Week 1 Quiz Eco550
Question 1
3 out of 3 points
Economic profit is defined as the difference between revenue and ____.
Answer
Selected Answer: total economic cost
Correct Answer: total economic cost
Question 2
3 out of 3 points
The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers?
Answer
Selected Answer: innovation theory of profit
Correct Answer: innovation theory of profit
Question 3
3 out of 3 points
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:
Answer
Selected Answer: equals the marginal cost of the test Correct Answer: equals the marginal cost of the test
Question 4
3 out of 3 points
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
Answer
Selected Answer: requiring officers to own stock in the company
Correct Answer: requiring officers to own stock in the company
Question 5
3 out of 3 points
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.
Answer
Selected Answer: profits (cash flows)
Correct Answer: profits (cash flows)
Question 6
3 out of 3 points
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.
Answer
3 out of 3 points
Economic profit is defined as the difference between revenue and ____.
Answer
Selected Answer: total economic cost
Correct Answer: total economic cost
Question 2
3 out of 3 points
The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers?
Answer
Selected Answer: innovation theory of profit
Correct Answer: innovation theory of profit
Question 3
3 out of 3 points
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:
Answer
Selected Answer: equals the marginal cost of the test Correct Answer: equals the marginal cost of the test
Question 4
3 out of 3 points
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
Answer
Selected Answer: requiring officers to own stock in the company
Correct Answer: requiring officers to own stock in the company
Question 5
3 out of 3 points
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.
Answer
Selected Answer: profits (cash flows)
Correct Answer: profits (cash flows)
Question 6
3 out of 3 points
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.
Answer