c.isnowhigherthanitwasbefore,andsoHydroGrowislesslikelytobuildthebuilding. d.isnowhigherthanitwasbefore,andsoHydroGrowismorelikelytobuildthebuilding. 133.HappyTrails,abicyclerentalcompany,isconsideringpurchasingthreeadditionalbicycles.Eachbicyclewouldcostthem$249.66.Attheendofthefirstyeartheincreasetotheirrevenueswouldbe$140perbicycle.Attheendofthesecondyeartheincreasetotheirrevenuesagainwouldbe$140perbicycle.Thereafter,therearenoincreasestotheirrevenues.Atwhichofthefollowinginterestratesisthesumofthepresentvaluesoftheadditionalrevenuesclosesttothepriceofabicycle? a.5percent b.6percent c.7percent d.8percent 134.HalvorsonConstructionhasaninvestmentprojectthatwouldcost$150,000todayandyieldaone-timepayoffof$167,000inthreeyears.WhatisthehighestinterestrateatwhichHalvorsonwouldfindthisprojectprofitable? a.7% b.6% c.5% d.Itisnotprofitableatanyoftheseinterestrates. 135.DobsonConstructionhasaninvestmentprojectthatwouldcost$150,000todayandyieldaone-timepayoffof$167,000inthreeyears.Amongthefollowinginterestrates,whichisthehighestoneatwhichDobsonwouldfindthisprojectprofitable? a.5percent b.4percent c.3percent d.2percent 136.TheK-Ninedogfoodcompanyisconsideringthepurchaseofadditionalcanningequipment.Theyexpectthataddingtheequipmentwillyield$200,000attheendofthefirstyearand$250,000attheendofthesecondyearandthennothingafterthat.AtwhichofthefollowingpricesandinterestrateswouldK-Ninebuytheequipment? a.$415,000iftheinterestrateis5% b.$419,000iftheinterestrateis4% c.K-Ninewouldbuytheequipmentinbothcases. d.K-Ninewouldnotbuytheequipmentineithercase. 137.SometimesOnTime(SOT)Airlinesisconsideringbuyinganewjet.SOTwouldbemorelikelytobuyanewjetiftherewereeither a.adecreaseinthepriceofanewjetoradecreaseintheinterestrate. b.adecreaseinthepriceofanewjetoranincreaseintheinterestrate. c.anincreaseinthepriceofanewjetoradecreaseintheinterestrate. d.anincreaseinthepriceofanewjetoranincreaseintheinterestrate. 138.Afirmhasthreedifferentinvestmentoptions,eachcosting$10million.OptionAwillgenerate$12millioninrevenueattheendofoneyear.OptionBwillgenerate$15millioninrevenueattheendoftwoyears.OptionCwillgenerate$18millioninrevenueattheendofthreeyears.Whichoptionshouldthefirmchoose? a.OptionA b.OptionB c.OptionC d.Theanswerdependsontherateofinterest,whichisnotspecifiedhere. 139.Afirmhasthreedifferentinvestmentoptions.OptionAwillgivethefirm$10millionattheendofoneyear,$10million at theend of twoyears, and $10million atthe end ofthree years. OptionB will givethe firm$15 million attheendofoneyear,$10millionattheendoftwoyears,and$5millionattheendofthreeyears.OptionCwillgivethefirm$30millionattheendofoneyear,andnothingthereafter.Whichoftheseoptionshasthehighestpresentvalue? a.OptionA […]