51) Consider the concept of equity in taxation. What is the “benefit principle”? A) the main principle on which all tax systems are based B) the main principle on which the Canadian tax system is based C) the principle that users of public goods are taxed in proportion to their use of them D) the principle that users of public goods are taxed in […]
69.The ability to recognize the value of new information, assimilate it, and use it for value-added activities is known as _____. A.perception ability B.realization capacity C.observation skill D.absorptive capacity E.adaptive capacity 70.A computer maintenance company wants to ‘capture’ the knowledge that employees carry around in their heads by creating a database where employees document their solutions to unusual maintenance problems. This practice tries to: […]
11) During the business cycle, A) real GDP fluctuates around nominal GDP. B) nominal GDP fluctuates around real GDP. C) real GDP fluctuates around its trend. D) trend GDP fluctuates around real GDP. E) real GDP falls after the trough. 12) A business cycle has two turning points, which are the A) recession and trough. B) peak and recession. C) trough and […]
71) Corey is the president of a large corporation whose plants are very interdependent. Her corporation is vulnerable to cyclical ups and downs in product demand. Which of the following would be the best pay-for-performance plan for her corporation? A) Scanlon plan B) Rucker plan C) ESOP program D) Merit pay plan 72) Which of the following is the LEAST likely result […]
11.What is the term applied to a current that flows away from shore through the surf zone? a.longshore current b.equatorial counter current c.tidal current d.undertow current e.rip current 12.What is the dominant type of beach on the east coast of the U.S.? a.barrier islands, or barrier beaches b.spit beaches c.pocket beaches d.coastal plain, mainland beaches e.ephemeral beaches 13.If dams were constructed on all the […]
1. The process of arousing and sustaining goal-directed behavior is called: a. energizing. b. psychoanalysis. c. motivation. d. affiliation. 2. The proposition that a person’s life was founded on the compulsion to work and the power of love is related to the: a. Protestant ethic. b. psychoanalytic approach. c. process theories. d. Calvinistic perspective on motivation. 3. According to the Protestant ethic, a person […]
71.An increase in the equilibrium price in the product market results in: A. A decrease in the quantity of labor hired. B. An upward shift in the MPP curve. C. An upward shift in the MRP curve. D. A reduction in wages. 72.Both wages and employment can increase at the same time as long as the: A. Marginal physical product of labor decreases. B. Number of available workers increases. C. The […]
Multiple Choice Questions 30. Which of the following statements is not true? A. Optimal inventory levels involve a trade-off between carrying costs and order costs. B. Carrying costs include the cost of storing goods as well as the cost of capital tied up in inventory. C. Inventory levels will be lower when storage or interest costs are high and will be higher when restocking costs are high. […]
11) A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________. A) rise; decreases; decrease B) fall; decreases; decrease C) fall; increases; increase D) rise; increases; increase E) fall; decreases; increases 12) When the price level increases there is ________ movement along the aggregate […]
21.A two-year bond offers a yield of 6% and a three year bond offers a yield of 7.5%. Under the expectations theory what should be the yield on a one year bond in two years? a.5.95% b.10.56% c.3.06% d.12.49% 22.The yield on a one-year bond is 6% today and is expected to be 8.5% next year. Based on the expectations […]
21) In the used car market with no warranties, the equilibrium is a ________ and there is ________.
A) pooling equilibrium; inefficiency, partly because of oversupply of good cars
B) pooling equilibrium; inefficiency, partly because of oversupply of lemons
C) separating equilibrium; no inefficiency
D) separating equilibrium; inefficiency, partly because of oversupply of lemons
E) pooling equilibrium; no inefficiency
22) In the used car market with warranties, the market for lemons (poor quality used cars) is ________ and the market for good cars is ________.
A) efficient; efficient
B) inefficient because of oversupply; inefficient because of undersupply
C) inefficient because of oversupply; inefficient because of oversupply
D) efficient; inefficient because of undersupply
E) inefficient because of oversupply; efficient
23) In the used car market with warranties, the equilibrium is a ________ and there is ________.
A) pooling equilibrium; inefficiency, partly because of oversupply of good cars
B) pooling equilibrium; inefficiency, partly because of oversupply of lemons (poor quality used cars)
C) separating equilibrium; no inefficiency
D) separating equilibrium; inefficiency, partly because of oversupply of lemons (poor quality used cars)
E) pooling equilibrium; no inefficiency
24) In the used car market with warranties, the equilibrium is a ________ and the lemons problem is ________.
A) pooling equilibrium; solved
B) pooling equilibrium; unresolved
C) separating equilibrium; unresolved
D) separating equilibrium; solved
E) pooling equilibrium; possibly solved and possibly unresolved, depending on whether good used cars sell for a higher price than do lemons
25) Asymmetric information means that
A) the buyer must have information that the seller does not have.
B) the seller must have information that the buyer does not have.
C) the buyer and seller have the same information.
D) either the buyer has information that the seller does not have or the seller has information that the buyer does not have.
E) None of the above answers is correct.
26) The fact that people who know they are risky drivers are more likely to buy auto insurance reflects
A) adverse selection.
B) moral hazard.
C) a separating equilibrium.
D) signaling.
E) the lemons problem.
27) The lemons problem in the used car market is that
A) the price of a lemon is too high.
B) the price of a lemon is too low.
C) no lemons are bought and sold.
D) only lemons are bought and sold.
E) Both answers A and D are correct.
28) If buyers cannot assess the quality of used cars and there are no warranties,
A) only lemons are sold.
B) only good used cars are sold.
C) good cars are sold at a higher price than bad cars.
D) there is no adverse selection problem.
E) lemons and good cars sell for the same price.
29) JCPenney guarantees to refund a customer's money if the customer returns poorly made clothing. This guarantee is an example of
A) the adverse selection problem.
B) the moral hazard problem.
C) the cost of risk.
D) signaling.
E) a lemon problem.
30) In the used car market, with a pooling equilibrium the price of a lemon is ________ the price of a good used car and with a separating equilibrium the price of a lemon is ________ the price of a good used car.
A) less than; equal to
B) equal to; less than
C) equal to; more than
D) more than; more than
E) equal to; equal to
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