31) In the circular flow model with the government sector, taxes A) flow in the opposite direction as do transfers. B) flow in the same direction as do transfers. C) on households flow in the same direction as do the goods and services. D) on firms flow in the same direction as do factors of production. E) flow from the goods market to the […]
9) By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the price level causes A) a decline in the real money supply, an increase in interest rates, a decline in investment spending, and a decline in aggregate output demand. B) a decline in the real money supply, a decline in interest rates, an increase […]
69. At what point on the graph of possible values for a call option does the buyer break even financially? A. When stock price equals strike price B. At any point on the upward-sloping segment of the graph C. When stock price equals cost of the option plus strike price D. At the point where the graph intercepts the y-axis 70. Under which condition does a call option approach […]
88. At 18,000 direct labor hours, the flexible budget for indirect materials is $36,000. If $37,400 are incurred at 18,400 direct labor hours, the flexible budget report should show the following difference for indirect materials: a.$1,400 unfavorable. b.$1,400 favorable. c.$600 favorable. d.$600 unfavorable. 89. The accumulation of accounting data on the basis of the individual manager who has the authority to […]
41.WhichofthefollowingisanexampleoftheTragedyoftheCommons? a.Thenumberofprofessionalfootballteamsincreasestothepointwherethequalityofthegamesdecreases,asdoestelevisionviewership. b.Thenumberofsatellitesincreasestothepointwheretheybeginrunningintoeachother. c.DisneyWorldbecomessocrowdedthatitinstitutesalotteryforadmissions. d.Atigerbreedingprogrambecomessosuccessfulthatlocalzooshavetobuildadditionalexhibitssothatvisitorscanviewthecats. 42.WhichofthefollowingisanexampleofgovernmentinterventiontosolveaTragedyoftheCommonsproblem? a.subsidizingbasicresearch b.buildinglighthouses c.tollchargesoncongestedroads d.cost-benefitanalysis 43.Whichofthefollowingstatementsisnotcorrect? a.Afreeriderisapersonwhobenefitsfromsomethingforwhichheorshedoesnothavetopay. b.Thecreationofgeneralknowledgeisapublicgood. c.TheTragedyoftheCommonsillustratestheunderuseofacommonresource. d.Agasolinetaxisanimperfectsolutiontotheproblemoftrafficcongestiononpublicroads. 44.TheTragedyoftheCommonsdescribes a.governmentregulationthatisnecessarytocombatexternalities. b.overuseofacommonresourcerelativetoitseconomicallyefficientuse. c.thenonrivalryfeatureofacommonresource. d.aneffectivecost-benefitanalysis. 45.WhatcausestheTragedyoftheCommons? a.(i)only b.(ii)only c.(i)and(ii)only d.(i)and(iii)only 46.Atollonacongestedroadisinessence a.aninterstatehighwaytax. b.aDepartmentofMotorVehiclestax. c.agasolinetax. d.acorrectivetax. 47.AtollcollectedfromeachcartravelingduringrushhouronacongestedroadisaneffectivecorrectiontotheTragedyoftheCommonsforallofthefollowingreasonsexceptthetollprovidesanincentiveforcommutersto a.driveattimesotherthanrushhour. b.usepublictransitratherthandriving. c.drivemorefuel-efficientcars. d.car-pool. 48.ThetownofIsleisonasmallislandconnectedtoBigCitybyasinglebridge.MostoftheresidentsofIsleworkinBig City.Asaresult,thebridgebecomesverycongestedfor2hourseachdayatthetypicalmorningandeveningcommutetimes.WhichofthefollowingpoliciesconsideredbythemayorofIslewouldlikelybemosteffectiveinalleviatingthecongestion? a.Afixedtollforthebridgepayablebyeveryvehiclecrossingthebridgeatalldaysandtimes. b.Avariabletollforthebridgepayableonlybyvehiclescrossingthebridgeduringthecongestedcommutetimes. c.Anyvehiclecrossingthebridgeatanytimemusthaveastickerpaidforwithaone-timefeeof$25. d.Apressconferenceinwhichthemayorrequeststhatpeopletrytocrossthebridgeearlierorlaterthanthetypicalcommutetimes. 49.Whichcitycurrentlychargesdriversa“congestiontoll”todriveintotheheartofthecity’sfinancial,legal,andentertainmentdistrict? a.Washington,D.C. b.Sydney c.Tokyo d.London 50.Whichofthefollowingiscorrectregardingroadtollsasawaytoreducetraffic? a.Theycanvarybasedontheamountoftrafficthatispresent. b.Theyreducedrivers’explicitcostofdrivingbutincreasedrivers’implicitcost. c.Somedriverscanbemadebetteroff,butsomedriverswillinevitablymadeworseoff. d.Theyarethesolutiontothefreeriderproblemthatoccursonroads.
Table 6-2 Estimated Price Elasticity of Demand Coca-Cola -3.0 All carbonated soft drinks -1.5 All soft drinks -0.8 27) Refer to Table 6-2. Assume that an economist has estimated the price elasticity of demand values in the table above. Use the data in the table to select the correct statement. A) The demand for Coca-Cola is inelastic. B) […]
31. Announcing one’s dissatisfaction with a relationship but opening things up for discussion and negotiation is an example of a(n) _____ strategy. A. direct, other-oriented B. indirect, other-oriented C. direct, self-oriented D. indirect, self-oriented 32. The most common situation leading to a break up is: A. sudden onset of discontent. B. shared desire between both partners to end the relationship. C. gradual dissatisfaction. D. the presence of repair attempts. 33. The break […]
64. Which of the following is correct for a firm with $400,000 in net earnings, 20,000 shares, and a 30% payout ratio? A. Retained earnings will increase by $120,000. B. Each share will receive a $1.20 dividend. C. $120,000 will be spent on new investment. D. The dividend per share will equal $6.00. 65. A firm is said to be “smoothing” dividends if dividends: A. are paid through an automatic […]
51) What has been the primary problem facing foreign-based U.S. firms that offer employee hotlines for reporting ethics violations? A) Technological malfunctions B) Communication failures C) Privacy concerns D) Bribery charges 52) Which of the following is LEAST relevant to successful career planning for expatriates? A) The spouses of expatriates receive adequate career support during the assignment. B) Expatriates receive support from […]
2.2 Economic Systems and the Role of Government 1) An economy in which a central authority draws up a plan that establishes what will be produced and when, sets production goals, and makes rules for distribution is a A) free market economy. B) laissez-faire economy. C) public goods economy. D) command economy. 2) An economy in which individual people and firms pursue […]
Multiple Choice Questions
66.A merchandiser:
A.Earns net income by buying and selling merchandise.
B.Receives fees only in exchange for services.
C.Earns profit from commissions only.
D.Earns profit from fares only.
E.Buys products from consumers.
67.Cost of goods sold:
A.Is another term for merchandise sales.
B.Is the term used for the expense of buying and preparing merchandise for sale.
C.Is another term for revenue.
D.Is also called gross margin.
E.Is a term only used by service firms.
68.A company has sales of $695,000 and cost of goods sold of $278,000. Its gross profit equals:
A.$(417,000).
B.$695,000.
C.$278,000.
D.$417,000.
E.$973,000.
69.A company has sales of $375,000 and its gross profit is $157,500. Its cost of goods sold equals:
A.$(217,000).
B.$375,000.
C.$157,500.
D.$217,500.
E.$532,500.
70.The following statements regarding gross profit are true except:
A.Gross profit is also called gross margin.
B.Gross profit less other operating expenses equals income from operations.
C.Gross profit is not calculated on the multiple-step income statement.
D.Gross profit must cover all operating expenses to yield a return for the owner of the business.
E.Gross profit equals net sales less cost of goods sold.
71.The following statements regarding merchandise inventory are true except:
A.Merchandise inventory is reported on the balance sheet as a current asset.
B.Merchandise inventory refers to products a company owns and intends to sell.
C.Merchandise inventory may include the costs of freight in and making them ready for sale.
D.Merchandise inventory appears on the balance sheet of a service company.
E.Purchasing merchandise inventory is part of the operating cycle for a business.
72.The following statements are true regarding the operating cycle of a merchandising company except:
A.The operating cycle begins with the purchase of merchandise.
B.The operating cycle is shortened by credit sales.
C.The operating cycle ends with the collection of cash from the sale of merchandise.
D.The operating cycle can vary in length among different merchandising companies.
E.The operating cycle sometimes involves accounts receivable.
73.Merchandise inventory:
A.Is a long-term asset.
B.Is a current asset.
C.Includes supplies the company will use in future periods.
D.Is classified with investments on the balance sheet.
E.Must be sold within one month.
74.The operating cycle for a merchandiser that sells only for cash moves from:
A.Purchases of merchandise to inventory to cash sales.
B.Purchases of merchandise to inventory to accounts receivable to cash sales.
C.Inventory to purchases of merchandise to cash sales.
D.Accounts receivable to purchases of merchandise to inventory to cash sales.
E.Accounts receivable to inventory to cash sales.
75.The current period's ending inventory is:
A.The next period's beginning inventory.
B.The current period's cost of goods sold.
C.The prior period's beginning inventory.
D.The current period's net purchases.
E.The current period's beginning inventory.
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